One step at a time….

One small step at a time the market recovery was being built up and suddenly it goes up in smoke – poof… and why? One corporate house of the country that did the vanishing trick with the name they built – Satyam. So much has been said about them that I will try not to mention any more. Our markets were not doing bad – we were building the house brick by brick – as put across by IndiaBulls in their monthly report. The stimulus package here and the actions by the US govt there alongwith the rest of the world was being slowly digested by the world and there was a recovery here – volatility – and recovery there – basically we were climbing up one small step at  a time. And then came the Indian home brewed story of mega corruption and we all fall down. We have basically have had two days of the fall – two big black candles to speak of. Frankly there are now indications that we have had enough of fall already. The second candle made on the Nifty and so many other important stocks is of a hammer. Technically many may brush aside such a formation as it came after a doji and a black candle – such a signal to be meaningful should have come after a trend – downtrend to be precise – but I could not help and observe – the markets did try to recover on friday. Was that my imagination or there was something else to it. Perhaps the traders did not want to carry their positions of profit over the weekend – or perhaps there is a feeling that the news driving the markets did not deserve the kind of attention it really got – they are debatable and I am not going into a debate at all. But I do feel that the shorters’ can get trapped if they are not careful as there is a chance that the markets will bounce back for whatever it is worth.

We are expecting our GDP to settle around 7% – give or take some. the IIP data is bad and exports are likely to remain bad for some months to come. The next sectors to hit might be the service sector – because of the reduced consumer spending. But all is not bad – the inflation is on its way to touch 3-4% by march and that by itself is no small feat. The crude that had a spike recently was more due to the middle east tensions and Russia cutting off gas in Europe. It will get resolved and the prices should stabilise. The banks will finally come on to the rate cuts – that they have been resisting so far and have offered half hearted cuts only. There should be another fuel price cut and that should make the things easier soon. The soft monetary policy pursued by RBI will continue and we may have some more stimulus package even though denied at the moment by the govt. The FII money inflow should remain positive in the coming months. All in all – I strongly believe that the last two black candles were an aberration and the up swing should continue – albeit at a more careful pace perhaps.

If that be so I still do not feel that everyone will do well…

Real Estate – no go – the worst is yet to come. The valuations are not related to the ground realities. The markets have not crashed but I am sure that big names should be in trouble in times to come.

IT – should survive – but will be under pressure. The rupee as I see it will definitely strengthen, and the pricing will be more competitive… growth will be hit. Infosys results are around the corner and they are likely to beat expectations as the rupee has been weak – and then the ball will roll down.

Banking – Will do better than expected. Indian banking – especially the govt owned banks are the place to be.

Auto – less said the better at the moment.

Gas – don’t miss the bus – if you have believe me this is the place to be. blindly trust me and park a percentage of your money here. There may not be any great positive news in near future – but neither will be any negative news and the demand is going to grow exponentially.

FMCG is also likely to do good in near future.

I have left out some sectors – will talk about them some other time. Now what you read on top was what I felt – but the candles tell a different story altogether and I have been pondering hard. The story they tell is bad and bad – Firstly the Bollinger bands have expanded, 5 EMA has almost dropped below the 20 EMA, the candles have come to the lower band from trailing the upper band in a jiffy. The volumes accompanying were quite high. MACD has had a bearish crossover and says – sell. RSI is bearish, Slow Stochastic is bearish. Reading the ADX is an art so do not blame me if I get it wrong – I feel the down trend is loosing steam – Jaggu says that it is bearish – take your pick. TRIN as said by Jaggu is bearish – you can and should visit his blog to get an idea. TRIX has started looking down again. We have some lower targets now.

 

Time to see the magic of the Pivots – the markets did not see the pivot levels on Friday. They went down to the Fib lower expected band and definitely recovered but nowhere where we would have wanted it to be.Any ways – it could have been worse – seen the S2 and S3 levels as per – had the S1 broken – but then that’s the magic of Fibonacci.

