Monday, August 31, 2009

Update for 31 Aug 09…

image So another month passes by and as we look back – all said and done it has been a fairly good swing so far. Now all that remains is the last day to go by peacefully and that would be another achievement. Timagehe achievement may not be too much on the Nifty closing up this month – but the fact that the Nifty fell and recovered all the losses to close above in green on the monthly basis. Well there is today to be seen still. The FII and DII data as given by the SEBI is pasted above. On the weekly basis we are doing better than other markets. That by itself should be some consolation and an achievement. Before I move on to discuss other things some points that one can keep in mind before we end this month are:-

  • PCR is generating bullish signs.
  • India VIX has declined 524 basis points in last five days to close at 33.27% last week.
  • FIIs seem to have become net buyers in out markets in the last five days. Though on monthly basis they have been net sellers.
  • Crude prices seems to be hovering around the unchanged mark ending the week –1.15% at 72.49 $ a barrel.
  • Inflation seems to be recovering and may come in positive soon. at the moment for the week ending 15 Aug it was at -0.95%.

image image As far as the Global cues on the last closing are concerned the Asia was all green except Hang Sang that closed 0.71% in red. Nikkei was in green up 0.57% and Strait Times was green 0.02%. Europe started the day green and ended green. FTSE was up 0.81%, DAX up 0.86% and CAC up 1.22%. US was confused at its best – oscillating between red and green to end mixed. Dow down 0.38%, Nasdaq up 0.05% and S&P down 0.20%. So like I said – confused. Bloomberg says that as per the consumer confidence, hosing data and Tech company earnings the recession is ending. Nikkei has opened in green and is up almost 1.77%.

image Now as far as the candles on Nifty are concerned it was a white candle but it did not touch the upper Bollinger Band. On 315 – the 3 EMA continues to be above the 15 EMA and is a good sign. Volumes recovered a bit being 107% of last 50 Day average. RSI is rocking at 62.31 and the SMA (15) for RSI stands at 53.71. ADX still trails at 14. Slow Stochastic - %k and %D lines are almost overlapping and are in the overbought zone so some caution on that account is necessary. TRIX is looking up. MACD is bullish.

Put call 28 Aug 09 The options data as of now supports longs only with the put call ratio in nifty 1.45. The open interest is – 36.73 lac Put 4500, 31.83 lac at put 4300, 30.38 lacs in call 4900, 29 lacs in 4000 put, 5000 call and 4600 put. As per this we should now have a good run till about 4900 levels unless the Options data changes due to some reason drastically. Please take a look at the graphs also.Option pain 28 Aug 09

To summarise – Global cues are good to neutral. All the indicators baring Slow Stochastic and ADX are rocking. Slow Stochastic is overbought – but like I have said many times before it has a capacity to remain overbought and oversold for fairly long periods of time. ADX – yes it is an important indicator and till the time I see the markets in an upmove with ADX crossing 20 from below – I will keep saying that ideal strategy is that of cautious longs. All those who went long should trail stoploss on closing basis – do not hold longs if market closes below 4652, for those who are still bearish do not hold shorts if the markets close above 4716. For the day go long and remain long above 4684 and short below that level. Hope that this week too rocks. Only know that historically Sep and Oct are not too good a months for markets.