Now What? … Update for 21 Jun 09…

We have had a so called meaningful correction so as to say… But the doubts as always float in the mind as to now what. There are a lot of circumstantial

pulls and pressures that are building up. Firstly this run-up was perhaps not to reach such heights. Then there is this budget, news about the Air India asking the top employees to forego the salary, Paying the rest late, Oil prices and ofcourse the run up that we have seen for last few months now.

 

Infact globally the uptrend seems to have taken a breather and inspite of us being the markets that are out to outperform others – still we have to remain vary. As far as the global cues are concerned – Europe closed in green with FTSE up 1.52%, Dax up 0.04% and CAC up 0.85%. US started the day well but by mid day had given up most of the gains to end flat. Dow was down 0.19% and S&P was up 0.31%. Nasdaq out performed both the exchanges and closed 1.09% in green. Today the markets have opened confused here in Asia too. Nikkie opened flat, went red , climbed green and is now re 0.2% down. Strait Times opened green, turned red and now flat at +0.2%. So they are yet to make up their minds as to where they have to go.

As far as our charts are concerned the markets have turned bearish with the 3 EMA trailing below the 15 EMA. To reverse the trend the markets should close minimum above the 4409 levels and then confirm it with another uptick. We are around the lower end of the Bollinger Band. The volumes were nowhere as good as desired and you can see the FIIs participation in the markets by looking at the data above. ADX is bearish and the down trend seems to be gathering some strength. MACD is bearish and the Slow Stochastic have reached the bottom of the limits with both %K and %D lines in oversold territory. RSI is at 51, crossing from below – but then this may turn out to be an aberration and may continue its journey downward with an odd stop. TRIX is looking down and that is it.

So all in all like I said – unless the charts reverse the downtick will continue and one odd market up tick as of now should be taken as an opportunity to get out of the stock positions to buy lower. Let us see the supports and resistance levels now…

R3 4446 against 4702 yesterday
R2 4401
R1 4357
Pivot 4281 against 4401 yesterday
S1 4237
S2 4161
S3 4117 against 4101 yesterday
Projected High Range 4319 to 4379
Projected Low Range 4272 to 4212
Fib Projected High 4358
Fib Projected Low 4173

The Options data is as you see – look at the call build up – there is no way we are going up with this call put ratio. I will do a write up tomorrow on how Put Call ratio dictate the markets.

Best of luck to everyone today – another interesting day in the markets.