 

 

R3 3048 against 3406 on Friday
R2 2989
R1 2931
Pivot 2870 against 2985 on Friday
S1 2812
S2 2751
S3 2693 against 2564 on Friday
Projected High Range 2901 to 2960
Projected Low Range 2897 to 2838
Fib Projected High 2961
Fib Projected Low 2777

 

Best of luck everyone… Hope you make money

LiveJournal Tags: stock markets,NSE India,Candle Sticks

Satyam….

Governance or mis-governance – take it which ever way you want but the repercussions will be felt for a long time to come. The family run companies will come under a scanner but frankly I take it the other way. We the Indians require a kick to wake up to such facts and this would turn up a great opportunity to kick some a** and clean up the house. And what better time when there is not even an iota of a chance that such incident can be brushed under a carpet. The action should come from all quarters including some sort of policing by the govt. I am a firm believer that give private enterprise a free hand and they will put up their mothers for sale. That our economy is not totally open and govt enterprise itself a competitor of sorts to the industry – keeps our house in somewhat order when all the economies like US also tumble. Okay it is not the only thing – but it has a hand in our PM still sticking that we can grow at 7% – believe it – we are doomed only virtually – in real terms we still hold on to our place under the sun.

Yes – Satyam was our reason for the markets to be junked – but that was not the only reason – perhaps it was decided that the ‘Indian markets’ should be taught a lesson by FIIs, FII's were net sellers for a huge 1111 Cr and DII's too sold 505 Cr. The technicals too supported some sort of correction, maybe the global cues did their bit and we dropped – the drop ofcourse was like a flying bird dropping sh*t on someone’s head. See the reason why they say the overexposure in any one sector or company is not good for your financial health? now imagine the mutual fund houses who held satyam – at 4% of the fund allocations. And to think of it that I too bought 50 of them. They are in the drain as far as I am concerned. Do not get motivated by seeing it rising, as technically they are oversold and there may be a small relief rally. If there is no bid for acquisitions then it is very likely that it is going the TeleData way – all the way down to 7 Rs. We had a holiday yesterday and the Global cues have not been encouraging in the meantime. It is only yesterday the the markets are trying to show signs of stabilising abroad also. Europe was down FTSE at 0.05% down, DAX 1.17% down and CAC 0.65% down. US has shown some hopes with the Nasdaq up 1.12% and S&P up 0.34%. Only down was marginally down at 0.31%. Asia is trading confused with Nikkei in red by a percent, Hang Seng in green by about .38% and Strait TImes in green by 0.64%. Among the BRIC Brazil closed 2,87% in green.

Technically the down trend started has the ability to do a lot of damage and could take us to much lower levels than those seen recently. The candle as you can see on the left is black and large. It almost covers the entire width of the Bollinger Bands. the bands that were narrowing showing low volatility may just start to expand today onwards and the uncertainty always introduces greater volatility. Look at the volumes – 191% of the recent times – almost double in other terms. The ADX looks down but the downtrend looks weak. The Slow Stochastic red line is below the Black and that is bad – bearish in other terms. MACD divergence is still in positive – though barely so. All the same so far so good. TRIX stays neutral and Jaggu says that the TRIN is negative. The RSI has fallen sharply down from around 60 to 47 but still bullish. Frankly take the technicals with a pinch of salt – the news driven markets like that started yesterday – does not go truely by the technicals. however a positive opening is almost certain because of two reasons – one we are oversold and two because the drop yesterday was sentiment driven due to a single event. But in the medium term now – a lot of companies will be re-evaluated and we have have opened the doors for lower targets. I guess the conspiracy is against me – not to touch the levels of 3200-3500 before heading down (LOL).

 

See the markets of day before? The markets could have got support around the pivot levels had it not been for the Satyam and at the most around the S1 levels – but the news and selling took it to the otherwise unimaginable levels of breaking even the S3 – I really did not calculate the S4 levels but that itself is the extreme. Hope that the levels today will be more saner than those seen day before.

