Update for 29 Jun 09…

The markets bounced back with vigour in the last trading session. Now we have a mega event that may no longer be mega in size but may dictate the future of our markets in time to come. Railways budget and the Budget per say. It will decide the line that the Indian Govt will take over the next year to come. Are we expecting too much from this run up and are we expecting to reach new highs? may be – isn’t it all happening too fast? I was having a chat with Capt Joetom in the evening and I agree with him – if the markets go up now in expectations of the budget – it is difficult that the budget expectations will be met… in the way desired and we can expect a correction. If however we do have a sign of stability here at or below these levels then there are bright chances that we will strike gold at new highs in the coming days.

As far as the Global cues are concerned, we were the best of the markets in terms of performance on Friday. In Asia Nikkei finished green and almost the highest for the day – 0.83%, Hang Seng up 1.78% and Strait Times up 0.67%. Europe did not have a particularly good day. They started green and ended the session red at the lowest levels for the day – mainly on the US cues. FTSE was down 0.27%, DAX down 0.5% and CAC down 1.05%. The US started red, went deeper red and then tried to recover ending not good – DOA down 0.4% and S&P down 0.15% and Nasdaq up in green 0.47%. How we see the session in the Aisa opening we will see. So overall the Global cues are not too good and Asia opening has to be seen in this context.

As far as the technicals are concerned there are two other things to consider before making a choice of trades… Firstly is the Head and shoulder pattern being made.

If this turns out to be true then we may see levels very near to the 4500 on nifty before a pullback. The second is that though the 3 EMA has not crossed above 15 EMA so far – it may do so in this coming week before the budget and may give a positional long signal. So I would remain cautious around this zone of confusion and will wait for a clear signal. Also if the shoulder gets completed and it turns out to be what I am thinking – then one can expect a sharp retracement from those levels also. I do not however see the markets running up to 5000 as many are speculating the markets to do. We are trying desprately to move away from the  bottom of the Bollinger Bands and the first target may be the middle of the bands at 4446. The 3 EMA is trailing below the 15 EMA – 3 EMA at 4318 and 15 EMA at 4349. The volumes were not particularly impressive – just 76% of the last 50 Day average. Here comes another shocker for the bears – ADX is bearish but chances are extremely bright that we will have a bullish indicator. MACD remains faithfully in the bear camp but shows signs of switching sides as the divergence is decreasing with every passing day. The Slow Stochastic is bullish and so is the RSI. So here is all the indicators I follow laid out in front of you. As of now – the bulls may be calling the shorts so bears beware.

Now we come to the Pivot data…

R3 4523
R2 4473
R1 4424
Pivot 4333
S1 4284
S2 4193
S3 4144
Projected High Range 4379 to 4449
Projected Low Range 4317 to 4247
Fib Projected High 4421
Fib Projected Low 4204

The options data seems to be inconclusive but all the same see the options pain and the Put/Call ratio charts. The greatest volumes for the Jul calls is at 4500 levels and that for puts is at 4400 levels so let us see where we are off too.

Now What? … Update for 21 Jun 09…

We have had a so called meaningful correction so as to say… But the doubts as always float in the mind as to now what. There are a lot of circumstantial

pulls and pressures that are building up. Firstly this run-up was perhaps not to reach such heights. Then there is this budget, news about the Air India asking the top employees to forego the salary, Paying the rest late, Oil prices and ofcourse the run up that we have seen for last few months now.

 

Infact globally the uptrend seems to have taken a breather and inspite of us being the markets that are out to outperform others – still we have to remain vary. As far as the global cues are concerned – Europe closed in green with FTSE up 1.52%, Dax up 0.04% and CAC up 0.85%. US started the day well but by mid day had given up most of the gains to end flat. Dow was down 0.19% and S&P was up 0.31%. Nasdaq out performed both the exchanges and closed 1.09% in green. Today the markets have opened confused here in Asia too. Nikkie opened flat, went red , climbed green and is now re 0.2% down. Strait Times opened green, turned red and now flat at +0.2%. So they are yet to make up their minds as to where they have to go.

As far as our charts are concerned the markets have turned bearish with the 3 EMA trailing below the 15 EMA. To reverse the trend the markets should close minimum above the 4409 levels and then confirm it with another uptick. We are around the lower end of the Bollinger Band. The volumes were nowhere as good as desired and you can see the FIIs participation in the markets by looking at the data above. ADX is bearish and the down trend seems to be gathering some strength. MACD is bearish and the Slow Stochastic have reached the bottom of the limits with both %K and %D lines in oversold territory. RSI is at 51, crossing from below – but then this may turn out to be an aberration and may continue its journey downward with an odd stop. TRIX is looking down and that is it.

So all in all like I said – unless the charts reverse the downtick will continue and one odd market up tick as of now should be taken as an opportunity to get out of the stock positions to buy lower. Let us see the supports and resistance levels now…

R3 4446 against 4702 yesterday
R2 4401
R1 4357
Pivot 4281 against 4401 yesterday
S1 4237
S2 4161
S3 4117 against 4101 yesterday
Projected High Range 4319 to 4379
Projected Low Range 4272 to 4212
Fib Projected High 4358
Fib Projected Low 4173

The Options data is as you see – look at the call build up – there is no way we are going up with this call put ratio. I will do a write up tomorrow on how Put Call ratio dictate the markets.

Best of luck to everyone today – another interesting day in the markets.

Update for 18 Jun 09…

So the inevitable that was being brushed under the carpet for so long has happened. The selling pressure just outweighed the buying – which ofcourse I hardly believe was there to begin with. And the action has been repeated in most of the world markets – a huge theatre for the people playing the GOD men. Had this move come a couple of weeks earlier – it would have been perhaps seen in an absolute different light – could and would have been taken as a healthy correction. The markets could have then recovered, composed themselves quickly and marched ahead with vigour. Unfortunately it has come at a time and with the ferocity that might now indicate or terminate the run up that we have been seeing till now. The gravity – for whatever it was worth was hardly realised by the Asian markets and they closed nominally down and then the worst came. Europe that tried to go green suddenly found it hard to breathe finally ending – FTSE down 1.16%, DAX down 1.86% and CAC down 1.64%. Though the US did open with a negative not – it tried and did go on to the green only to give up most of the gains eventually and close red except for Nasdaq. The banks did most of the damage so as to say. The US closed – Dow down 0.09%, Nasdaq up 0.66% and S&P down 0.14%. In Asia just Nikkei has opened that is already trading 1.56% down.

