Thursday, June 25, 2009

Will the market revive? Update for 25 Jun 09

The down trend that had started was showing signs of slowing – but now I would like to question – is it over and do we have a condition of getting back on track with markets recovering? Well the question is difficult but I would like to add that it would be reasonable to assume that the markets will go further up. Personally I would wait for three critical things to pass by before the dict is passed in favour of the bulls. The first being this expiry today, the second being the crossover of Lower EMA above the Higher EMA I track and lastly the budget that has the potential to topple the apple cart altogether. Other than this the mood at the moment seem fairly bullish as was demonstrated yesterday. sector-irc The advance decline was 7:2 and though the FIIs sold 792 Cr worth – the DIIs bought worth 728 Cr. There seemed to be participation by retail yesterday as well. There was earlier an impression among the other world economies that India would do well and now they have openly started endorsing it the latest is OECD that has revised forecast of India’s growth to 5.9? That does augur well for India provided the dozens of other subtle things remain in place. I refer to Oil, monsoons, recovery of the world economies etc. I am sure everyone would agree that all said and done the internal growth can only take us upto a limit, in these times of global dealings – ultimately the recovery of the world will matter. One thing that till now goes for the present run-up is that as of now the govt is in good hands and even if there is a populist angle to the budget – it will be well thought off and without the normal pull pushes of allies of the govt’s yesteryears.

As far as the global cues are concerned – the Europe opened low and then started climbing – not looking back and closing at almost the highest levels. FTSE was up 1.185, DAX up 2.74% and CAC up 2.18%.US opened flat – climbed up but gave up most of the gains around closing finally closing at Dow in red 0.28%, Nasdaq green1.55% and S&P green 0.65%. The mood in asia is good to say the least with the markets – Nikkei trading 1.86% green, Hang Seng 1.43% in green and Strait Times 0.77% in green.

As far as the charts are concerned. the 3 EMA is still trailing below the 15 EMA – the indicator that I follow but it is threatening to cross back above the 15 EMA and that may break above and cancel the down ward move of the markets. In any case the 15 EMA is as of now at 4360 and that is not too far away. The markets should close above the 4370 mark to make a difference. The volumes were average yesterday and as far as the indications are concerned – MACD is bearish. ADX is bearish and so is RSI as of now. There may be a chance – if we close in green that RSI gives a buy signal tomorrow. The Slow Stochastic are bullish and out of the overbought zone. I am sorry as I cannot insert the charts – internet is just not behaving and that is one of the reasons for the late update. Please bear me out and the best may be sitting on the sidelines ready to jump in rather being in and on the wrong side.

I am too late and the market has already opened so will skip the pivot levels and post – best of luck for today’s trading…



dr.c.m.singh said...

cheema are too good your analysis a lot.

S S Cheema said...

C.M. thanks a ton for the comment. It is so morale boosting.
C.M. I saw that you had subscribed for getting updates on your email but the verification had not completed.
Thanks once again