Wednesday, May 13, 2009

Update for 13 May 09

We would be doing something right – or perhaps something wrong – the markets are unstoppable. Do the markets know something that we do not know? Like there is a party coming to power with absolute majority? Or perhaps that the Oil is about to go down to 10 bucks or something – after all there has to be something that we do not know. The market do know a lot of things perhaps – but what is my next big question. At a time when all the global markets are tumbling away to glory – we defy every rule in the book and continue touching new heights. Are the results already out? Well I will rely on some one else to give us a fundamental touch and will continue with the 12 May 09 Daily 12 May 09Just one thing before pouring the charts out – both the FIIs and DIIs bought 452 and 171 Cr worth respectively.

As far as the global cues were concerned that weakness is there. More than weakness perhaps the doubt to catch a trend is there – afterall the run up has been for quite some time now. In Asia Nikkei was in red – down 1.62% but Hang Seng after opening red, going green, dipping red again closed finally flat at 0.38% green. Strait Times too was green at 0.56% up. Europe opened red – went green and ended flat with negative bias. FTSE was red 0.22%, DAX red with 0.26% and CAC down 0.54%. US started its day in green but immediately slipped red on profit booking and now past mid session is still trailing red. DOW as of now is down 0.21%, Nasdaq down 1.54% and S&P down 0.9%. There is still some time to go before they close so really it would be difficult to take a call – but the markets are perhaps giving an indication of trying to recover.

Okay before I begin with the charts. I would wander in the realm of unsurity. I will make a statement that may be wrong and would welcome if I am or can be corrected by anyone on this account. The Purist followers of 315 strategy would say that this is the third indication to pyramid their holdings – meaning build one more long. I had earlier on may 5th had said that there is an indication by the candle to exit longs (not equal to go short). If this is the third indication of Pyramid then obviously I was wrong on what I said about 5th. It would also follow – for the purists I mean that this is the last time they Pyramid and there will be no long build up till the Exit longs would figure out on the charts. The candle today was tall and white but still stood short of trailing the upper Bollinger bands. The volumes were also somewhat higher. We have as per the Trailing EMA lines a perfect run up. ADX negative divergence however continues unabated. Hey it is still bullish though. MACD some how shows a negative divergence inspite of the market ending so much up in green. RSI is bullish and I will not talk about the RSI divergence as neither is the market off to a new high – nor is the RSI to a low – but the Negative divergence as I drew yesterday is true and continues. Slow stochastic is still bearish. I really do not know what are we or what are the markets trying to prove. The TRIX too looks down. The fact is that the technicals are not supporting the bullish sentiment as the markets go forward. If I were you – I would be very, very, very cautious. This has the build up of washing away a lot of your hard earned money without giving you a reason. Today I have done something else – I have also pulled up the chart of reliance. I am posting the same. It is in some ways mirroring the Nifty chart – have a look.

Option Pain 12 May 09 Put call ratio 12 May 09 The Pivot data is something like this----

R3 3848 against 3786
R2 3792
R1 3736
Pivot 3635 against 3582
S1 3579
S2 3478
S3 3422 against 3379
Projected High Range 3686 to 3764
Projected Low Range 3617 to 3539

The Fib Numbers are High of 3733 and low of 3491.

The option pain and the Put call ratio is as in the charts. Hope we continue this path of the upswing – but be on your guard.



Nikesh Goyal said...

I have the answer of all these problems but your Conscience will not accept it.....

and the answer is :


If markets can be traded using technical analysis then every scientist would be a better trader..

your opinions are welcomed as you are the owner of the blog ;)

Uma said...

Not just technical analysis, but everything else is nonsense also. Otherwise we would all be millionaires in our chosen field ;D

S S Cheema said...

Hi Nikesh,

In my life I have, more often than not come up with situations that are neither black and white themselves nor are the solutions. Nothing in real life is black and white nikesh - it has all the shades of grey in between black and

What drive the stock markets? Technicals? No? maybe. Fundamentals - give me a break. We were not supposed to be at 6k and neither 2.5k on nifty. Sentiments? yes - but what is the measure of that? Perhaps more than all is the manipulations by big fish. I agree I do not know the answers - but I am surprised that any one who shouts "TECHNICAL ANALYSIS IS A COMPLETE NONSENSE.."(in capitals) comes and reads this blog. Time pass?

Nikesh the word is that nothing succeeds like success. The month technicals can provide the answers - they work and when they do not - they don't.

All the same as I have a right to opinion - so have you. Hope you are making money in the markets.

today's drink for you on me.

S S Cheema said...

Sorry Uma - missed you - cheers to you too.