On the charts the much awaited event that happens once a while has happened today. For those who follow 315 – the 3EMA has moved below the 15 EMA and gives a sell signal – so ideally one should be in a positional short now. At the most today’s candle can be seen – but chances are bright that the markets will continue in this direction only and do a budget rally – so the bears should ideally dance for the next coming week too. We are past the middle of the Bollinger bands to the lower side. Like I already said the 3 EMA has crossed down below the 15 EMA and gave a sell – to be confirmed with a candle today. Volumes were one tick below the last 50 day average. Advance decline ratio for Nifty was 0.177 – grossly in favour of the bears. ADX has turned bearish and the ADX line will show strength in coming few days – if it turns upwards and looks up. MACD is bearish like past so many days and the divergence has increased. RSI is at 53 and those who saw my “trading with RSI” will notice that on of the sell signals generated by RSI is when it crosses below the 50 points. So if we have a bad day then RSI too would generate the second sell signal. Slow stochastic is Bearish but still nowhere near over sold so we do have a run down left (so as to say…). 

Let us see the Pivot data now: -

R3 4702 against 4669 yesterday
R2 4586
R1 4471
Pivot 4401 against 4468 yesterday
S1 4286
S2 4216
S3 4101 against 4303 yesterday
Projected High Range 4436 to 4529
Projected Low Range 4505 to 4412
Fib Projected High 4567
Fib Projected Low 4281

If you notice the pivot is down 67 points and also the range has widened. The Fib projected low too has gone to 4281 – below the 4300 level.

See the Option Pain and how the Put Call ratio has over a day changed in favour of calls. IF and IF there is a recovery that would be quite a painful type. Best of luck to everyone for today’s trades.

Update for 17 Jun 09

The roles of the FIIs and DIIs seem to have reversed. And the FIIs sold worth 728.51 Cr and the DIIs bought 145 Cr worth. I am sure that that with this alone there was little reason why the markets ran up whatever that was worth. If not this then the next thing that comes to the mind is that the retail too joined in purchases and that held the markets to the levels they closed yesterday. The entire global markets had had a bad day a day before and Asia too took cues and was in red. Perhaps our reasoning was that after such a bad day for the entire set of markets the Europe will open green and then all will return to normal – business as usual. Well that may have been a fair presumption but Europe after opening flattish green went on to climb higher only to fall flat on its nose after the US showed no enthusiasm. Infact the plans of our market operators also seem to be thrown to the winds with the US markets drifting lower.

As far as the global cues were concerned the Asian markets yesterday were down red with Nikkei down 2.86%, Hang Seng down 1.8% and Strait Times down 1.23%. As I told some time back the Europe had opened flattish with green bias and went on to climb higher by the mid session – however at closing it once again turned flat with FTSE down 0.06%, Dax up 0.02% and CAC down by 0.17%. US too opened flat because of the mixed data on production and housing the markets dropped signalling end of the dream run that we have been having for some time now. Dow was down 1.25%, Nasdaq was down 1.11% and S&P was down 1.27%.

On the charts the candle was a hammer though the typical down trend had not set in so far. All the same it is a reversal signal from a down trend. With the appearance of the hammer a confirmatory signal the next day is almost compulsory.  We are near the middle of the Bollinger bands and also would have 3 EMA would have definitely crossed the 15 EMA lower had the candle been black. Volumes were just a bit better than a day before. ADX is bearish and the –DI had crossed above the +DI inspite of the white candle. MACD continues to show a negative divergence with divergence increasing – remains to be bearish. RSI tries to look up – and will see it today during the day. TRIX is looking down and shows bear times ahead of us. Slow Stochastic too are bearish. If we take a fall today then take yesterday’s climb as and aberration of misplaced enthusiasm of retail.

The Pivot data now…

R3 4669 against 4733 yesterday
R2 4618
R1 4567
Pivot 4468 against 4518 yesterday
S1 4435
S2 4354
S3 4303 against 4303 yesterday
Projected High Range 4527 to 4593
Projected Low Range 4481 to 4415
Fib Projected High 4572
Fib Projected Low 4369

 

See the Put call ratio that has almost equalised and the Option pain charts.

Update for 16 Jun 09…

The inevitable happened – after weeks and weeks of up move without a meaningful pause the markets finally all over the world signalled a breather on the rally that has been going on for so long. Now what would be of interest to everyone is the depth of the correction and whether it has the capability to push down the markets to the previous lows. Well I am sure that anyone at this point would ideally tell the direction meaningfully as a second guess and nothing else. What I mean is that there are just too many variables at the moment to say for certain – to which levels the markets are going to go in this correction. On one hand the indicators I follow have still not generated a positional shorts to be held – but then It is as per the indicators that I follow. On the other hand the correction has been the world over with all indices falling more than 2% without exception, and it seems to be the end of the line as far as the good news is concerned. Apart from this there are supports on the lower side that may play out and resistances on the march forward of the indices. So there are a multitude of factors that are going to support any new theory that may crop up giving us the direction. The reliance had played out exactly as predicted, as expected and written yesterday – it fell and fell really hard.

The global cues are as I just pointed out – bleak. Asia was down to start with and so was Europe. Europe started weak and then as the day progressed and came nearer to US opening the markets had another bout of selling – finally breaking the markets and ending at the days lowest levels. FTSE was down 2.61%, DAX down 3.54% and CAC down 3.2%. US too opened red and then went on to touch the lows around the mid session and then recovered a wee bit to close – Dow down 2.13%, Nasdaq down 2.28% and S&P down 2.38%. As I write now – only Nikkei has opened and – it has opened 1.25% in red – no reason to believe as of now that the markets are likely to show some recovery after yesterday’s fall.

On the charts the black candle with the 3 EMA plotted has touched the 15 EMA and the crossover is of 3 EMA below 15 is likely – generating a positional sell signal for all those who are the fans of 315 trading strategy. The volumes were once again progressively lower and the Bollinger Bands have stopped constricting any further. On the ADX –DI line is showing all the signs of crossing above the +DI line once again signalling to remain short. MACD is bearish with the negative divergence increasing. RSI is bearish and so is the Slow Stochastic. The TRIX too is looking down. So after a fairly long time all the signals are negative so as to say. I am looking forward to around the 4350 levels – whether they hold or give way and then see what happens then. In any case below this the levels that I see is 4050…

The Pivot data now…

R3 4733 against 4840 yesterday
R2 4650
R1 4567
Pivot 4518 against 4614 yesterday
S1 4435
S2 4386
S3 4303 against 4408 yesterday
Projected High Range 4542 to 4608
Projected Low Range 4593 to 4527
Fib Projected High 4636
Fib Projected Low 4433

I will end this session now and wait for another day before posting the Option data for Nifty. Best of luck to everyone.

