Monday, August 9, 2010

Update for 10 Aug 10…

The day was not unexpected. The bullishness was indicated in measure and it just showed out. My point is that enjoy till the time the bullishness remains in the system. imageThere are slowly small but certain negative divergences building up. The problem with these  negative divergences are only that they take their own sweet time to play out – so enjoy sunshine till it is there – thereafter we will review the situation again. This bullishness is not a local phenomenon here – in way or the other – the entire world is participating. Lower than 10 k in DOW seems to be a remote possibility – it would require a major trigger to initiate it to those levels. imageThere are rantings here, there are rantings there – so far just whispers – but worth giving a ear and keeping on ones toes. I have heard that the DIIs in the long run are in a better position to make money – and heard that they are selling. Anyone can help me there?  On the other hand the FIIs are continuing their buying – hope it does not come to it that they decide to exit – for whatever reasons. The other thing is that with every day of consolidation the channel moves and gives a more space for the market to move on the upside – capping the lower levels. imageNow it is not everyday that the bands are violated – so play the band. The only problem that I see is that ideally I had a feeling that the markets should have touched and started trailing the upper Bollinger Bands – that it did not do – so trend is definitely up but remain on the ball. There is a blog that I have been following and I recommend that anyone who is seriously attempting or wants to follow waves – waves pattern, pivots in its purity can visit him. mind you Illango – the master there is worth his weight in gold.

  Coming to my crystal gazing – gazing at the candles. The Nifty gained whatever it gained on average volumes. 104% of the average to be precise. The candle closed above the highest that we achieved day before and the body encompasses the black candles of last two days. So take this too as a bullish signal. As per the 315 the Buy and hold longs continues. RSI too remains with bullish. ADX is a worry for me. It is here that I see the negative divergence and it is here that I see that the present upswing is without the strength that should have been ideally associated with this kind of sustained upmove. The MACD too is confused and not really giving the kind of signal that I could or should have. It is still bearish. Slow Stochastic is kissing overbought zone every now and then. Seeing them separately – they have maneuvering space to let the upswing dance around for some more time.

Before i pen off – the options data. There has been an addition of 7 lacs + Puts at strike points of 5300 and 5400 levels. We might have a condition where the 5400 now gives support. on the upside 5400 calls have unwinded 86 thousand and there is a build up at 5500 and 5700 levels by 2 lacs+ positions. So basically the options are giving space to the markets to move up and closing the downside as the markets move up. Mind you there is still time to expiry and options are fluid – all the same so far this is what it is. It can also so happen that the hedging is also going on.

So all in all enjoy the upswing as long it lasts. Best of luck for the day to come.



alphabet1 said...

Welcome back to blogging after your break.

veer said...

Dear Cheema,

Welcome back. After along time.



S S Cheema said...

thanks veer and alphabet1

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veer said...

Dear Cheema,

What is vega in option trading. Can you pls explain with an example if time permits you.I browsed through and saw the definition. But I want to understand with an example. If you could help me in this regard, it will be great.



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