A hammer.............. well almost

Yesterday we had white candle -- it was somewhat expected. The way we had fell for last few days at short relief was in place. Ideally to signal a trend reversal we should have had the Hammer yesterday, unfortunately it is not to be so. I will explain -- for it to be a typical hammer the lower wick should at least be twice the size of the main body. The body made yesterday was 63 points and the lower was of hundred and three points, meaning the wick was short by 13 points. secondly with such candle indications generally one waits for one more indication before confirming the trend. So we will wait and watch what happens today.

Notwithstanding that the above I had expected bounced back yesterday on the account of the approaching Thursday and the RSI and slow stochastic were in oversold conditions. Well today, a few things have changed. Firstly, in Slow Stochastics red line has crossed over the blue line and that is good. secondly, the white candle has been made with a shade more volumes than last few days in nifty. thirdly, RSI that had gone into the oversold territory, that is below 30 marker is now above 30 and if it continues towards the middle marker it would be good. Top it with Jaggu's TRIN saying it is bullish.

Other than these the indications are still the same. TRIX is facing down still, MACD fast line continues to be below the slow line. Finally the white candle is still hugging the lower Bollinger band.

Well all this is good but what do we expect today? The recovery to continue until at least we see the rollovers. The tons and tons and tons of shorts the system and they need to be squared up. If they get rolled over as shorts than God help us otherwise the rally may last a few days. As for the global indications Europe closed green, US too was green and as always Asia is confused. Confused? maybe but as long as it remains in green the opening is likely to be good and we may continue to be green for the day.

Best of luck everybody.