Update for 15 Jun 09…

Okay – let me start this like this – before I start with the article proper let me tell you a story that I came across on the internet by a Steve Austin about the oil prices. I am telling you this as I believe that at a point of time sooner rather than later we will get affected by the oil price and at the moment it does not seem to be a pleasant site.

I have pasted the article from a website and you can reach the site by Clicking Me. I am leaving this link for two reasons – firstly all the articles on the site are eye openers and secondly the credit is his (Steve Austin) and his alone. I quote

“It took only 5 months for the price of oil to plummet from $150 to under $40 in the second part of the year. Meanwhile oil consumption did not even decrease 10%, so what is the real cause of this collapse you may ask?
Hedge funds. Let me explain.
During the first part of 2008, Western economies were already slowing down noticeably and hedge funds gradually pulled trillions of dollars out of the market and parked them in energy ETFs. At the time Chindia's insatiable thirst for oil and the "decoupling" of east/west economies had many believe commodities were a "sure thing", a sound enough tangible insurance to protect overinflated assets scavenged from made-up bubbles. On top of that, by using leverage, profits were multiplied as oil went up, not a bad deal in a recession.
But when the banking industry collapsed, hedge funds had to raise cash by "deleveraging", liquidating their leveraged energy ETF positions sending the price of oil tumbling. Anecdotally shorting of banking ETFs was suspended by the US Securities Commission during that time but not shorting of energy prices, and the leverage mania soon found an escape route in utrashort oil ETFs, compounding the speed of this downward spiral. By December 2008 the oil price had collapsed 75% and frankly, who would complain about cheap gas these days?
As we enter 2009 the oil landscape has reversed dramatically from a year ago. The price of oil is lower than production costs and new exploration projects are being cancelled. China flush with cash is currently buying all the oil it can get its hands on to pump into its strategic reserves. Once arrogant OPEC countries are willing to sell oil at any price to fund government programs and prevent political instability.
One constant however is the depletion of major oil fields, worse than predicted at 9.1% year over year as we close 2008. It's a matter of when not if the economy recovers and when it does, expect a strong bounce back in the price of oil.”

After we see it in the context of the fact that there were some sort of news floating that Govt wants to deregulate the oil pricing and leave it in the markets forces hands till the price of the oil internationally is below 75 Dollars a barrel seems to be in doldrums as the price has already reached the 72 $ + mark in last few days. The govt is likely to have two options – keep the deregulation of oil prices on back foot – and perhaps loose some credibility of an area of thrust and secondly deregulate the prices and upset the inflation – the govt has been careful to ensure does not go out of its hands. classical case of ravine on one side and well on the other. It will be interesting to see how the govt moves about handling this.

Apart from this the Reliance-RNRL case coming up on Monday, decision of some companies not to buy gas from Reliance and the upcoming budget will play a major role in the days to come.

As far as the global cues are concerned – Asia was okay – not considering our markets which are onto 13 weeks of winning streak. Nikkei was 1.55% green – the best performing, Hang Seng was green too at 0.52% up and Strait Times was red at 0.20% down. Europe started the day flat – tried to go green but that became the highest for the day – ending down in red – FTSE down 0.45%, Dax down 0.74% and CAC down 0.26%. The US markets closed mixed with the DOW up 0.32%, Nasdaq down 0.19% and S&P up 0.14%. All in all the markets the world over seems to have run out of the steam they were in till last week.

On the candle sticks there was the second red candle and the 4690 level is presenting a good resistance to the markets that I have a feeling will remain in place for some time to come – till the time the markets corrects and resume its upward journey again. The Bollinger Bands have constricted and are narrowing down quite fast. 3 EMA remains above 15 EMA. Volumes were no great shakes. Though the ADX is still bullish – the +DI line looks down and so does the ADX line (Black) that is not a good sign as the ADX had bounced back from just above 20 level and now seems to be turning back before showing the strength by crossing 40 level. The –DI on the other hand seems to start moving up again. MACD is bearish with increasing negative divergence. RSI has just left the overbought position behind and is looking bearish. Slow stochastic may be the only bullish signal at the moment but once again likely to enter the overbought position soon. The TRIX has also started looking down. For all those who have faith in technicals – it is time to sit on cash once again and wait for opportune time to strike.

Coming on to the pivot data now…

R3 4840
R2 4741
R1 4662
Pivot 4614
S1 4535
S2 4487
S3 4408
Projected High Range 4638 to 4701
Projected Low Range 4684 to 4621
Fib Projected High 4727
Fib Projected Low 4531

I will not post the usual option pain and Put call ratio for Nifty but will do so for Reliance. All those who are experts looking out this type of data – though the reliance was one of the only stalwart in last trading session – the question is – Is reliance in big time trouble?

I will end my write up here and will wish you all luck for the coming few days. If you do sit on some cash then wait for some 10-15% correction before coming back in.

Update for 08 Jun 09

It had been an unexpected day yesterday (like a long time now) when markets – expected to correct somewhat. What the markets are doing is that it is looking around for direction that is not available as of now. Take is this way that the markets want to correct as most of the indicators are overbought – but cannot do so as the environment is bullish. This makes us to be basically unsure with a bullish undertone. There is a question that is haunting my mind and am sure a lot of minds like mine – where are we off to now?

What is driving Our markets can be a good question at this stage. Is it only the FII money pouring in or we have the retail lining up for a mad rush? We can see from this table that I have inserted about the FII/DII data that FIIs are buying and DIIs are net sellers. But also see that a positive volumes of 350 Cr has actually moved the markets (Nifty) up by just 14 odd points on closing. Does it mean that the FIIs are moving on to the second tier of stocks? FIIs who are continuing to buy on our bourses or the DIIs who are modestly selling almost every day.

The global cues cannot be better than the one we are having at the moment. Asia closed up – Nikkei up 1.02%, Hang Seng  0.96% in green and Strait Times up 1.40% in green. The Europe opened green and then traded in a fairly narrow band. however just after mid session the European markets jumped up – was unable to sustain and closed somewhat off their highs. FTSE closed 1.18% in green, DAX up 0.24% and CAC up 0.82%. The barometer of the world economy – US opened in green and went on to touch the flat line – spiked up and then closed flat. DOW up 0.15%, Nasdaq down 0.03% and S&P down 0.25%. We will have to wait a while for the markets to open.

