Wednesday, April 22, 2009

Another round… and the match is a draw Update for 22 Apr 09

So another day passed by and bears tried hard but the resilience of the bulls proved too much for the markets ending it just 12 points in red. The 200 EMA remains there steady and tall – not taken down decisively be either bulls or bears. The markets hovering so close to the levels that they have not been able to influence the 200 EMA by even one point and it still holds at 3395. I am not a cricket fan but looking at the markets – what better Adrenalin gushing matches can you hope for than seeing the bulls and bears battle it off – other than the cheer girls factor perhaps. It has everything – suspense, romance, mystery, deception, love… just name it. Except for the 25 basis point cut in repo, reverse repo, – that too was below the markets expectations – there was not anything great about the day – I mean there was not good news really. Infact though the markets seems to be a draw – I would give full marks to the bulls for holding out in an otherwise a killing situation in view of the global cues.

Today there are a spate of results that are to be declared and that coupled with the global cues should ideally dictate the trend in the markets. Well the markets still are overbought and Global weak cues could not trigger a sell off – what are we really waiting for? Technically it has been fairly long that we have been in these overbought territories. I however feel the moot question is – Are you bullish? when a majority of people turn bullish – it is then that the markets will sway and show the true colours.Markets

dailyThe Global cues have turned good once again and I think that we are not the only ones who are confused as to which way to go. There are whole bunch of others taking one step back one day and one step forward the other day. Get this fact right that the recession in not ending now or here. I would like to clarify my stand: What is recession? though there are different explanation bit here and there – but perhaps the one agreed is that when we have the GDP growth falling for 3 straight quarters. Well so far so good.  Now the growth comes to such low levels that relatively there is growth – but mind you it cannot go to the old levels for whatever reasons. It is this that has to be seen in the present scenario. There is no way the the developed world is going back to what they enjoyed a year back in a hurry. The second is the markets are only a function of Technicals, Fundamentals and the existing market sentiments. As of now the Technicals and Fundamentals are weak and only the hope and sentiments are taking the markets up – how long is subjective as there is no measure of this one factor.The global cues that were totally bearish have mellowed down a bit with Europe closing flat – FTSE down just 0.09%, DAX down 0.34% and CAC down 0.15%. US opened flat / weak but then steadily climbed on to end almost at their highest levels. Dow was up 1.63%, Nasdaq up 2.22% and S&P up 2.13%. This tried to encourage the Asia to trade green but at the moment the picture is not rosy – with Nikkei in green just 0.16% and dipping, Strait Times red at 1.13%.

On the charts we are no longer trailing the upper Bollinger bands and are a few points below the 200 EMA. This was a second doji – two on consecutive days so beware is all I can afford to say. Volumes were bit more than yesterday and stood at 141% of 50 day average. ADX though still bullish shows bulls loosing ground and bears raising heads. MACD divergence is still bullish but divergence has reduced considerably. RSI at 63 – just out of the overbought zone at 70 and bullish so far. Only Slow Stochastic are bearish and below the 50 mark that is used by some traders to trade on the negative side.

Let us see the Pivot data for today:

R3 3519 against 3543
R2 3467 against 3487
R1 3416 against 3432
Pivot 3362 against 3385
S1 3311 against 3330
S2 3257 against 3283
S3 3206 against 3228
Projected High Range 3389 to 3442
Projected Low Range 3386 to 3333
Fib Projected High 3442
Fib Projected Low 3280

Sorry there are no Options data charts today. Another day on the tender-hooks?

Best of luck