Thursday, July 16, 2009

Time for Introspection… Update for 16 Jul 09

image Yeah! I do have to take out time and think it out as to how I can improve and where I lacked that the profit that we were running – of 10 k till day before shows a loss now. Where did I lack? See – all said and done most of the levels and the market direction have afterall been correctly predicted over the last few weeks. Where I lacked was on conviction in what the technicals said? After they did point out towards all this. A drop followed by a bounce – even so much so – bounce to 4250 level. Where I lacked is the well thought of exit strategy. Every single book in technical analysis or investment that I have read says that the entry into a position is very important – no doubt – but more important is to time the exit. Well over my next few days I will be spending considerable time and effort to study indicators or strategies that make me come out of positions with maximum profits. I know that it is going to be a daunting task. Looking at the FII/DII data both have purchased collectively for more than 525 worth and that is how the markets ran up singularly.

Daily 15 Jul 09 Coming to the global cues and the technicals. Asia closed well. Europe opened flat – kept climbing to close at the best levels for the day – FTSE up 2.57%, Dax up 3.07% and CAC up 2.90%. US too opened positive – on getting the surprising results from intel – the markets continued their journey upwards to finish at one of the best levels seen. Dow up 3.07%, Nasdaq up 3.51% and S&P up 2.96%. Asia today has opened with a gap up of around 2% and is maintaining it. Nikkei up 2.2% and Strait Times up 1.79%.

On the charts most of the indicators are sitting spot on the confluence that can either propel them forward or make them go back to the original levels. Let us start with the Candles – two good white candles. 3 EMA inching up towards the 15 EMA. We are also in the middle of the Bollinger bands and a crossover will give bullish cues. A matter of fact is that we have 20 EMA at 4213, 15 EMA at 4192 and 3 EMA at 4149. Pretty close to each other and a crossover of lower EMA will signal buy. Volumes were better but still not as much as last 50 day average. ADX – all three line are making a confluence almost accurately. ADX (the black line) – mind you is not giving too much credence to this upswing. The +DI has crossed above the –DI and that makes the markets mildly bullish. MACD is still bearish with reducing divergence. RSI has started looking up and a 50 crossover generates a buy signal. (second – for those who follow this). Slow Stochastic is bullish and at this rate will turn back after a day or two. TRIX is flat and not committal.

reliance put call 15 jul 09 icicibank put call 15 jul 09 Nifty put call 15 Jul 09 Over the last two trading sessions – specially yesterday the open interest in Put have increased dramatically – reversing the position in Nifty. Look at the Nifty Put/call ratio. Option pain for nifty remains almost at the same levels. Considering the open interest. 4000 strike leads followed by 3800 followed by 3900, followed by 4100 – so now we have hurdles going down. The build up of call is way down at fifth position for 4300 levels. So that should be the next hurdle – that we may be at on opening. apart from this the calls in all individual counters still rules.

All in all we have very good global cues. Mixed technicals – with still a small tilt in favour of bears and a lot of call writing still going on. Whatever we see today may turn out to be the highest for the next few days. There are too many resistances at around these levels.

Ser No Stock/Index Sold / Bought at Last Closing Notional Profit/Loss Stoploss Remarks
1. Nifty - 50 (4185) 4237 -2600 4207/4202 Shifted the stoploss to 4255 – may have made a mistake.
2. Reliance         Not initiated.
3. Nifty Call         Not Initiated.