R3 3406 against 3226 yesterday
R2 3244
R1 3082
Pivot 2985 against 3103 yesterday
S1 2823
S2 2726
S3 2564 against 2980 yesterday
Projected High Range 3033 to 3163
Projected Low Range 3131 to 3001
Fib Projected High 3217
Fib Projected Low 2817

Best of luck – i believe everyone needs it badly today.

The day gone by….

So the markets are behaving like our neighbour – they are in the denial mode. no amount of bad news now is a problem for them. like some time ago when no amount of good news was good. Nothing has changed – except the market behaviour. It is very difficult to say whether we have bottomed out. I am sure that we will point our nose down only when you me and everyone else will be convinced that the markets are on their way upwards for good. At the moment I am happy and will remain so. I would however be a bit cautious as this is the second day that a doji has formed and it is not easy for the markets to ignore such and indication one after another. Like everyone says – better take precautions than to undergo the cure. And I am sure inspite of my cautious approach – the markets will decide and do whatever they feel right.

If the global indications are anything to go by – then we underperformed Europe and US yesterday. In asia Hang Seng and Strait Times has opened flat and went on to close red – Hang Seng down 0.35% and Strait Times down 0.58%. Nikkei on the other hand had opened green and managed to end green – up 0.42%. Europe had opened flat and then went on to close green – off the highest levels but green nonetheless. FTSE was up 1.29%, DAX up 0.85% and CAC up 1.08%. The news of job cut and recession continues to pour in from everywhere but US – after a lot of ups and downs decided to close green – DOW up 0.69%, Nasdaq up 1.5% and S&P up 0.78%. Taking these positive cues Asia has opened green across the board – Nikkei presently up 2.42%, Hang Seng up 1.61% and Strait Times up 2.18%. Talking purely from the global cues – a positive opening is on the cards – but I really have my doubts whether we will sustain it towards the end.

I have already mentioned that the candles show a Doji and that is a strong reason for expecting some sort of sell off today.The bollinger bands have narrowed further and the candles so far are trailing the upper edge of the bands only. Volumes have increased and MACD divergence trails in positive. RSI is good and bullish and for a change the TRIX again looks up. The ADX is showing gathering strength in the uptrend but the +DI itself is looking down. On the Slow Stochastic the red line has crossed below the black line and both are in overbought zone – another tinkling of advice that the markets are over bought.

Pivot data… The pivot is at the same place and the R3 and S3 have expanded by a bare 10 odd points range.

R3 3226 against 3207 yesterday
R2 3188
R1 3150
Pivot 3103 against 3103 yesterday
S1 3065
S2 3018
S3 2980 against 2999 yesterday
Projected High Range 3126 to 3169
Projected Low Range 3113 to 3070
Fib Projected High 3164
Fib Projected Low 3032

 

The markets have traded in a narrow band yesterday as shown below.

Please do expect some sell off today. Best of Luck to everyone.

 

LiveJournal Tags: Stock Markets,Candle Sticks,NSE India

Have a laugh….

1. The  US has made a new weapon that destroys people but keeps the building standing,. Its called the stock market 
2. Do you have any idea how cheap stocks are ?? Wall Street is now being called Wal Mart Street 
3. The difference between a pigeon and a  London investment banker . The pigeon can still make a deposit on a BMW
4. What's the difference between a guy who lost everything in  Las Vegas and an investment banker ?  A tie
5. The problem with investment bank balance sheet is that on the left side nothing's right and on the right side nothing's left.
6. I want to warn people from Nigeria who might be watching our show, if you get any e mails from  Washington asking for money, it's a scam. Don't fall for it
7. Bush was asked about the credit crunch. He said it was his favourite candy bar
8. The rescue bill was about 450 pages. President Bush's copy is even thicker. They had to include pictures 
9. President Bush's response was to meet some small business owners in San Antonio last week. The small business owners are General Motors, General Electric and Century 21.
10. What worries me most about the credit crunch, is that if one of my cheques is returned stamped 'insufficient   funds'.  I  won't know whether that refers to mine or the bank's.

Courtesy - Jay Leno (I do not know him personally ;-))

Hey – Today’s writeup is there in the post before – do not mistake this for the day’s thought.