The markets have continued on a rally for an unstoppable 13th straight week and the sentiments more than anything else have paved this way. The economic data that has been released from US, Germany, UK, Japan and China indicates towards a gradual recovery – more than recovery perhaps is the indication that the downside has bottomed. All participants are now worried about the direction of  the markets and many are not fully convinced that there is a further upside to this levels. On the other hand the downside has on the previous occasions also been limited when the markets wanted to correct due to the buying that prevents any sharp fall. There is important global economic data that is due and that might show direction in the coming week.

The Indian markets have remained volatile and has managed to close around the 4600 mark. Nifty looks bearish only if we take into consideration that all indicators are indicating profit booking. 4640 looks as a resistance for nifty on the upside and supports of 4350 and 4110 seems to be strong. Two stocks that are overbought are DLF and L&T and may come under significant selling pressure in the coming weeks. Some more factors that may affect the markets in the coming weeks are:

• Unemployment in Europe continues rising.
• US home sales seem to be stabilising as the mortgage interest rates are at its lowest.
• Euro GDP has contracted just 2.5% for the fourth consecutive quarter (improvement over the contraction of 4.8% in first quarter of 2008)
• UPA is to shortly unveil its disinvestment agenda with a target of 10,000 Cr for a 12 month period.
• In order to check the dominance of Gail and Reliance in the gas transmission segment the govt has planned to take up all the main gas pipeline projects to ensure their speedy implementation.
• Our growth rate has come down to 5.8% for the fourth quarter of 2008-09 and 6.7% for the entire year – much better than expected.

The gold has remained positive but stable but the crude has risen more than 6%. This will eventually put pressure on the govt and may result in some bad news either way. What I mean is that if the prices are unchanged then the investors following the markets may be susceptible and if they do change then the change is too close to the election that have gone buy and might be easy to mudsling on the govt.

On the charts the candle once again was a small white one. Maybe it is showing more confusion than anything else. We are on the upper half of the Bollinger Bands but not the top. 3 EMA and the 15 EMA are as of now running parallel to each other. Both lines are on their way up so a crossover – unless there is a strong negative move is not likely to happen. Volumes have remained to be good. The ADX line has turned from near the 20 mark to look up now at 38.18. The green line that had briefly crossed below the red line is seeming confident. MACD divergence is very small – but positive (bullish). Slow Stochastics are overbought and bearish at the moment. RSI continues to be overbought at 77.05. All in all – the bullish signals overweigh but there are strong signals of markets being overbought.

I think that Pivot data should be presented now.

R3 4711
R2 4669
R1 4627
Pivot 4594
S1 4552
S2 4519
S3 4477
Projected High Range 4611 to 4648
Projected Low Range 4623 to 4586

Fib Projected high 4656

Fib Projected low 4540

And finally the option pain and Put Call ratio…

Of Bulls and Bears… Update for 01 Jun 09

The market is the king and no one or nothing else matters. Infact the markets have remained defiant of following any indicators at all. There is a reason for that and reason in justifiably good. We have had the GDP above the expected figures. The results of Sail, L&T and M&M were better than expected – the ministers generally shouted “Will Perform” in unison and FIIs continue with their buying spree. Then what the hell is wrong with me to be a pessimist? There is a talk of de-regulation of the govt pricing regime for Oil, There will be some anti dumping measures in steel and infrastructure will get a boost.

Well I would put it this way Firstly, the news – or the good part of it is now over – there are no more surprises or statements that will come out for some time to come. Oil deregulation part is good but had a look at the oil – inching above the 66$ per barrel mark? Steel taxes on cheap imports is good but realise that it will be expensive for the consumer who is already under pressure from spiked up real estate? Finally see the figures of FII and DII trading data? Net value is positive but do not ignore the sell value – it has been 5264.8 Cr. Once again the money flow from the FIIs is of the proportion that them going out will upset our cart. These are the reasons along with the technicals that make me say that – no down trend perhaps but a correction of 10-15% should be around the corner.

On the global cues front Asia closed with Nikkei up thee quarters of a percent, Hang Seng was up was up was up 1.6% and Strait Times were up 1.55%. Though the European markets did end positive – they closed around the lower levels. FTSE was up 0.69%, DAX up 0.16% and CAC up 0.43%. US traded the entire day along the flat line but ended positive – climbing at the last moment to end Dow green 1.15%, Nasdaq up 1.29% and S&P up 1.36%. In asia the market is trading green. Nikkei started red but quickly climbed up in green and is now at 0.79%, hang Seng is up 2.23% and Strait Times up 1.89%.

As far as the charts are concerned – they remain bullish and overbought. From the beginning – let us see. The candles are bullish and nearing the upper range of the Bollinger bands. All lower EMAs are above the Larger figures so the uptrend continues. The volumes are good – 148% of the last 50 Day average and that is good. On ADX the +DI is above the –DI so it is bullish. The ADX (14) is at 25 and any drop lower will make it go into a range bound market. MACD is bullish without any iota of a doubt. Slow Stochastic is Bullish and so is RSI – the RSI is in the overbought territory. So most of the indicators do remain firmly bullish. It would be interesting to see the day unfold today. It should ideally open positive but am not as sure about the closing.

I Think that it is worth seeing Options data also check out the graphs…

And before I pen off the Pivot levels…

R3 4636
R2 4573
R1 4510
Pivot 4425
S1 4362
S2 4277
S3 4214
Projected High Range 4468 to 4542
Projected Low Range 4434 to 4360

Fib Projected high 4528

Fib Projected low 4299

I would wish everyone luck and may you all make money.

Update for 29 May 09

Unlike what was expected in this time of the year, the weather has so far been good here in Chandigarh. The mornings are pleasant enough to sit outside and enjoy the city beautiful. Many a times when I was small I used to wonder why all our cities cannot be like this – not that I have found out the answer till now. We, as a nation are built up fighting and living a crisis to crisis – and do not plan ahead as it should ideally be done, that is why perhaps number of planned cities in our country can be counted on the fingers of left hand of a person who has only three of them ;-):- Coming to the markets – the markets showed strength yesterday inspite of the likelyhood of the anticipated long unwinding that could / should have taken place yesterday. That strength stood the test of negative opening of markets in Europe. I would not be able to comment on whether we are disconnected with the world markets as of now or not but to a layman (like me) it seems so as we are often forging our own paths.

