Critical Juncture

Again we seem to be at a very critical junture in our market...Open below chart in a new window to see what I am talking about. This can be a valid count but we obviously need more information before taking a sure call on the market direction...The low that will be set today should be very important I think....Trade safe.

The other thing is the possibility of another potential island reversal forming..because of the earlier huge gap up and a similar gap down today can together create a island similar to the one we had a few months back.

Best.

Bulls back with a Bang!

What a week...Bear market rallies are quick and furious and will rip out the frigging lips of all the bears...lol...What next?...I have posted this here several times and its very clear what its indicating so am not going to write anything more on this chart...

So what next...?...I see a decent pull back over the next few days to 1 week...We will look at the nature of this pullback to look at opportunites to add longs...At this point I am only seeing this as a bear market rally but it is a rally nevertheless...its not over yet...and can be profitted from...Which is why I cannot understand the die hard bears still calling for 3600...We also had several TV analyst dumbos calling for 3000 and lower on nifty...They got their heads handed to them on a platter...which is why I am totally against following the TV analysts..lol

Best.

Do or Die Week

Friday was fun..Finally a good day for da bools :-) And about time too...

Some bears would have gotten clobbered on Friday...What next?...Its the end of the week, so lets look at weekly chart below...One thing...I have mentioned how important this is before...Stochastics crossover on the weekly...One of the best bottom spotters in my book....The only problem is this next week is one filled with external news events...No need to tell anyone what it is...Tuesday will be very important for our markets...

I was thinking we get one more low..maybe a higher one..but market had other ideas it seems...

For now, for the bulls, the stop is around 4050(tight stop), 3960-3920 levels is the final stop to keep the bull case alive...Dont be long below 3920...This the line in the sand for me...After 4050 ofcourse...

I have a straddle strategy in options to profit either way...let us see if it works! :)

If the govt does NOT fall, a super bear rally to the top of the channel will happen...approx 4500 will come...So much depends on this that it makes some sense to sit out of the market or gutsy players can try some option strategies...to profit either way...

Have a good trading week.

Best.

One More Low?

Past few days market action has been cautiously bullish...lot of it on short covering...Actual buying has been missing in this market...Everyone and their uncle is bearish now..Maybe we need to start being bullish...albeit very slowly...

I see possibility of one more low...possibly a lower low at around 3650-3700...I will also be happy with a higher low...Before we lauch into an intermediate term rally of maybe 1-2 months...After which there is more carnage on the cards...So this is still a traders market...Keep that in mind...If trading on the long side, its been very tough to hold on to gains..Trends change almost immediately and without much warning...The short side has been easier to play...Lots of time to cover etc etc...Character change in the market...We need to watch for this to change...

Some positives and bullish signals exist on the charts..We can see an exhaustion of selling..However buyers seem to be on strike...But when they come back, we can see some quickfire upside...

Why do I say one more low?...Because the wave structure is suggesting that...Again I will be happy with a low at 3800 also...Ideal will be 3650 to get long aggresively...


So to sum up I am bearish very short term...medium term cautiously bullish...long term clearly bearish... :)

Daily chart below...You can see the lines of importance in here...These will be in play over next few days...Looks like we are going to play within this channel for a pretty long time!

Best.

Rangebound...For NOW...

3 lines (and a bearish flag) defining the market now..It needs to breakout or down to begin some moves...

US market action today looked like it was hammering out a bottom...Todays lows will be very important.

In our mkt, some stocks interesting on the long side are asian electronics and selan exp...Check it out...

General market looks rangebound only...Either the flag needs to breakdown conclusively and target 3850 and lower toward 3620 area...OR we need to breakout above 4220 and rocket upward...Market might be waiting to see the results of the govt confidence motion...If govt does not fall, we can see a rocket move upward...However this wave is turning out to be quite difficult to play...Play the lines as shown above.

Best.

Market Update - July 14th

The last time I posted, I said that there was a good chance to go down and retest the lows at a minimum and also a good chance of going down to 3600-3650 area...Until Friday noon, things were looking decently bullish...Then the rest of Friday kinda damaged the bullish look...even though a very wounded bull...Now the bull is really wounded again...

Lets take a look at the daily below...MACD has turned up...However Friday action makes me very cautious..remember that the MACD is a lagging indicator...Positive crossings should not be trusted in a bear market..and we are in the heart of the bear for sure.

Now the weekly below...Stochastics have turned up..would have looked much better if it was not for Friday...But its not above 20 yet and until this happens, we cannot be bullish..yet..

Wait for the weekly red stochastics line to turn up above 20, then we can go for a short-to medium term buy...

If I were to harbour a guess and based on the chart posted in the post below this one - Remember I had marked in there that we have one more downside wave...I think its started...We do not know at this point how much it can go..But let us see if 3850 area will hold first...If we fail this, then we go straight to 3650-3600 area...and maybe a bit more lower than that...But this should hold.

