Friday, July 24, 2009

Update for 24 Jul 09…

image The markets are in a frenzy – they are in no mood to stop – the so called breather lasted just two days and the markets are pointing to the higher skies once again. Once again I will not go into the how and whys of the markets are pointing upwards but then some things do intrigue me. Take ADX for example – the +DI has fallen sharply inspite of 130 odd point rally on the nifty. What has happened ofcourse is a repetition of history – so strong has been the desire of everyone for the markets to fall that the put build up has reached – like I said yesterday from a call heavy to put heavy. Every new levels the put build up increases and unlike a few days when the call build up was so that the bulls would have had to try hard to break resistances – the bears may now have to painfully take a point at a time to inch down. Does that really mean that the bear market is over – so as to say? Uh! ask my neighbour – I do not know.

Daily 23 Jul 09 As far as the global cues are concerned – the Europe was flatish just skipping – red at times and green at other times. They were actually waiting for the data that was expected out of US – and when the data came – the Existing home sales started showing the signs of recovery and the – Europe recovered along with US closing comfortably at the highest levels of the day. FTSE was up 1.47%, Dax up 2.45% and CAC up 2.08%. The US opened absolutely flat and then immediately climbed 2 to 2.5 percent in green, ending – Dow above 9000 up 2.12%, Nasdaq up 2.45% and S&P up 2.33%. The buying in US was broad based and shows the sentiments rocking there. As expected the Asia has opened in green – Nikkei up 1.3% and Strait Times up 1.34%. I have a feeling that the Asian markets are not really as excited as the US and Europe was yesterday – any ways the time will tell.

On to the candles now. The markets seem to have prematurely terminated the consolidation and have moved up with vigour. The Bollinger Bands have started expanding and if the candles trail the upper edge then they will take the markets higher. The volumes were a bit lesser than last few days at 84% of last 50 Day average. ADX remains to be bullish but like I said in the beginning – the +DI line is dropping. But all the same the upswing is gathering strength. MACD divergence is increasing and is bullish. RSI is bullish with no sell signal that I talked about yesterday. Slow Stochastic is the only signal that says bearish and is still overbought. But then if the markets are in a small bull run for whatever it is worth then it has the capability to remain in overbought state for a pretty long time. TRIX too is looking up and is bullish.

Put call 23 Jul 09 As far as the options data is concerned the Put build up is crazy and that alone may prevent a worthwhile fall this month’s expiry. The state remains same like a few days before – call build up in front-liner stocks and put build up in the Index. In terms of open interest the top six slots go to the puts in Nifty. The order of open interest in decreasing order is Put 4000, Put 4300, Put 3800, Put 3900, Put 4200, Put 4100.

All in all the global cues are good like in GOOD, Majority of the technicals are good and the Nifty options data should prevent a immediate fall. Ideal strategy remains is to remain long above 4449 and short below 4449 on nifty. Best of luck everyone.



H S Cheema said...

my congratulations for your for your frank and rational views. Market has its own way of behaving. that should not distract the analysts for rationalities. Well done for your articles and do keep it up.