Doubtful Crossroads…..

With the market showing weakness inspite of all the expectations from all quarters - either it is fooling us big time or we are taking it wrong. Why should we fall - there is no reason really - agreed that there is perhaps no reason to go up - but then why should we go down? In any case it is a well known fact that the markets are difficult to predict and more so in times like these where there is extreme fear - or perhaps I can put it across that there is lack of extreme greed - people are stacking away small victories for the uncertain future. Weak global cues saw the Sensex open with a marginal negative gap of 106 points at 9,822 and moved up to a high of 9,838 in morning deals. Selling intensified in noon deals on weak Asian closing, and the index dropped to a low of 9,644 - an intra-day swing of over 190 points. The Sensex finally closed with a loss of 242 points (2.43%) at 9,687. All the sectoral indices closed with losses. The BSE Realty index was down nearly 5%. Market breadth was extremely bearish - out of over 2,555 scrips traded, over 1,745 declined. Satyam dropped over 13% to Rs 140. Jaiprakash declined over 10% to Rs 78. Tata Motors slipped over 7% to Rs 175.

Nikkei was closed today - not that a very bright and sunny day was expected from their part of the country. Hang Seng was down 2.75% and Strait Times too lost a good 1.21%. Was there any chance of going green - not that I can find any reason - the markets infact opened green - trailed along the neutral line but on the negative side and then dipped down greater red before closing. Europe was in the twilight zone - neither here nor there. FTSE was green like rest of Europe for the entire time but dipped very aggressively down barely closing with its head above the water at 0.16% in green. Same story was repeated by DAX and CAC - but unfortunately they could not keep their head above the water and ended 0.21% down (DAX) and 0.73% down (CAC). Frankly I would have called it a flat closing had it not been the sudden and extremely steep fall towards the end of the session for all the indexes. US was not the bad influence - it had infact started out green but towards the mid session all the indexes are down red - Dow down 0.55%, Nasdaq down 0.70% and S&P down 0.59%. The session end is still some time away so the market can frankly swing either side.

With all this doubts floating around it is difficult to take a positive call so instead of taking a call I will just present facts and wait for the markets to what they intend to do – confuse us. On dec 19 – candles made a doji – well it was not really a perfect one but that was the day when the candles left the upper end of the Bollinger Band. The drop then continued for the next two days – building a bit of momentum – growing bigger every passing day. The only saving grace that I see is that the candles closing is still not below the opening of 18th Dec. There was a serious attempt for the candles to cross above 50 EMA. A cross over would have perhaps done wonders but that is not to be and the 5 EMA line is still above 20 EMA so that is all that is left. The volumes were less to say the least – so may be – just may be if the volumes pick up we may go green like hell. MACD red line is still above the green but divergence has certainly reduced. RSI is bearish and looks down. Slow Stochastic is giving a certain sell – having crossed over below 80 line. TRIX still looks up but showing doubts – perhaps a little bit at the moment but doubt nevertheless.

Pivot data…
R3 3123 against 3193 on yesterday
R2 3071
R1 3019
Pivot 2988 against 3058 on yesterday
S1 2936
S2 2905
S3 2853 against 2924 on yesterday
Projected High Range 3004 to 3045
Projected Low Range 3034 to 2993
Fib Projected High 3062
Fib Projected Low 2934

It is the last day to square up tomorrow – so let us see where we go – frankly there should be some lower side before we go up.

 

 

 

This is how the markets traded on 23rd on pivots. It opened below the Support 1 and then never looked up. See it showed signs of recovery at support 2 but breached it during its second attempt.

I will try to include this chart whenever possible.