Tuesday, June 30, 2009

Dot on … Update for 30 Jun 09


Last day of the month and it is one thing to be confused and it is another to be sitting on confusion. Let me clarify what I mean. I mean that we have 3 EMA and 15 EMA exactly the same – 4354.  Now this can mean two things – if the EMA crosses over then we go long and if it does not then we are supposed to add to the shorts already held with us. So seeing the things as they are – we will just wait for the other indications to give us direction or we will just wait for some more clarity to emerge. Yesterday the market’s high was where it was exactly projected to be – the middle of Bollinger bands. That figure was 4446 and the market high yesterday was 4440 – just six points short of it before it gave away most of its gains and ended at 4390. could this be the top of the second shoulder that I discussed yesterday? well it may be though I am sceptical. I do feel that a little bit more is what is there in store for us before we form the shoulder and decide on the direction. Daily 29 Jun 09All this is well – but everyone is eagerly waiting for the budget and the pull and pressure can be gauged by the fact that the premium on the Calls and puts have increased quite a bit. Normally what happens that the markets sees the direction of the trend and the premium towards the trend is more and less the other way – here we have the premium increased both ways – so you can actually feel the pulse of confusion.

As far as the global cues are concerned there is fair amount of good news flowing in – I am talking in terms of the market performance – except Asia – everyone was green. FTSE was up 1.25%, DAX up 2.27% and CAC up 2.04%. US opened flat – dipped down red and then went up to remain green and close at those levels only. DOW was up 1.08%, Nasdaq was up 0.32% and S&P was up 0.91%. Mind you all this was in a lack of market cues for US and Oil shot up by 3.4% to 71.49%. Ofcourse if it all green then we have to have a matching Asia opening and Nikkei has opened green – and is now at 1.98% up and Strait Times too is 1.56% in green.

Coming to the charts – like I said we have a situation where the 3 EMA and 15 EMA are same so I will wait for a crossover and chances are of a positive crossover. The volumes were a bit better than yesterday with 82% of the last 50 day average. ADX has turned bullish but the strength is less – very near to 20 – the signs of confusion here too. MACD remains defiantly bearish. RSI is bullish. And so is Slow Stochastic. TRIX – one of my favourite forward looking indicator is looking down unfortunately as of now.

The Pivot data goes on like this ---

R3 4528 against 4523
R2 4482
R1 4436
Pivot 4393 against 4333
S1 4347
S2 4304
S3 4258
Projected High Range 4414 to 4459
Projected Low Range 4419 to 4374
Fib Projected High 4463
Fib Projected Low 4325

Option Pain 29 Jun 09 As far as the options are concerned the Put Call ratio has almost come to 1 –see it for yourself.Put Call ratio 29 Jun 09

To prepare for the elections a large majority is with straddles and strangle in options. I feel otherwise – in toto for a straddle in nifty we are paying almost 400 points – we may not have such a swing and may not get the kind of gains we expect from the markets – so I am where I was – on the sidelines for more clarity. Best of luck to all of you for today’s trading.