Thursday, May 28, 2009
Wednesday, May 27, 2009
Tuesday, May 26, 2009
Monday, May 25, 2009
I am on vacation and will not be able to update the site and blog from 25th May to 31st May.
Sorry for the inconvenience.
Sorry for the inconvenience.
Friday, May 22, 2009
The tug of war is continuing. Yesterday again there was activitiy around 4300 levels, but bears took charge in the end and were able to bring NIFTY to test 4200 levels.
The volumes have reduced significantly and even market participants are waiting for a move either side before they can take a position.
The dust doesnt seem to settle down so fast and next week being the expiry week, we can see some more erratic action kicking in.
There is also a clear possibility of a sudden move on the upside to trap the late bears of this week and so no position is the best position now.
Thursday, May 21, 2009
For the past two sessions, NIFTY is shrinking and is beginning to move in a tight range.
This doesnt give a chance to both bulls and bears and both are still hoping that there will be another breakout in their favour soon.
How soon will that happen?
This is quite difficult to answer and till the time any of the levels of 4500 or 4200 is breached, forming a view going forward also becomes difficult.
Yesterday 4300 was established as a good support the whole of morning session and suddenly in the afternoon 4300 became a strong resistance. So there might still be some action left here and there around 4300 levels before NIFTY takes one direction.
Wednesday, May 20, 2009
Yesterday was the first sane trading day after the circuit day. Lot of short covering seen initially as well as profit booking from longs and markets settled at the previous session close.
There was heightened volume seen. The doji certainly signifies indecision and market can move either side.
It is facing resistance at 4500 levels and support is seen at 4200 levels. A break below the day's low and a retest of 4000 levels is certainly on the cards in a couple of days, but will it break the high and scale new peak is what needs to be watched now.
It is certainly unsafe zone to enter either side now and it is better to sit and watch for some more time. The dust has certainly not yet settled.
Tuesday, May 19, 2009
This could be the most simplest of all intraday charts with just a few lines.
Is this rise and upper circuit that we have seen healthy?
The issue is that yesterday's combined volume was just around 3000 crores and it is quite clear almost no new player participated in the rally yesterday. The feeling of missing the bus and the euphoria and hype created by the media is just pushing everyone to somehow get into this rally by all means. Those who missed getting in yesterday are more than willing to do so today, but the question is 'are they realizing that they are buying it at 20 to 25% higher levels than what is seen on friday?'
The only thing that can sustain this for a day or two is the short covering, either voluntary or forced which has not yet happened yesterday. Once all these shorts are covered, NIFTY will be at a height from where even rising an inch above would be a herculean task and again will collapse on its own weight. Retails who enter it at higher levels will be again caught on the wrong foot and might have to wait for months to again see those levels. Chasing the markets is always dangerous and as told yesterday it certainly is a 'wait and watch' situation allowing the dust to settle before initiating the next move.
Monday, May 18, 2009
The election mandate is expected to throw out the bears completely out of the markets today. At the time of writing SGX NIFTY is already at 4095 and our markets likely to open with a 10% higher upper circuit.
It finally turned out to be a 'black swan' for the bears contrary to the expectation, but then a 'black swan' for bulls also not ruled out in the very short term as bears are getting totally wiped out and there will be only raging bulls at one point which needs to be tamed then.
The pattern made on friday, also looks bullish with a clear bear trap at 3650 levels in the late afternoon. Overall on friday we saw a gap up which was sustained throughout the session. Being bearish, these signals were ignored completely.
After today's opening, it becomes extremely difficult to take position either side. It is similar to the situation where markets were at october lows. 'wait and watch' as of now.
Friday, May 15, 2009
Though NIFTY corrected about 1.15% yesterday, the expected crash of 5% or more did not happen. Today is the last day of trading without knowing the election outcomes and so there are chances of some FIIs pulling the plug, letting the markets correct significantly.
This has been the expectation throughtout this week. Though NIFTY could not move past the range high of 3720, nor was it able to convincingly break the lower band of 3550. It has been just see-sawing and it has been a tug-of-war of bulls and bears having equal strength. so it 'wait and watch' for one more day with the bearish outlook.
Thursday, May 14, 2009
We have been discussing about a crash of 5% or more in a single day this week and there were many views that the crash is more likely to happen before the election results are out.
It looks like today is the day and coincidentally all other asian markets are also supporting that.
Now what was the confirmation yesterday. The near vertical fall from 3700 levels to 3630 levels happened before we could blink our eyes and then it didnt delibelately crash further. So all the longs at 3700 were all struck by panic and very few would have the guts to take the loss at markets and come out.
This concludes that there are so many longs trapped and yesterday's move just made the last of the bear turn into a bull as 3700 level is retested every two days.
Now it is all set to move further down to 3585, 3535 and break even that and move to much lower levels of 3480, 3444.
Wednesday, May 13, 2009
Yesterday's move almost took everyone by surprise. The move beyond 3630 to almost test 3700 levels, made bears run for cover helplessly.
If the move is looked at in simple terms, as we were discussing, it tested the crucial level of 3565, took support and again moved to test the range high.