Caution ahead? I really do not think so… but give it time..

I am reading a book named ‘How to make money trading with charts’ by Ashwani Gujral. He starts off by saying that generally in our markets the Amateurs do trading when the markets open, the bulls and bears fight it out during the afternoon and the professionals take positions during the trade ending hour or so. For the first time I said I will brace myself and hold till the last hour – the markets went up so sharply during that period I was just chicken sh*t out of thinking of taking any position. Almost the entire day the markets were range bound in 40 odd points of trading(Nifty) and then it decided to shoot skywards – I am sure that not many saw it coming though I was pretty sure of some gains – but this much – frankly I had not expected. Any ways as long as it ended positive – I guess not too many would be complaining. We have had a fair upswing in last few days and a breather is required – no? Atleast that is what US has done really.

On the global front the Asia was rocking really. Europe started out with a positive bias – kept declining during the session and then ended green – not much – but green. FTSE was up 0.39%, DAX up 0.22% and CAC up by 0.31%. It was US that showed trouble. Opened red – wanted to go green but could not – and finally ended red. Dow ended 0.91% down Nasdaq down 0.26% and S&P down 0.47%. Asia opening now is showing a mind of its own. Nikkei is trading now (0800hrs) at 1.12% green, hang Seng down in red 0.37% and Strait Times flat at 0.14% green.

Coming to the candles – we have had a sort of event yesterday that will carry us on for some time to come. 20 EMA line has almost crossed above the 50 EMA line – so I am now sure that this uptrend will basically continue in one way or the other. The Bollinger bands are as narrow – so do not take it as a breakout – just take it as a slow and steady uptrend. Volumes were fairly good. The candles too are trailing along the upper edge of the Bollinger Bands. MACD  divergence is healthy again. RSI is good and the ADX shows that the upswing is gathering strength. (gathering strength but is still weak) Slow stochastic shows that we are in overbought zone and that is alone ringing bells of cautions in the indicators that I study. TRIX my leading indicator is saying that upswing is still good though it is at one of its highest levels. – but as long as it stays there with the trend showing up.

Is it a time to buy? well it has been a time to buy since a long time but now – though I still feel the upswing of another couple of hundred points is perhaps still on the cards. The Fibonacci Retracements shows us that a little above 3200 on nifty is a reality.

Pivot data… R3 is showing us the 3200 levels… Ha!

R3 3207 against 3137 yesterday
R2 3178
R1 3150
Pivot 3103 against 3049 yesterday
S1 3074
S2 3027
S3 2999 against 2961 yesterday
Projected High Range 3126 to 3164
Projected Low Range 3099 to 3061
Fib Projected High 3152
Fib Projected Low 3035

See the markets were trading around the R1 the entire day till the time they decided to break the trend and moved sharply and swiftly above the R2 finally ending all the way up in the middle

of R2 and R3. R3 was up at 3137. With the pivot today at 3103 (near yesterday’s R2) It will be extremely interesting where we go to today.

Best of luck to everyone for today’s trading.

LiveJournal Tags: stock markets,NSE India,Candle Sticks

A real uptrend?… For the time-being Yes…

Okay – I have had a good amount of holidays – a wonderful New-Year’s eve and I think it is time that I come back to the real world of bulls and bears before I start acquiring a house in fairyland. The past few days have been wonderful.

