Wednesday, July 16, 2008

Nothing lasts for ever............ nor will your money at this rate.

Jokes apart - how long do you think will this down trend continue? Can't last for ever but the jitters it is giving evreyone is nobody's business! On the day when Asia closed green (flat to green) Europe was well into green territory and so is US - then what is wrong with our markets. As of now US is dancing green - 1.5% on an average. Is our political system creating so much havoc? To many questions and little or no answers. I really do not care which way we close as I had really expected only a 200 point rise before we march down and recovery expected by me was not meaningful - however now I do expect a recovery and there is none in sight.

Fear not - the recovery may be painfully slow but now when it comes it will take us better levels. I am not too concerned because as I put it in fauji parlance - We Kalu Indians have a habit of overreacting in all situations - we were best performing markets and now we are the worst performing markets. We have a habit of hyping all events and that is about it and that is what is happening. The recovery now will be as sharp as the fall and I am confident about it.

Well till that right time comes - here is what I feel the charts say. The situation is not good with this black candle. Only thing is that the size has reduced and the relentless selling that was there was missing - there was bargain hunting and there were sectors and stocks that were in green with conviction. The MACD red line has finally given up and is now below the blue line. I would still not call it too bad. RSI is doing well so far. In the Slow Stochastics the red line has already reached the oversold location with the blue line following. Will take time to settle there so the indication so far is not so good. StochRSI is still not oversold but fast reaching the oversold territory - mind you as said a no of times before - it can remain oversold for long periods of time. Sorry to disappoint every time I list the TRIX - it is still looking up and Jaggu's TRIN will be left to him that can be seen in the morning. I feel it should be in highly bullish area now.

I had listed a combination of two stocks - one on the short and second on the long. The idea is that if both are dropping then profit and loss will cancel out each other. On the other hand on a day like to day - the bullish one should go up and short should go down. I would recommend Aban for long and HDFC for going short. If you have a stomach for this kind of ride you may try it out. But hey remember read the disclaimer below before you enter this position. Entry and exit is an art and I might not do it myself. All the profit is yours to keep and loss too is yours without cribs.

Best of luck to all.


allvoices

Tuesday, July 15, 2008

Drop in oil may give a break...... hope you are not short overnight!

Like I said yesterday, there topsy turvy will continue - all the same we have broken the previously laid down support and are once again on our way to go further down. Finally the time has come when the analysts were saying that the selling was not the result of selling in Futures and options but was done by dumping cash stocks. This ideally gets us to the last stage of panic. There is nothing there after expect that after this stage finally is over the retail will take a long time to gain confidence and step back into the markets. Ofcourse after selling his stock at the very bottom - he will pick it back up when the markets build euphoria and are at a high. That's the cycle we / retail investor goes through. Rather than slowly build a portfolio now - the dumping has started.

There seems to be two significant news in the world markets - firstly oil dropped 7 odd dollars and Intel posted better than expected Q2 results. That boosted the US markets to come off their lows- go green - but ended once again into red - but not to the lows seen in early trading. DOW and S&P500 about a percent down each and Nasdaq flat in green. This prompted Nikkei to perhaps open flat go in green and is now trading confused near the flat line only. Strait times too has opened green. If Asia remains flat or green - it may prompt some recovery after the blood shed we say yesterday. Only problem is that our domestic news on politics is too overwhelming to be ignored.

To candles now. Nifty has violated the 2nd jul low of 3848 by 12 points but managed to close above it. If we violate it again then we are going down once again for sure but I personally would not think so. Unfortunately the markets have never listened to me. MACD after remaining bullish for so many days and taking a beating - has started to give up and red closing today will get the red line below the blue line definitely and turn the tables on MACD. RSI will too will give up at this rate. Stochastic had given up a long time back and was already giving bearish signals. That leaves up with TRIX and surprisingly the TRIX still holds it s head above water and looks up. StochRSI too has dropped to 60-65 levels and I would call it an improvement.

As I am about to press the publish button - Nikkei dives down and is definitely down quarter a percent and Straits still sails green but just. We should have gone to just short of 4400 to have begin this journey southwards - but then markets have decided and done what it felt the best. So here we are. A red opening with a further downside is a possibility but will not be good at all. I would expect a flat opening with some recovery as a lot of index heavies are in middle of nowhere actually - neither overbought - nor oversold but still with some positive indicators. But then as I said the market never believes me or follows me. I am as sc**wed up as anyone else so make your opinion as to what the market will do today.

Happy trading - If you have survived so long then what is these few days here and there. Best of luck - and do not forget to see Jaggu's TRIN before forming opinion.


allvoices

The party is about to begin............ don't be naked with shorts

Many indicators are turning bullish - the pressure is now being kept up by politics to remain bearish - the day it is released - for good or for bad - we may see a good recovery from the lows and might give nightmares to shorts.

I reached back well past mid night so will not spend too much time and will go ahead with what I feel about the markets. As always a run down of the Europe and US - Europe closed fairly into the green, US then went nose diving south and that may be the main factor that the Asian markets that opened now are deep down in red. Nikkei 1.48% down, Hangseng down 2.69% and Strait Times down 1.69%. This alone will would have ensure that we open red.