Like I mentioned above the European markets closed with negative bias of around a percentage point. FTSE was down 0.65%, DAX down 1.36% and CAC was down 0.95%. The US markets opened flat and spent better part of the trading day seeking direction – often visiting red territories and bouncing back along the flat line. After the midsession – the markets firmed up and ended almost at the best levels for the day. DOW was up 1.25%, Nasdaq up 1.2% and S&P up 1.54%. This rally or upswing has been attributed to the smooth auction of the 7 year Treasury note.  The question of GM’s likely bankruptcy still haunts the investors there. The mortgage crisis seems to be spreading as reported there where in the stage has been reached – the borrowers with good credit ratings have started defaulting on the cards because of job losses and pay cuts.

On the technicals side we had a small white candle like I mentioned earlier against the expected cooling off of long build up during the month. That may happen today. We are on the upper edge of the Bollinger Band and all lower EMAs are comfortably trailing above the larger ones. This indicates a continuation of the uptrend. Day before 2 EMA had crossed below the 4 EMA and might have signalled a beginning of downtrend but this was corrected the next day when the made a 100 point plus candle. The volumes have been good, infact very good considering our past few months. MACD is bullish. RSI is back into the overbought zone. ADX is interesting. As of past few days the – DI had crossed above the +DI but it has reversed again giving positive undertones to ADX. Only trouble is that the ADX is at 22.97 and that shows that the trend is very weak – so I would expect either a trend reversal of settling down in a range bound market for some time. Slow Stochastic has turned bullish once again. TRIX is looking up. So here are all the indicators I follow.

FIIs bought a net of 1859 Cr worth yesterday and the DIIs sold 451 Cr worth. The Pivot data for all those interested.

R3 4454
R2 4415
R1 4376
Pivot 4315
S1 4276
S2 4215
S3 4176
Projected High Range 4345 to 4395
Projected Low Range 4312 to 4262

Fib Projected high 4318

Fib Projected low 4226

I will end here – I am not inserting the Options charts as the Options oracle is not playing up. This weekend I intend discussing how all the indications generated by ADX and its strengths and weaknesses.

Update for 28 May 09…

On the onset let me apologise to you for being out of touch for so long. I had mentioned one of the days earlier that I was expected to go on leave. I am on leave, and having a ball of a time the only problem that I faced was -- there was no connectivity at all. Believe you me no GPRS, no broadband, no TV. In hearts of hearts I missed all these but then I believe it is wonderful to be unplugged from the world once a while. In fact I had beginning to enjoy it actually but then today I am online with a brand-new reliance broadband dongle. There was no way that I was going to be unplugged for so long.

 

In the meanwhile the markets have been in a topsy-turvy, gaining as there was no more. The news has been good I do not hope it at all and as long as the smaller the EMA's are trailing above the larger EMA's there is no way that the markets are showing any weakness. But -- BUT remains – I often ask myself a single question – what I have to gain or loose by adjusting my forethoughts to suite the mood that is prevalent in the markets and ride with sentiments? See I too have no doubts that there is euphoria in the markets – the govt is much more stable than before etc etc – but even so the govt is unlikely to present a miracle drug to come out of the present situation – unless ofcourse there is a recovery all over the world I feel that we should remain range bound for perhaps a long time to come meanwhile the ride the good times.

 

Seeing the performance of Asia yesterday – Europe opened green and then slumped negative and then oscillated till the closing – closing mainly flat with FTSE up in green 0.1%, DAX green 0.3% and CAC green 0.76%. US opened flat and then after midsession took a hit where in it finished around the lowest point of the day – DOW ended at 2.05% red, Nasdaq down 1.11% and S&P down 1.9%. Asia has taken these cues for starting the day – Nikkei started in deep red but almost immediately recovered most of the losses – trailing just 0.05% down – Strait Times is down 1.51%.

 

The charts are the interesting part that agree with my line of thinking. They are as apprehensive as I am (;-D):-   The candle yesterday was a tall and white one and we are once again attempting to trail or rather come to atleast the middle of the Bollinger bands. The attempt may or may not be successful and the market might try to test the middle of Bollinger bands at around 4000 levels. The 3 EMA was trying to mesh with the running 15 EMA but the plans were cut short with the today’s white candle. Cut short or delayed is something that we will come to know at some later date. Volumes have been good. Now the ADX – it has been long and it has not been lending any support to this run up inspite of the good volumes that we see. No uncertainty about a negative divergence. MACD is bullish without a doubt. The slow Stochastic are bearish with an attempt to become bullish. RSI is overbought at 70.26.

 

So that is about all – from my side the deductions are yours but I am more certain perhaps of a downside than an upside. Best of luck to all. I will try to be regular but this holiday binging may not allow me to do so.

Where are we heading too? Update for 18 May 09

About a month back Jaggu made a mention to me about a phrase - ‘The Black Swan’ effect. I did a google and realised that it is one of the theories that is there on the unexpected. Anyway – later when I was in Mumbai I saw the book  written by Nassim Nicholas Taleb – The Black Swan. Going through it – it does has a point of view that is difficult to ignore – and then I see our markets and how we (the retail) behave – I see the book in the different light. We – the retail are always behind times to see the truth or the untruth. We are in a state of denial till the time it is already too late. Then too we really do not know how to react when the situation is there in front of us. Then our other habits or lack of the same always is against us – working to eat us slowly making us hollow. No – don’t get me wrong. I know of people who had a strategy which has worked – but it has worked not because it was foolproof – but it worked because the courage of conviction was just too much for it not to do otherwise.

After the elections are over and there is a verdict that the Congress will make the next govt at the centre – that factor of uncertainty is out of our lives – even if temporarily. Now inspite of the result and all well on this front – the mind refuses to see this blindly and options stare us – the options that may or may not to be our liking.

  Frankly the present situation is the best anyone would have hoped for. A stable UPA with minimal outside support. So much so that even people like ‘Lalu’ have admitted that they have lost out by not supporting Congress and trying to break away. Now as far as the reaction in the markets is concerned there are two schools of thought. One says that the worst – atleast as far as India is concerned is over and now we should loo forward to a bull market. The second says that the worst is not over yet and we are still to see the worst.

Now where do I fit in all this? Well I frankly feel that we have a situation were we can see the mix of both the theories. We have a good upswing in the short term followed by a decent downturn. Well why do I feel like this? For one – there are a lot of people that were sitting on sidelines – the retail and likewise who can now see that a stable govt is it and start investing. That should help us a good 10-15% upswing – or the continuation of the rally upside. But then at the end of the day someone has to realise that there is now no uncertainty – where good news is one of the option. To say that the worst is over may be too premature. The jobless data, housing, projected global growth or what ever – they say that we have hit the bottom of the bad news – but that does not in any way mean that the good news is on its way. It will take a long time for the markets to recover to make any substantial highs – and we may enter a real consolidation phase where we remain in a narrow band for some time to come. All the same the Indian markets should ideally outperform and we should see good money flowing in now.