Now that the market has again moved to test the range high, the higher it goes, the severe the fall will be. This has been the expectation and view for quite some time, but then when will that happen is the tough question to answer.
I still anticapte that the money that came in last week/month will be pulled much before election results are out and not after. So if at all a major correction has to happen, it is highly likely that we see that in these three remaining sessions. Any break below 3618 at this stage is going to see much lower levels.
There is a possibility of testing 3730 levels and the max that this can rally is only till 3780. With a stop of 3795, a short entered at higher levels is going to be much more rewarding.
Tuesday, May 12, 2009
It looks like end of the day bears are slowly beginning to take upperhand. The correction of 3.5% almost split across two sessions doesnt seem to be a big blow, but is certainly slow poison for the bulls and it will take sometime for bulls to realize that.
By that time bears will be placed comforatably and will then go for the big blow of 5% or more down move in a single day that is anticipated to happen sometime early this week.
Yesterday's pattern looks completely bearish with powerful bull traps seen at 3620 levels. This indicates that this market might have lost all its steam to move up and even an upmove till 3630 level is a remote possibility.
3595 is also established as a good resistance area. Also the much awaited 3565 level was breached yesterday and the close was also below that.
All this points to accumulating shorts at higher levels of 3585, 3600 and if at all this market reaches 3630.
A break of 3520 would signify the start of the downtrend and will take NIFTY to 3485, 3424 and 3365 levels.
Monday, May 11, 2009
It was a complete bearish 'change of guard' pattern seen in the last session after testing the previous high with the bear engulfing.
With all this and the way NIFTY is being held higher without even testing the crucial point of 3565 the whole of last week, indicate that the correction we might see will be quite heavy this week and might happen even in the earlier part of the week.
Till now we have seen intraday bears rejoicing, so also the end of the day bulls. This is likely to turn in favour of end of day bears.
Friday, May 8, 2009
NIFTY's upmove in the last session came with very low volumes than that seen a day before. Given the fact that NIFTY could not retest the 3717 levels and also the rise is with low volumes brings suspicion as to this move being totally to trap the last of the last bulls and that too yesterday's close being the highest in the series.
The way market is being held at higher levels with low volumes point to the fact that it has to crash due to its own weight and that the due is very near.
All this points to the fact that this bull rally that we saw in the short term is nearing its peak and as mentioned in the previous post it is sell on every rise with 3795 being the stop.
Thursday, May 7, 2009
It was a perfect trap for the late bulls in the last session and the three day pattern on charts indicate a mild reversal pattern.
Had it broken the 3567 barrier and closed below that, it would have confirmed the reversal for the short term.
The markets were unable to move at all an inch higher at day's high yesterday and it looked like it was not able to hold on to the weight and crumbled. It was giving clear indications to press the 'Sell' button then and it seems like this entire up move is to trap the late bulls. The volumes were significantly higher than the past 10 days that we have seen.
Does this signify that the bull run we have seen is getting over and we are near the intermediate peak?
It looks so and from now on, it will be short on every rise with a stop of 3795 and any break of 3567, 3517 levels would aggravate the selling and would push the markets further to test 3424 levels.
Wednesday, May 6, 2009
NIFTY in the last session moved erratically up and down before settling almost at the previous close. This has formed a perfect doji after the long white candle session.
The main point is that NIFTY has not retraced to test even the middle of the white candle which is at 3567 and is still making new highs.
A small push can take NIFTY further to 3708 and 3780 levels which was written for the last session.
The resistance and support levels remain the same.
Tuesday, May 5, 2009
It was a remarkable day in the history of markets yesterday. Bulls were extremely ferocious and also there were allround participation. They were able to conquer all the near term resistance level with ease and that too in the opening itself and bears did not have a chace to even run for cover.
Given the strong positioning of bulls, again the question of "why would one leave the strong hold so soon and let bears win too soon comes to the mind again".
The 3 day volumes have seen an increase, but still less than what it was when 3500 levels were taken by bulls 10 days back.
Though this run up has defied the gravity, it looks like this still has steam to push to the levels of 3708, 3780 levels. Beyond 3790 levels, it outlook will turn cautious and I would rather be looking for a reversal confirmation than continuing to be a bull.
The resistance levels are 3708, 3780 and support levels are 3630, 3595
Monday, May 4, 2009
It was a remarkable expiry day in the month of April where there was an almost complete bull engulfing pattern. From the peak of the series, if we simply look at the close, it shows bulls are still strong and only that they did not push NIFTY higher for the expiry.
Another series has begun and assuming that the move on the expiry day and taking into account the prior move to test the previous high made for the series, NIFTY could very well see higher levels before correcting further in 'May'.
The general view technically, fundamentally, politically and even if we add historically it all points to direct bearishness. But as written in the previous post will that happen too soon?
That is were again I am extremely cautious. NIFTY might see much higher levels before correcting further.
There is still very low participation when we look at the volumes. But how long retail can stay in the sidelines if NIFTY is zooming. This is something which cannot be resisted and there has to be an hysteric participation before this market can correct. This has not yet happened and I was expecting to happen anytime in the last week of April.
The key resistance levels are 3520, 3580 and 3630 and the support levels are 3447, 3420, 3403