US market also in the doldrums right now...Almost done but not quite...Just like us...Some more downside and panic to come...For sure...

I think we get some carnage and lots of panic in beginning of week...and then stabilization towards end of week...Lets see....

Best.

Super Bounce...What Next?

What a rally...I got up today morning and looked at my screen and could not believe my eyes...lol..Being so used to seeing -4 and -5 % down for past few days, couldnt believe 5% rally...Nice...SO...What next? Are we done here?

I think there is some more pain to come to the downside...Why? Because the EWT structure is suggesting one more low..I have atonated this in one of the charts below...Now pls note that this can be a higher low also even though unlikely...I think we should target 3600 and 3550 in coming few days..After that what can happen?...We will test this bottoming area several times over and over...Thats the only way a bottom is formed...We will pick up but I think now we need to start looking at some good stocks to pick up...Looking over past fews data some stocks that really stand out to me is NTPC, INFY, RELPET, RELIANCE, BHEL and some others also but these look real good...Wait for some more pullbacks to buy OR buy more...

Okay now see the EWT counts on the daily I have tried to do...Dont take this as exact..EWT is just an attempt to try and determine possibilities...For trading we have to rely on other tools..


Okay having said that, we are in the last waves of the last wave...See A, B, and C has completed
4 waves; The fifth however extended...And out of this the 5th should start soon..Probably today..This targets 3600-3550 area...Also note this is the bottom of the channel - the doomsday channel as I have referred to it in previous posts :) .. Not sure if we get that far down even though its very very likely...But I feel we can confidently buy the panic lows that come within the next week or so...

Now the weekly...Several times I have mentioned how the weekly stochastics are a good longer term top and bottom spotter...As you can see...Almost there but not quite...We can wait for it to cross over...Before jumping in all out! ;)

Best.

Market Thoughts

Halo Friends...

Interesting day it was on Monday...Low volume...And FIIs and DIIs figure showed no big selling...So who sold? I think retail capitulated yesterday...Atleast to some extent....What I found most interesting here was how some midcap stocks went down heavily without any real reason...

One thing I have noticed is when we get very close to a market top, speculative midcaps start flying...daily 5%, 10% up and exact opposite at the bottoms...This is nothing but retail speculators getting active..Often very late to the game...Happens regularly and will keep happening I guess...

So what am I doing now?...Holding tight to longs and adding...Throwing in hedges and booking profits on them so that my cash longs dont suffer too much...Still in the red...But adding on as we go down...Markets are irrational creatures...When we go up we overdo it...When we go down, we overdo it...I think we are overdoing it now...How much more? Not sure but watch 3950...This is very very important in short term...Break this and it opens up 3800, 3600 and then 3400...
But now is a good time to be doing a bit of SIP daily into quality stocks...

Not posting charts today but above figures should be important...

One thing here is we need atleast 2 weeks of sidewise to up to turn the trend back up...So if you arent long yet, wait for this....Weekly stochastics as I have mentioned below should tell us when its safe to go all in....I will update when I see this happening..

Best.

Market Update - June 26th 2008

Friends, been a long time since I posted some charts...Mostly coz I was very busy with work and also coz there was not much to post...Yesterday was an important day in my view...And I got almost the lows...Lets look at the charts now...See how the daily turned up from the mid trend line...So far good...but before we get all bullish, we will almost surely have a good pullback..For me the most ideal situation will be if we dont go below earlier low...set a higher low and move up...But I feel any pullbacks from now on will be very good to accumulate some good stocks..It seems like market will stick with my earlier idea of not going below 4000 this time around..let us see..

Coming to the weekly...What is important here is how the stochastics looks....Very oversold..And good possibility of turning up over next 2 weeks....Pullbacks should be bought in my very humble opinion...Weekly stochastics are like the holy grail for me for longer term buys and sells..

Let us see...Trade safe.

Best.

Quick Update - June 25th

Quick Update on the market...No time right now to post charts or for more detailed analysis but looks like today is a very good day to buy....I am almost 100% long now and covered all my puts also...Dont get me wrong...downside risk is still there for some more time...but risk reward is good on long time now for longer term...More to follow later!

Best.

Some Updates and Thoughts

Well we had some sort of a capitulation day on Friday and its not over...Probably far from it...I was expecting a bottom to form above 4000 without too much price damage however looking at overall scenario now, it does not look like it...We might see 3600/3400 which was the 2nd alternative I was looking at...Expect lots of panic next few days as noises emerge from different areas..However this is not the end of the world and use the opportunities to pick up the good scrips you like - after a few days - no need for rushing in....Supports will be there at 4000, 3800 and 3600...If we see 3600, blindly start buying...We might see this sometime in July or August...

I was expecting a rally into end of the year..Probably will take more time and more price damage before this happens...We have a bradley turn date in September so it may take till then for all the bottoming action to get over...THE bottom might however form before that....