As far as the candles are concerned – we are firmly above all the EMAs and above the trend line that most of us would have drawn starting march 12th. We have not so far dropped below the middle of the Bollinger bands. The volumes seems to be okay. ADX is bullish but the ADX line as such continues to show negative divergence. MACD is still showing a beginning of a bearish mood. RSI is bullish with negative divergence. The TRIX is looking down. Slow stochastic was on its way down but has turned back and become bullish around the 50 marker.

Today’s trading – as far as input is concerned – everyone is expecting a 200+ opening on Nifty. I am at a loss of words and will not join the crowd even though it can be a reality as I feel the retail will be led to be bullish. Afterall someone has to be culled at the end of the day. The Pivot data goes something like this: -

R3 3775
R2 3740
R1 3705
Pivot 3651
S1 3616
S2 3562
S3 3527
Projected High Range 3678 to 3723
Projected Low Range 3649 to 3604

Fib Projected high 3710

Fib Projected low 3572

I will skip option data since it is today and subsequently that I am expecting to see a sea change so will see what happens today. Best of luck and May you make a lots of money.

Turbulence ahead… Update for 14 May

The market stands awaiting the results of the elections. With each news – the hope and fear alternates and that is how the market is likely to react till the time the certainty of the Party that has to form govt is known. The news as of now shows no clarity on the issue. and the exit polls have the dubious reputation of being wrong by a margin at times. The global markets continue bleeding meanwhile as the news from the US retail sales and the foreclosures is not good and the hopes of an early recovery from this recession are dashed.

On the global front the Nikkei ended 41 points in green that is 0.45% up, Hang Seng was half a percent down and Strait times was 7 points or 0.33% in green. In Europe FTSE was a drop of 2.13%, Dax down 2.61% and CAC down 2.42%. US opened red and then closed at one of the worst levels for the day Dow down 2.18%, Nasdaq down 3.01% and S&P down 2.69%. No good news on this front either.

Coming on to the charts – I am sorry to say but the bad news continues. The candles had left the upper end of the Bollinger Bands a few days back and seems in no hurry to hug the upper band now.The volumes seem to be shade higher than yesterday. ADX continues to be  Bullish with negative divergence. MACD is bearish and the RSI is bullish with negative divergence. Slow Stochastic is bearish. TRIX is looking down. With all these indications topsy turvy the volatility is likely to continue.

The Pivot data is as given below…

R3 3808 against 3848
R2 3750
R1 3692
Pivot 3651 against 3635
S1 3593
S2 3552
S3 3494 against 3422
Projected High Range 3672 to 3721
Projected Low Range 3696 to 3647

I guess that – this should be all – the markets are likely to to take more cues from the election results than anything else. So I will pen off now.

Update for 13 May 09

We would be doing something right – or perhaps something wrong – the markets are unstoppable. Do the markets know something that we do not know? Like there is a party coming to power with absolute majority? Or perhaps that the Oil is about to go down to 10 bucks or something – after all there has to be something that we do not know. The market do know a lot of things perhaps – but what is my next big question. At a time when all the global markets are tumbling away to glory – we defy every rule in the book and continue touching new heights. Are the results already out? Well I will rely on some one else to give us a fundamental touch and will continue with the technicals. Just one thing before pouring the charts out – both the FIIs and DIIs bought 452 and 171 Cr worth respectively.

As far as the global cues were concerned that weakness is there. More than weakness perhaps the doubt to catch a trend is there – afterall the run up has been for quite some time now. In Asia Nikkei was in red – down 1.62% but Hang Seng after opening red, going green, dipping red again closed finally flat at 0.38% green. Strait Times too was green at 0.56% up. Europe opened red – went green and ended flat with negative bias. FTSE was red 0.22%, DAX red with 0.26% and CAC down 0.54%. US started its day in green but immediately slipped red on profit booking and now past mid session is still trailing red. DOW as of now is down 0.21%, Nasdaq down 1.54% and S&P down 0.9%. There is still some time to go before they close so really it would be difficult to take a call – but the markets are perhaps giving an indication of trying to recover.

Okay before I begin with the charts. I would wander in the realm of unsurity. I will make a statement that may be wrong and would welcome if I am or can be corrected by anyone on this account. The Purist followers of 315 strategy would say that this is the third indication to pyramid their holdings – meaning build one more long. I had earlier on may 5th had said that there is an indication by the candle to exit longs (not equal to go short). If this is the third indication of Pyramid then obviously I was wrong on what I said about 5th. It would also follow – for the purists I mean that this is the last time they Pyramid and there will be no long build up till the Exit longs would figure out on the charts. The candle today was tall and white but still stood short of trailing the upper Bollinger bands. The volumes were also somewhat higher. We have as per the Trailing EMA lines a perfect run up. ADX negative divergence however continues unabated. Hey it is still bullish though. MACD some how shows a negative divergence inspite of the market ending so much up in green. RSI is bullish and I will not talk about the RSI divergence as neither is the market off to a new high – nor is the RSI to a low – but the Negative divergence as I drew yesterday is true and continues. Slow stochastic is still bearish. I really do not know what are we or what are the markets trying to prove. The TRIX too looks down. The fact is that the technicals are not supporting the bullish sentiment as the markets go forward. If I were you – I would be very, very, very cautious. This has the build up of washing away a lot of your hard earned money without giving you a reason. Today I have done something else – I have also pulled up the chart of reliance. I am posting the same. It is in some ways mirroring the Nifty chart – have a look.

The Pivot data is something like this----

R3 3848 against 3786
R2 3792
R1 3736
Pivot 3635 against 3582
S1 3579
S2 3478
S3 3422 against 3379
Projected High Range 3686 to 3764
Projected Low Range 3617 to 3539

The Fib Numbers are High of 3733 and low of 3491.

The option pain and the Put call ratio is as in the charts. Hope we continue this path of the upswing – but be on your guard.

Red! Red! Update for 12 May 09

The colour of the markets have turned red after almost two complete months of run up. Now the moot question will be – where do the markets seek support and arrest the downfall. It will be important as that will signal in the real term – whether or not the recovery from the sustained bear market was real or we are still in the vicious cycle of bear hammering. However yesterday – even reliance – that had held on to its previous levels above 1900 cracked and was partly responsible for showing the way down.