The candles however tell a different story altogether. The bollinger band is closing in slowly - showing a reduced volatility. At this rate within this week perhaps the channel will be close enough to signal a breakout - which way the breakout will be - wait and see.

On 2nd jul onwards we had the markets going up steadily - on 10th we had a doji and that put the upmove to a temporary halt. 11th saw a black candle and yesterday a sort of a doji or a spinning top - basically indecision/lack of conviction probably to drop down. What next then? I feel we may have positive breakout anytime now. There are other indications to support this. For one MACD red line continues above blue and it is bullish. RSI is bullish but the Stoch RSI - that is called the indicator of indicators is overbought. This gives a opposite signal. The slow stochastic is below 80 that is considered a overbought zone and would have ordinarily given a sell signal. The redline here is below the blue line reinforcing the sell indication for the time being. The TRIN is bearish but the TRIX is looking up -- remember it is one of the leading indicators and is giving positive indication for the coming days.

Well the meat - we may open red and remain confused for the day. Close - as BJP, Samajwadi party, UPA or someone else - I cannot place my bets any way till 22nd.

Best of Luck to all. Make money - hedge your positions but for GOD sake do not hold naked shorts.


allvoices

Saturday, July 12, 2008

Water water every where ...... but not a drop to drink

Yeah - its true in a sense - there are good stocks lurking in every nook and corner but the one you touch turns dust before you can take the cup to the mouth to savour it. Well I did not have time to check the candles for last two days. When I opened the iCharts today I saw almost a Doji formed on 10th and followed by a good fall on 11th. Infact so much so that I pulled up charts of lot of stocks and many had made Doji on or around 10th. I say so for Nifty, L&T, BHEL etc. The sell out - I believe was a part of the lingering uncertainty for last so many days.

Till the time the political uncertainty is sorted out for good - the problems will remain - and the way the things are the upper targets of 4200 or 4400 etc which were being given are not likely to be met. The reason is simple - everyone was expecting that the 5 EMA will crossover the 200 EMA and we will have the market stabilising and looking up - as of the last days charts - it is not the case - the 5 and 20 EMA lines have dropped down and started their journey downwards again.

But then on the other hand we have MACD that gives us a bullish indicator and RSI too gives us a bullish indication. The MACD Red Line had crossed over the blue line and still remains above it. The RSI was on its way to cross the 50 marker but has looked down last two days. Nevertheless it still remains bullish. The slow stochastic's red line was for past few days above the blueline but on Friday converted on to the blueline -- it may go on to the over bought zone. The TRIX surprisingly is looking up and may crossover 1 marker. What it implies is that it may turn bullish if we close well for a few days. The TRIN on the other hand has been marked as bearish by Jaggu.

So - in a nutshell we can classify that our markets are as confused as the indicators and the indicators are as confused as our politicians. And that is the way I feel we will live for some time to come. The global indicators -- Europe closed way in red, US too closed red and the Asia opening will have a say on how we open. How the markets behave thereafter and how we close will be dictated by how our politicians behave.

I shall be travelling tomorrow and will just get the snippets of the markets on my GPRS phone. In all the probability the markets will play the yo-yo again. The best of luck to all -- especially the traders who can make use of these wild fluctuations.


allvoices

Wednesday, July 9, 2008

Travelling.....

Sorry everybody - I will be travelling so I will not be able to update next two days
Bye and best of luck


allvoices

Tuesday, July 8, 2008

I smell the rat............ Do you?

With the declaration of the withdrawal of support by the CPM - why did the markets not crash any more than what they did? Have we discounted the news? No I do not think so. Going by the logic the fall should have bee much more severe - but the today's 41 points cut is just not enough especially with the TRIN saying otherwise. No I smell the rat - expect the unexpected - live each day as nobody's business.

Any way the good news first - Oil has fell as Jaggu had said and the markets world over are rejoicing. DOW up 1.36%, Nasdaq up 2.28% and S&P500 up 1.71%. Asia has taken the cue and as I write this The Nikkei is up almost 2%. rest are yet to open. The markets closed confused and the major reason that was there was the political concerns. With these concerns out in the sense that govt will surprise and the cat being out of the bag should see our markets soar for some time to come.

MACD red line should cross the blue today and that signals "press buy", SlowStochastic both red and blue lines are above the 50 marker and gave buy as of yesterday. TRIX is no longer facing down. StochRSI above 50 marker again - so expect RSI all indicators are fairly bullish.

Like I had said a few days back too. The Fabonacci Retracements from the high made on 2nd may and the low made on 2nd july - the 38.2% is near the 4400 mark - so be ready for a party. I feel that is the level we should touch inspite of all the troubles we have home and the we see where we go from there.

Enjoy the ride for all that it is worth. Ahh and just by the way Strait times too have opened in Green and is now 1.24% up. Inspite of this if some unexpected political development takes place - keep some shorts in place at higher level to support such news.


allvoices