If A=C, bottom = 3400 area....3600 also likely. Lets see.

Update on my positions: As I posted before I scaled into a 50% long posn in cash last week...Turned out to be too early...However since I am heavily hedged in July Puts, I am not going to lose anything...Probably gain more....Need to trade what I see...At this point, all I can see is there is more pain coming...But it should be viewed as an opportunity.

I will post if I see something significant developing...

Best.

Positive Divergence setting up on Daily!

Comments on chart...And comments welcome from all.

Last time this happened, we rallied 800 pts on Nifty...I did post on some forums that time also since I did not have this blog..Will history repeat? :-) Let us C...

Best to be cautious but remember its also very easy to be bearish..I am also torn apart in confusion even though bullish for now...

The other thing worth of noting is that internals are improving..A/D ratio etc improving..

Dont have charts to put up for this but working on developing something.

Best.

EWI Free Update on Asian Markets - India Included

Heres the link to the EWI FREE update on the asian markets..Including India...

https://www.yousendit.com/transfer.php?action=download&ufid=75BFA3316A4E2616

Now some notes here...They are bullish...they are seeing the 5th wave coming up into the end of this year and seeing new highs coming up..Maybe....I think...My views differ as you can see from previous posts...I think we see an X wave going up to highs later this year but probably not exceeding all time highs...After this X wave, the bear should resume..this is what I think at this point...Let us C... :)

Either way there is a lot of pain left to come in 2009 and 2010..I would recommend positioning yourself for this soon...lets be vigilant and nimble...This is a must in this current environment!

Best

Update - June 17th 2008

So the bounce continues...I scaled into 50% longs in few nifty August 5000 calls(just for speculation) and also all of the stocks mentioned in below post...Since I am still expecting a pullback the extent of which we cannot be sure of at this instant, also took some PUTS to
hedge the stocks for July...So thats how I am positioned now...

Expecting pullback shortly...might try a bit more higher before that...Many folks are planning to short at 4800 area...Well and good...However do not get too trapped in this view...Could be a bear trap...So be quick whatever you do...

I have noted, that operators get public bulled up and screw them...Then get them beared up and again screw them...DONT go with the flow...Stand out from the crowd!!...Be nimble and quick whatever you do...Thats all I have to say.

On a side note:
Heres a good read on the Martin Armstrong Model...Pay attention..This guy is a genius. (note that this is not a model for the market but rather a model on the economic/business cycle..so markets may not follow the timeframes explicitly..however I do see a good relationship between the 2)...The 8(8.6) yr cycle that Vivek Patel favours is clearly visible
here...

http://hubpages.com/hub/Martin_Armstrong_Business_Cycle_Model

My thought is that we are in a 2-3 year bear market...This does not mean that we will NOT have fast and furious rallies in between with the bottom pickers and the short covering...But overall I think we drift down into late 2010 and early 2011...Now these are not numbers I just pulled out of my hat...this is based on the Martin Armstrong economic model(google this to find out more)...And from what I see...I think we will rally(X wave) from around here to maybe september/october timeframe in time for the US elections and turn down very hard from there...into 2009...

Ofcourse this is all speculation only...

Best.

Some more picks!

Some more picks...I am thinking of slowly accumulating these over next 2 weeks...As I said before we are at or very close to an intermediate bottom. Please note this is all for CASH ONLY...No FNO...And timeframe I am thinking till end of this year...For now.

Comments are on the chart...

If you can think of any other good picks, please add in comments on this post.

Best.

Heres a gem that should not be missed!

After the big IPO hype, here is one stock that we havent heard much about...MINDTREE...See how its consolidating nicely after a small and quick run up...Looks like a bullish flag to me...Buy when it breaks out OR start buying in small amounts right now itself...play with stops with a close below channel indicated above...Please note that this is a longer term play...so only cash...no fno.

This one could turn out to be a real GEM in coming days/months...Remember you heard this one here first!

Best.

The Doomsday Channel..Or is it?

Heres the channel of 'doom' that has been playing around for the past few months...This here shows the lines that our market needs to get above to confirm bullishness....Till then chop chop and maybe a good opportunity to pick up some good scrips...

I said yesterday...we can get to 4620 and pull back from there...been there done that...now what next?....Maybe we pull back to 4520 area and try once more 4620...above 4620, we can rush to 4700 area and then again pull back...

Honestly I would love to see 4300/4250 so I can load up on bullish positions...But we might not get it...Maybe we only get 4450/4400...But lets not jump ahead of ourselves and see how it plays out...I see market moves as part of a big puzzle...And one by one the pieces should fit into place...!...Its key to be patient..!

Best.

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.

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):

http://theindianmarketblog.blogspot.com/2008/05/elliot-wave-counts-and-ideas.html

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

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.

Best.