Hurst Cycles Trading Software - Accurately Forecast Nifty and Stock Cycles

Sunday, June 15, 2008

Market Thoughts - June 16th

Lets face it...Friday was a stalemate b/w the bulls and the bears...Very volatile in a range...Bears continually tried to push down the prices but when there is a such a huge short interest open in the market and majority is bearish, the market will behave like a beachball...No matter how hard you try to push it down, it bounces right back up...!

Coming to this week...As was said last week, the market should try to stage a bounceback to 4620 area first and above that if sustained, we should get to the 4700/4750 area...Well the market held so far...We might be able to see 4600 and 4620 today or some short covering and new buying interest coming into the market. I am not sure if we will sustain above 4620 .. But let us see...From one of these areas, we can open a new wave down...

Earlier I was expecting that we might open a really big 5 down maybe to 4000 or even 3600...But at this point, looking at momentum and other factors, I think max pain might be over or very close to over...Best case for the market right now is for us to touch 4620, sell off from there, and retest the lows. Lets see if this turns out...On the retest, if we hold 4400/4350 or even slightly lower at lets say 4300/4250 area, I think we might be at a very important intermediate bottom. Maybe even the bottom for the year....

In other words, we should look to set up longer term portfolios over next 2-3 weeks is what my gut feel is saying...However I am looking toward market moves over next 2 weeks to confirm my ideas so that I can make a more confident decision.

We are not out of the woods yet but some encouraging signals are there...

Okay here is the hourly chart attached above...You can see what I was talking about in the above writeup...Lets see if it holds...We can set a higher low, double bottom or even a slightly lower low with divergence in indicators - This is what we should watch out for in coming 2 weeks.
Heres the daily now...Same idea even though a very optimistic move is shown here...If the bottom gets confirmed as explained above, expect the above scenario unfolding toward end of the year.


Heres the weekly...Just posting this here to show some caution...See stochastics here...still no indication for a longer term buy...In older posts, I have pointed out how, stochastics and macd crossovers on the weekly generally give very strong long term buy signals...
Nothing yet on this chart...However if stochastics does turn up, we can get a weekly divergence which will be a very strong buy signal for longer term.


Heres the very long term chart...
As posted before...
Of the major bull run that lasted more than 6 years...
Start at 850 Nifty...End at 6350
Nifty.38.2% retracement is 4333
50% is 3667
61.8% is 3002

Now before I said we can go for 3600 as a worst case...However after further analysis this weekend, I think we might not get so far....There is good buying support coming in a lower levels...
And also we have hit very close to the 38.2% retracement...Maybe this is all!
Forever optimistic! ;)
Okay now some speculation here...
Lets say we do set an intermediate term bottom and turn up strongly from here, I do not see the possibility of this being a new bull wave...However it would be just an X wave running maybe till the end of this year..and maybe running very close to all time highs on nifty....After which the next ABC should start target lower lows or maybe even a very long term double bottom...But this is just speculation so lets burn that bridge when we get there ;)

Dont jump in and buy yet...lets wait for some more evidence...Will definitely post here when I buy stocks and which ones am buying...some stocks that look good for me are rpl, reliance, panacea, l&t and some others...Will post a more comprehensive list when I do start buying for longer term....
Have a good trading day!
Best.

1 comment:

FJB said...

Lee ... I got out of my longs as I feel we will continue to be down for the period till Sep. There will be bounces but the lows of at least 4100 if not 3600 (still possible) will be seen ... so right now i am out of FNO and though i have picked up a choice long term portfolio ... i would be looking at rotating it at least once to lower my acquisition price in the tumble that is likely to be seen in the next 3 months