End Game Or Check Mate??? Nifty Recap For The Day!

Capitulation! A new word in the lexicon, of newbie’s. Market they say is going crazy, depressing….. Kaput. None of this is true about the market. Market is what it is; it’s just the participants who have gone crazy, depressive and kaput! The search for the bottom is frustrating. For the experienced it’s a matter of patience and for people like me (greenhorn analysts, newbie’s), the search is more akin to the new exploit of Indiana Jones. Maybe we should call it Indiana Jones and the Hunt for the Bottomless Pit. Ironically all the divergences (indicators and oscillators) seem to be failing and all the convergences (crude, inflation, global markets, politics) seem to be working! Maybe we should stop looking for divergences and wait for positive convergences to sail us through. Nifty continued from where it left on Friday. A new low, few more brave bulls sacrificed at the altar. Old bears happy with their hunt, new baby bears born out of this fall, bidding for their moment of glory. The 5 minute chart above shows a steady decline, with every pullback a new shorting opportunity. Daily chart (below) is getting to be more of a challenge. We have made a new low, broke the last barrier 4050. Below that, the red channel suggests a more ominous target of 3750/3800. The only positive signs to provide some solace; MACD histogram still showing positive divergence, the time cycle completes today, and we seemed to have formed a bigger double bottom when taking August 2007 lows into the picture.

The flip side is that barring the global cues we are afflicted with a very fragile political situation which does not augur well for the market. In these circumstances even the best of technical signals fail. Since the Bears have had the successful run in the markets I sum up my post with a word of praise for them;

Fall is graceful and mysterious.
It sneaks up on you like a crisp chill.
It steals the vegetation of life.
As it drifts into the slumber of night.

Chantelle Clark

Hmmm I would have preferred this as a eulogy for bears…but it’s too early for that for the time being!!!

DOWn and bOILing! Nifty Recap For The Day!

The inverse head and shoulders pattern we saw on the hourly charts on yesterday now stands negated, beaten and badly bruised! This also gives us a lesson that chart patterns or indicators are not infallible. PRICE as the say is Supreme! Technically everything was well placed for us (a nice little up move we had envisaged) at yesterday’s close. So what was the story this morning glory? Well for starters we were DOWned on cRUDE shocks. Simply put with DOW bOILing and the global markets weak on the same concerns, we fared no better in the over all picture. In addition we had our Inflation Figures which though rose marginally compared to last week, were still a cause of discomfort. We opened weak as expected, strangely it is not a gap down (technically) nevertheless a very vicious move to the downside in the first few seconds. Rest of the day was spent amidst volatility and trying to protect the lows! On the daily chart we can see that we are still above (4093) the June 25^th Low. I wouldn’t say that we have found ourselves THE BOTTOM, maybe its one of the bottoms, to be followed by more. Technically if this holds on Monday then one can be sure of it as a short term swing low and play for a pullback and look for a shorting opportunity near the EMA area. Thus passes another week marred with RED!

JULY: This is one of the peculiarly dangerous months to speculate in stocks. The other are October, January, September, April, November, May, March, June, December, August, and February.

Mark Twain

A lesson In Patterns!

The above chart is sent by a close friend Jignesh Patel who is also a learner like me! A nice chart for people who like to work with classical patterns.

Nifty Recap For The Day!!!

Another volatile derivatives expiry behind us. Nifty opened firm, continuing the action from yesterday. We have managed to close in the upper range of intra day action. This rally is more a result of oversold levels than anything else. As traders we should be looking to play these short term swings. Today I have done away with the 5 minute chart and replaced it with hourly chart. The area marked with the dashed ellipse shows a small inverse head and shoulders pattern with an upside target of 4450 for starters. But the first resistance zone is 4360 and it looks strong! On the downside we need to protect 4225/4230 (failing to do so would result in some panic and bottom testing). Looking at the daily chart, we can see, all the three indicators (MACD, STOCH and RSI) suggest a buy. The price is extended from the EMA’s and need to pull back and go back to the value area (this is also the target of the inv h&S we see on hourly charts). Now the caveat; tomorrow we have our Inflation numbers. Plus with the weekend coming up traders might be not comfortable in taking longs home since we are still faced with some uncertainty regarding the fate of our government vis a vis the civilian nuclear deal. Assuming we react negatively to Inflation figures and still manage to hold 4225/30 then that would be an ideal entry for going long but I would suggest to play small and play well!

There are two times in a man's life when he should not speculate: when he can't afford it and when he can.
Mark Twain.

There Is But Little Hope for Slaves of Fortune! Nifty Recap For The Day!

There is but little hope for slaves of fortune,
Who will not share their failures with their will.
Mastered by the wind, they blame their portion
On chance, which sets their course for good or ill.
But one’s bad luck fits snug on who one is;
One’s fortune is the lyrics of one’s song.

Yeah….just tryin2impress here with a poetic interlude (the above lines are written by Nicholas Gordon)! I am neither congratulating the Bulls nor berating the Bears because I am myself lost and confused about my role in the whole scenario and I hate to be a pig waiting to be slaughtered! Nevertheless we all indeed are Slaves Of Fortune! Nifty’s open was expected following weak overnight cues from the world markets plus a CRR and Repo hike by RBI. Equally surprising was the way this news was taken into the stride and with a little help from strong Asian markets and a firm opening in European bourses we had ourselves a nice trending day but filled with lot of spasmodic reactions. For every analyst worth his salt this rally was expected because of oversold levels, and it suggested a relief from the red we were so accustomed to seeing for last one week. Normally we can’t predict the market behaviour but today Nifty did favor the brave albeit temporarily, and then it confused the novices with NOISE. On the daily chart we have closed above the psychological level of 4250 and if there are no nasty surprises (wishful thinking!) we should see 4350/60. Having said this we must consider some external factors like important Fed meet and tomorrow being the derivatives expiry for us. Also a cause of concern is our very own Left Oscillator (Nuke Deal), which has started to swing wildly!