The Asia was red. The Europe too was red with FTSE down 0.6%, DAX down 0.96% and CAC down 1.93%. The US markets too ended in red. DOW and S&P did not attempt to go green but Nasdaq did try and skimped with the green for some time – though not far from the flat line. The DOW ended at 1.82% in red, Nasdaq 0.45% in red and S&P 2.15% in red. Believe me if it the down turn gets contained then this will be a very healthy time for the markets to consolidate and shed some weak hands now.

On the charts the weakness is evident with it being a second red candle and the candles leaving the upper Bollinger Bands. Now that the markets are showing signs of weakness the globe over it is important that we see some Fibonacci numbers yet again. The 32.8% retracement is to 3260 levels, 50% retracement to 3128 levels and 61.8% retracement rests at 2994 levels. I am sure that these levels will play very important role in the days to come. The 15 EMA is at 3502 and 3 EMA is at 3595. If the drop is substantial today then the 315 should generate a sell signal. The volumes were not good. Reliance too traded 74% of the last 50day average volumes. The ADX is bullish still but the –DI is fast moving down and likely that the ADX will have +DI going below –DI in a day or so. MACD shows negative divergence and is bearish. RSI looks down. TRIX looks down. The Slow Stochastic too looks down and is bearish.

The Pivot data is something like this----

R3 3786
R2 3708
R1 3631
Pivot 3582
S1 3505
S2 3456
S3 3379
Projected High Range 3607 to 3670
Projected Low Range 3650 to 3587

Fib Projected High 3694
Fib Projected Low 3499

Before I pen off – see the amount of faith the put writers have on the markets to go lower. Bearish in hearts of hearts? Like I said – it will be another interesting day today.

 

The noises… Update for 08 May 09

There were noises that were getting to hammer my head and suddenly I find that the entire trend – atleast verbally is changing. A week earlier – everyone was shouting – we are out of the woods – buy on dips. Then suddenly the mood was not so buyout – some heads were saying – this may turn out to be a typical bear market rally… and here we are today – the markets were firm but ?? no one was saying any to enter the markets. Afraid? perhaps. Uncertain? perhaps – but now suddenly the noises are saying that there may be a downside not expected earlier. Whom to trust – atleast I do not know. Infact so much so that I do no longer trust myself too. Seeing the US markets – atleast there is an immediate danger of some downside – 10% or 15% or 50% I do not know and I will not try to crystal graze and tell you but the threat of downside looms large. In any case we will have to wait and see where we head to. And it seems that the wait is not likely to be very long.

The global cues are what took us to higher levels – along with the manipulations of course. You could distinctly see the counters being jacked up to keep the markets up. It is besides the point that after some time the metals gave phenomenal support to the index. Asia was on the seventh heaven – Nikkei opened after a gap of a few days and was up 4.55%, Hang Seng was up 2.28% in green and Strait Times was up 2.87%.Europe opened well but could sense the US and closed red. FTSE was up 0.05% and that is all. DAX and CAC were in red 1.57% and 0.97% respectively. US was awaiting the results of the Bank stress tests when a small controversy cropped up. It had spoiled the markets as it is and then was the Govt Bond auction drawing a bad response and have pulled the US markets down – Dow is now 1.58% in red, Nasdaq down 2.9% and S&P down 1.74%. Another about an hour plus for the US markets to close – likely to close red only.

On the candle sticks the candle was large and white. we are on the upper edge of the Bollinger band once again. The problem was that the volumes were poor. The ADX is bullish but loosing steam. MACD is bullish but over bought. RSI too is bullish but overbought. Slow Stochastic are with the %K line below the %D line and bearish and in overbought condition. The TRIX is looking down. So here we are.

Let us see the pivot data…

R3 3767 against 3826
R2 3739 against 3759
R1 3711 against3692
Pivot 3664 against 3650
S1 3636 against 3583
S2 3589 against 3541
S3 3561 against 3474
Projected High Range 3687 to 3725
Projected Low Range 3659 to 3621
Fib Projected High 3712
Fib Projected Low 3596

I would have skipped the Options charts but thought that it may be interesting even though I am late like hell. Here you go..

Beginning of an end?… Update for 07 May 09

Those of who used to look at the chart I post they would find a small and subtle difference in the chart I post. I have done away with the 5 and 20 EMA and introduced 3 and 15 EMA. The reason was – perhaps I wanted to see how accurate the 315 trading strategy is. I came across many people who are all out swearing with this Strategy – so I said to myself – what goes out of my pocket to try it for some time. In any case before I decided to try and follow it – I went back almost two years plotting how well it worked and I must say that it did show a lot of promise. So for all who are interested the 3 EMA and 15 EMA will be part of the charts that I put forward every day.

On the Global cues front the Asia was mixed and Europe was perhaps cautiously  positive. FTSE started the day deep red and that was the lowest it reached. It kept recovering reaching the peak just about 2 hours before closing. Then it came down to close 1.37% in green. DAX and CAC followed almost the same trend to close 0.57% and 1.81% in green. In US the Tech related Nasdaq is lagging other indices and DOW closed the day after good amount of volatility 1.21% in green, Nasdaq up 0.28% and S&P up 1.74%. The fear of the bank ‘Stress Tests’ seems to be dying down. Now Nikkei and Strait Times have opened strong Nikkei up 4.18% and Strait Times 2.15%.

On the charts – once again referring to the 315 strategy yesterdays Doji said ‘book profits on longs’. In 315 – the sell longs does not necessarily say that you have to go short – so whenever that signal is generated I will announce it here. The candle has barely left the upper Bollinger band and unlike the earlier two times – this time the candles are not violating the bands. Se there is no clear signal as to where we are going. The volumes seem good. ADX is bullish – and the kind of doubts it was generating are over for the time being. MACD has given Bullish divergence again. RSI remains bullish  and is just a wee bit out of the  overbought zone. The slow Stochastic are bullish but in the overbought territory. Yesterday on Stockezy there was a remarks – watch out for 17th May and I have a couple of mails too posting the caution about the approaching 15/17 May – hey guys I know that the elections will be terminating and the horse trading may just begin in Indian political scene – but the threat to watch out for? let us see.

Let us see the Pivot data…

R3 3826
R2 3759
R1 3692
Pivot 3650
S1 3583
S2 3541
S3 3474
Projected High Range 3671 to 3725
Projected Low Range 3708 to 3654
Fib Projected High 3746
Fib Projected Low 3578

The Put call ratio is 1.385… meaning puts still are being written more than the calls – the ratio is not as high as it was last month but still in favour of the puts. Please see the graphs of Option pain and Put call ratio.

