Have we seen the bottom? Update for 12 Mar 09

Before I start – I had prepared a ride up for Monday but could not upload it as the net was down. And mind you am not talking about a singular connection -- I believe in redundancy, I have broadband at home, broadband in office, a data card and GPRS on my mobile. It has to be something that none of them worked, or I was not destined to write for the day. Leave that aside – what a waste we had because of the two holidays. For the first time I was wishing – Wishing that markets were open or we did not have these holidays. What a day of trade we could have had, seen the reaction in US and in Asia? On an average the indices were up 5%. The rally has continued to some extent but that trust which we could have got on Tuesday or Wednesday is all finished. The Asia had continued the run-up seen in US and the  closing was – Nikkei up 4.55%, Hang Seng up 2.02% and the Straits Times up 1.33%. The Europe had its doubts whether US can sustain this upswing and closed -- FTSE down 0.55%, DAX up 0.72% and CAC up 0.17%. The US did make a fair attempt to hold on to the gains it had made day before but by the mid-session trading - DOW is down 0.35%, NASDAQ is up near 4.72 points - 0.36% and S&P 500 is 0.09% in red. There is still a lot of time to go and the markets can definitely closed better but will they? I will bet on their closing green. The times in which we are living now -- the profit booking comes so naturally, and not too expected after more than 5% jump in indices and I understand that my asking the US to close green is actually asking for too much – but I still feel that US will end in green.

We had many debates on the future of Indian economy in next few months to come and at least on the idiot box everyone was positive that it is just a matter of few months that will be up and running. Though I'm inclined to agree, the short-term indicators do not think so – they point downwards only.

The candle last friday was a white one and could have been taken for a bullish harami – but then we have a black candle on monday. Well since the black candle did not meaningfully break below the black candle of 5th Mar – I will not give it points to be a bear signal. I would rather go with the bullish harami. The ADX on the other hand still give strength to the downswing only. The MACD is too bearish and the RSI is looking down – but very near to be classified as oversold. The Slow Stochastic is oversold – one and secondly the red line is above blue line – that can give us a day or two worth of upswing. The TRIX continues to look down. The 5 EMA is far below the 20 EMA and 20 EMA is far below the 50 EMA so there is no support there.

At the end of it – I feel our upswing will be because of the rally we missed when the world was fully green. Secondly the US may extend its gains somewhat and thirdly we have indicators in oversold territory. So brace up boys and girls – even if it will be for a day.

So – let us lee the pivot levels for tomorrow ;-)

R3 2687
R2 2649
R1 2611
Pivot 2583
S1 2545
S2 2517
S3 2479
Projected High Range 2597 to 2630
Projected Low Range 2612 to 2579
Fib Projected High 2638
Fib Projected Low 2537

Best of luck for tomorrow.