So much for positive vibes I was seeing yesterday in the charts. Now I realize what makes Fooled by Randomness (Nassim Taleb) a best seller or for that matter his other book Black Swan! What a day frankly speaking I did expect Inflation a tad lower than 10, thought that the Force will try to keep em under wraps for time being. But we finally or rather this time officially crossed the double figure mark. This gave an excuse for a larger sell off across the board (my darling ONGC bucked the trend!). I guess the traders just don’t want to take anything home on weekends and as for the investors, they feel things might be cheaper in the near future. On the 5 minute chart shown above there isn’t much to understand other than that we just headed south and just like always the 20 period SMA provided resistance to the pullbacks. Though the MACD lines and the histogram traced a bullish divergence but the final conformation was lacking from the Price itself (confirmed signal would be breaking of the trend line and the falling SMA!).
Now taking a look at the daily chart below we have found support at the trend line. I have always seen Technical Analysis as a relative subject. There is a saying in English “Beauty Lies In the Eye Of The Beholder” same way I think every single pattern we infer on the charts is also as good as the person who sees it! For me I see a double bottom marked B1 and B2. I also see a T formation which projects the time cycle where AX=XB. The MACD lines and the Histogram still have not given a signal contrary to what it was yesterday. The fall today was more news based than on technical ground. I assume the pullback would be equally vicious too. On the personal front I avoided the index trade today but did pick up RIL and ONGC. I might wrong in my analysis or I might be right, but at least I have the gratification that I tried.
In fact I once again end this post with a quote I had put in yesterday because I feel it is more apt today considering today’s action and doubts it would have created on many a traders mind!
"A ship in harbor is safe - but that is not what ships are for."
John Shedd
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