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Thursday, June 12, 2008

Market Update - June 13rd 2008

Friends, been quite busy with work and other stuff...this is why I did not post for a couple of days...The other thing is that I had said on last update that market will try to stage a corrective upmove...And I did not see anything for this view to change...which is why I did not post an update..

Today I am starting with the hourly chart...You can see the important lines here...4620 is important resistance right now...If we go above this, we get to 4720/4750 area...But that is the max I am seeing right now for this corrective upmove..

Next heres the daily...Again same viewpoint...different timeframe..You can see how important 4620 and 4730 areas are important in this chart...Write down these numbers if you havent already.

Heres the weekly..Just wanted to illustrate one point here...i.e the weekly stochastics...Meaning unless it turns back up, I do not think it is safe to start buying for longer term...

Now the very long term chart.
This is what I see...For what its worth...
Obviously it is not going to be a straight line down...
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
Could end at one of above...
At this point I am also favouring 3600 area since A=C approx if that is what it is...
A started at 6350 till 4450 --> 1900 pts
C started from 5300 ---> 1900 pts means 3400 BINGO...Close enough to 3600 give or take...
So let us C...Please note bouncebacks will happen...I expect lets say around 4620...maybe 4750 after which the LAST BIG downside should resume...

Visit this for a refresher(This was posted a MONTH back):

Best...And take care...Let the dust settle...There is no need to rush in...

Monday, June 9, 2008

What Next?

We broke some very important supports yesterday intraday but closed above the most important recent support...So what next?

Looks to me like wave 3 of C might be over...If so, we should have some sidewise moves for some time before the next wave down opens...My thought would be to cover if you have any longs and stay flat or try some shorts if confident enough...We might get some upside in coming day(s) to do this....If we are setting up for the 5th wave down of C, believe me you dont want to be holding longs when this happens...Best case might be to take a month long vacation from the markets and then come back and reevaluate.
VIX is slowly going up again...I will be very interested to see if we can get back to 50s area of panic again...This will be a sure sign to get long and start buying for long term also....
Note that we are at 32 now.
These are treacherous times....Comments and Questions Welcome.

Sunday, June 8, 2008

Market Outlook - Two Possibilities

I think we are at a very significant point in our markets...Its do or die...I am looking at 2 distinct possibilities here..At this point both look equally likely even though my gut feel says its going to be the first one...I also prefer this one since it is going to throw up some significant longer term investment opportunities...

Okay first one below...I have drawn a possible path for this one to take if this is the count playing out...This says the Big C down is running now and we are somewhere in wave 3 of C. This should complete somewhere above 4200 and give a bounceback to 4500/4600....And then the finale till 4000 tgt1 , 3600 tgt2, 3300 tgt3. If we do this and go below 4000, I will say slowly start deploying long term investment funds.

Possibility 2 here...What this is saying is that we have a 4th wave ABCDE going on...Or a triangle consolidation....This says we cannot go below 4400...If it does, this one goes out of the window.
This is obviously the more bullish scenario.

Now both possibilities say short term we are going to bounce back a bit....4400 is key...Watch it.
Some factors are telling me a lot of players are expecting 4440 area to hold....But will the market oblige? Remember - The majority is usually wrong! :)