The second stimulus package has come and it has been in some ways better than that was expected by the markets really and it is for this reason I see a wonderful opening on Monday. This is as far as the fundamental story is concerned. On the technical side the markets are in overbought zone so the sell off that would come should be severe. I do not have the patience to see or trade the DOW but take a look at Jaggu’s blog. He says the DOW is in for a big time trouble. – dangerous waters –Uh! ? It becomes a fighting times when we have such a situation with the battleground ready for a intense fight. The story of bulls and bears and the breakouts form the tightly traded range we saw for past so many weeks ~ Well let me take the things one at a time and see where we are heading to really. Okay starting with the second set of stimulus that has been announced. To start with as far as the economy goes it is difficult to match the doings of Congress Govt here. See whatever they do within the context of Political pressures – Communists then and elections now. We cannot expect any action in isolations for the economy alone – afterall we have the compulsions of the democracy. Mr Montek Singh Ahluwalia expects these actions to propel the economy forward at 7 percent – that would be a WOW! Firstly the benchmark repo rate has been cut from 6.5 to 5.5% – a full 100 basis point cut. Reverse repurchase rate has been cut from 5 to 4 percent – this is likely to boost the banks to lend more to the consumers. The focus of the second stimulus package is clearly the infrastrucuture sector but the measures also included easier financing for commercial vehicles, allowing state governments to borrow more for spending and simplified lending norms for exporters. The government allowed infrastructure firm IIFCL to raise Rs 30,000 crore as tax free bonds and removed the interest rate ceiling on overseas borrowings. It announced accelerated depreciation at 50% for commercial vehicles bought between now and March 31. FIIs have been allowed to invest up to $15 billion in corporate bonds as against $6 billion so far. The government has also restored duty drawbacks to exporters and easier lending through the EXIM Bank. The government was candid enough to admit this was the last of measures as it had little fiscal headroom. So what all should affect the markets tomorrow as far as the fundamentals are concerned? – Well Firstly, The stimulus packet is good, positive for the market. But this is the last of the packet – so this is it for the time being – if the markets do not take it in good stead then – well that is that then. Finally the expectations are now finished with the announcement of the final package – so no more anxiety and unknown factor to drive the markets up anymore – will affect it negatively.

The Global cues are good. Asia was all green on 2nd Jan with Nikkei up 1.28%, Hang Seng up 4.55% and Strait Times up 2.17%. Europe too was good with FTSE up 2.88%, DAX up 3.39% and CAC up 4.09%. US too ended on the green note with the DOW closing 2.94% up, Nasdaq up 3.5% and S&P up 3.16%. So I do expect a good opening of Asia tomorrow and also ours.

Let us go on to the technicals now - well the markets touched the middle of the Bollinger bands and bounced back – I had infact thought that they will go and touch the bottom of the bands – glad to be wrong. The bands themselves are fairly narrow so – till the breakout happens just wait and watch. 20 EMA line is inching and itching to cross the 50 EMA line – the real bullish season will start after this crossover. The volumes came back to the averages. The volume on the friday trading was 139% of previous averages. The candle in isolation is a doji and if it is what it says then short term correction is almost imminent. Second way to look at the candle is that it is a shooting star and that too is not a good indication. RSI  remains good and positive. Slow Stochastics show the makets in the overbought territory so tells us to be cautious – TRIX is at its peak – depends how long it remains there and whether the 3200 to 3500 band is reached. ADX is just above the 20 marker saying that the overall uptrend that was there has run into trouble and this trend is weak. Though the +DI says it is positive about the markets. MACD divergence is still positive – but just so. So here we are still at crossroads wherein the markets can open positive and at the most remain in green territory for only near future.

Pivot data… Notice the pivot at the same place as before.
R3 3137
R2 3107
R1 3077
Pivot 3049
S1 3019
S2 2991
S3 2961
Projected High Range 3063 to 3092
Projected Low Range 3067 to 3038
Fib Projected High 3095
Fib Projected Low 3006

Before I end I wanted to post this trading day of 2nd.  I have doubt if I have my data accurate but according to what I have the entire trading was around the R1 levels with R2 way above at 3087 and Pivot way below at 3011. Since I was not trading I cannot really vouch for the accuracy of the data ;-) Sorry.

Okay I almost forgot – I started my search to look around for some technical analysis software and I cam across a lot of suggestions to include MetaStocks, AmbiBroker and all – I also stumbled upon InvestarIndia that is a software fairly recently launched. It has a lot of scope in helping you to do fundamental/technical analysis. Ofcourse it costs money but I really feel that if you are seriously into stocks and technicals then it is worth a look. I am posting a link for those interested to see it. http://www.investarindia.com/

LiveJournal Tags: NSE India,Candle Sticks,Stock markets