Monday, April 20, 2009

The battle of Bulls and Bears… Update for 20 Apr 09

So we have the stage set and ready for the bulls and bears battle for 200 DMA. Interesting! we have the bulls that have show resilience and strength for past so many days on one hand and the bears who are perhaps feeding the bulls to slaughter them one of these days. Who wins will dictate the markets in terms of whether we see the continuation of the bear markets that have a hold on us for almost a year plus or we see the sunshine for the times to come. Frankly the news still does not really side the bulls – but then what the heck – there are manipulators to take care of that. Hell of hype built up as if we are out of the woods and again on our way to touch the skies. Atleast one can do is give me a break – I have almost stopped switching on the idiot box for the fear of being sucked into their hype. In any case we are making a small curve where the trajectory of recovery seems to have petered out – perhaps for the time being atleast – but all the same don’t know really what next week will bring. So the question I ask you – are you convinced that we are going up? – if the answer is yes and you are the part of the majority then the shock therapy is just around the corner. But all the same I still feel that not everyone is convinced. So after a minor correction – we might still have some upswing. What I see the markets to do? Go down to 3050 go up to max of 3800 and the perhaps see sub 3000 levels.

Aah! I do get carried away whether I like it or no. Well let me start as always with the Global cues. After the wonderful run we have had it is time the markets world over take a cautious breather. Daily 17 Apr 09Infact one can distinctively see the markets looking over each other’s shoulder to see who goes where now. Asia was all green with Nikkei up 1.74%, Hang Seng up 0.12% and Strait Times up 0.25%. Europe started off flat with negative bias but went on to close healthy green – FTSE up 0.98%, DAX up 1.46% and CAC up 1.77%. US started flat and closed – well almost flat with DOW up 0.07%, Nasdaq up 0.16% and S&P up 0.5%. There are earnings on the way that should ideally dictate the way we choose beyond this point of time. The Asia has opened moderately down in red in the morning. Nikkei is 0.47% down and Strait Times as of my writing is 1.08% in red.

Like I had written the battle lines have been drawn at 200 EMA and it runs at 3395. If we do not close above it as it seems as of now then expect the bear run to keep – well running. The volumes were somewhat less yesterday relatively dropping from 207% 50 day average to 161% of 50 day average. On ADX though the +DI has been looking down the markets kept rising and the ADX strength indicator also showed gain in strength. The –DI remains very low – The ADX overall still is bullish. MACD is bullish with lesser divergence. RSI is bullish but in overbought area. Slow Stochastic is the first indicator to turn bearish while being still in overbought territory. Well the TRIX still looks up but is loosing confidence.

Pivot data for the day is as under: -

R3 3619
R2 3540
R1 3462
Pivot 3410
S1 3332
S2 3280
S3 3202
Projected High Range 3436 to 3501
Projected Low Range 3476 to 3411
Fib Projected High 3524
Fib Projected Low 3323


Let us look at the options data --- the put call ratio has improved a bit as there has been a small call built up put ratio 17 Apr 09













 option pain 17 Apr 09



Uma said...

thank you for the fib highs and lows, I think we need to go well below 3325 to make any headway in this range-bound market.

S S Cheema said...

I second mostly for my sake!
we have to crack but look at the put build up - it is too strong at the moment.

Uma said...

cheema...girega zaroor!