I am Trying hard to complete another Options lesson. I do not want to discuss any strategy before we are all at par at understand the basics. What has happened is that I have been posed some very basic questions regarding options on mail – all of which I have not been able to answer. So if you plan to touch the options – get your basics right.

Bulls – and the three Aces…. Update for 5th May 09

Wow what a day it was and like for so many days now the technicals did nothing to show the path. Infact they have become a joke with resistances being cut like a hot knife in butter. On the other hand each support stands put like the great wall of china… visible right from the moon. In any case if the stock market is to be a zero sum game then we have to loose for the other party to win. Each of our wins are just to keep us hungry with blood on our lips for more and the “operators” have their fill. The markets will not fall till the time everyone of you is convinced that we are bullish and we are sitting on good enough positions to donate money to the operators. Infact so much so that I feel that it is not worth going through the rigmarole of seeing the charts and trying to read the mood of the markets. It is just not listening to the technicals at all. In one stroke the markets have broken through all the so called resistances and went up to the Upper Bollinger bands. Of course that is Bullish and ofcourse I am bearish. Sh*cks – I can almost write a book now as I see the markets from the other side of the hill.

The Global cues? Asia was in the seventh heaven. Except for Nikkie that gained just about 1.69% – rest were competing with each other to out pace the other in the climb. Our markets were too in the same rat race finally ending a good 6.41% in green on Sensex and 5.85% up on Nifty. The volumes were not out of the world but 121% last 50 day average. Europe was cautious with FTSE ending 0.01% in red – basically flat with DAX up 2.79% and CAC up 2.47% – the major gains coming basically in last two hours of to the closing for the day. The mood in US was buoyant to say the least .. Dow up 2.61%, Nasdaq up 2.58% and S&P up 3.39%. The S&P has as of now washed off all its losses for the year and has come to green for the year 2009. Quite an achievement so as to say. As of the morning the Nikkei is closed – Hang Seng and Strait Times opened as expected – strong and are some how now seems to be giving away their gains. Hang Seng is volatile with the index up 0.51% and Strait Times up 2.01%.

On the Candle sticks – The candle was a kind of  - not seen since long time. A handsomely tall and white. It went on to touch the upper Bollinger band and if we  are now to trail the upper edge once again then there would be another good run up. Needless to say that we are as of now safely above any moving average you can possibly think of or invent. The ADX is bullish and the +DI gets a new lease of life. MACD has ticked to bullish once again and RSI has become bullish – but in overbought territory. TRIX that looked down yesterday is non committal. Slow Stochastic is bullish but confused. And once again we are above the trend line that I drew and presented yesterday.

Though all the charts are showing a tall white candle – seeing the market run up yesterday we may decipher it as a gap. I will leave it at that as I do not have enough knowledge to substantiate it. The Put build up continues on the options – the ratio is not as bad as last month but all the same the Puts are out pacing the calls. Only time will tell how things will work out in days to come.

I will move on to the Pivot data now: -

R3 3850
R2 3784
R1 3719
Pivot 3598
S1 3533
S2 3412
S3 3347
Projected High Range 3659 to 3752
Projected Low Range 3756 to 3483
Fib Projected High 3714
Fib Projected Low 3427

I am sick of being against the market for so long so I will not say anything regarding how I feel about the markets. Cheers and may you be on the right side of the markets ;-)

PS: my night flying phase has commenced and I will be running on a very tight schedule so please pardon me if I miss an update or two.

Of Bulls and Bears… Update for 04 May 09

There has been news over the weekend and there is important news to come in coming weeks – that ranges from our election results to the jobless data from the US. A lot has also happened while we were logged on to the bullish two straight months. There have been results coming in – mixed to say the least – as per expectations some and below expectations others. The technicals have been indicating the bullish makeover for a fairly long time. Now we are standing at another crossroads that can take us either way. All those retail investors who are yet to make up their minds and take positions in the markets would do well to wait some more time. These cross roads can show us new highs or new lows. We are trailing a very strong support on the bottom and fairly strong resistance on the top. The markets have to show the direction and whichever way it swings may show some strong move. The 30% or so correction we have had is purely bear rally and we are no way out of the woods now. So hold on to your horses while we decide where to head off next.

Okay before boring you more let me start with the global cues. Asia was positive with Nikkei gaining 1.69%, Hang Seng gaining a good 3.77%. Europe was mixed due to FTSE closing red 0.01% but Dax and CAC closed up 1.38% in green – both. And incidentally this was not the closing at the best levels for both of them. US opened flat and then went red – finally to make and attempt to recover good into green but finally finishing just above the flat line. DOW was in 0.54% in green, Nasdaq was 0.11% in green and S&P 0.54% in green. Internationally the Swine Flu has caused a lot of anxiety with US Homeland security secretary declaring a “Public Health Emergency”. The main industries coming under pressure because of this is Pork, Travel, Hotels, Airlines and Cruise operators.

On the candles front There seems to be a unsaid resistance at the present level that the markets may have to break forcefully to go any further up. See the chart – we seem to have now tested this top multiple times. This top is at around 3500 + levels. The second is that if we draw a trend line and call it trend line No 1 (as shown in the chart) we will see that it did lend support to the market twice – then markets violated it once – bounced back above that – but unfortunately even with the white candle on Wednesday we are trailing below that trend line as of now. Second is if we take the Trend line 2 – then though we may be getting support here but the fact remains that this is the first time the line has tested this level so the trend cannot be substantiated. This is the reason that I say that the markets are in a confused state and we should wait a bit more before taking sides.

Now the rest of the candles. We seems to be static with the Bollinger bands moving up slowly so the mid point too seems to be moving up. As of now we are comfortably above any moving average we can think of. We are above 5,20,50,100,200… EMAs so the bullish trend cannot be challenged on this ground at all. The volumes are again petering out and that seems bad. The ADX is bullish but the strength has been reducing since last week or so. The MACD has a negative divergence – is bearish. RSI Bearish and Slow Stochastic is bearish. So as far as the technicals I read are concerned – the tilt seems to weigh towards the Bears. However as always the markets will decide and tell what they feel about the technicals. And – one of the forward looking indicator that I trust is TRIX and it is definitely looking down. So be very very cautious should you decide to be bullish.

As the old month

has gone by I feel it is important that we see how the Options data shapes up. The put call ratio is >1 as seen from the chart and the Option smile show 3300 as of now. Check out the charts.

That crazed Put build up has however finished and we are down to more saner levels so now if the markets go down we may see call build up with the ratio going in favour of calls and that should give bears a reason to rejoice. I have nothing left now. Best of luck for the day tomorrow.