Another Fascinating Juncture

Another interesting week of trading has gone by and the next 2 weeks for me will be very very interesting and important...Now almost all weeks are like this so you might wonder whats so special about this one?...I will explain. Lets start with the weekly.

Now what is important here is that the MACD has turned up and is on the verge of breakout out upward...BUT see the last time we were this close...It just kissed back and failed. I will be watching this one very intently for the signals that the same will happen.

Notice also how the stochastics gave an important intermediate term buy and is still on a buy.
I have been hammering the table about this important gem for a long time.

If I were to take a guess, I would say another kissback and failure for the MACD but let the market tell us that.

Now next the daily. We have a breakout out of the channel and we are targetting higher levels of 4720-4750. Important fibo levels in both retracement terms of the bigger decline and the recent more smaller decline. 4800 odd should be tremendous resistance and I would wager we fail before we get there...




I also think that the next SIGNIFICANT low will be a major major BUY point. You can refer my counts from earlier and see why I think so. ABC-X-ABC after which a big multi-month rally.
This is still what I am thinking and still sticking with it.

Here is the chart I had posted some time back. See the lines drawn predicting possible moves for the market and see market action up to date. It performed quite well for me and was able to make some bucks. However its still sad how ppl ridicule EWT..Recently on a forum I frequent many folks came out making fun of EWT...Its funny when ppl do not understand something, then like to laugh at it..I dont hold it against them...Its just ignorance.

I make it a point never to belittle a new method but instead try to understand and prove it right or wrong...If its useful, its a good tool to add to your arsenal. If not, well let it go. This is the hallmark or a good trader. Also finding out what works for you and sticking with it. Its very important to be open to new ideas when trading in the financial markets.

Okay enough of preaching. Lets look at the hourly also. At this point nothing is clear from this one. I am not going to try to count the subwaves because it is just not clear...I do believe however that we are still doing an ABC correction upward after which we should go lower...

Maybe a retest of 3800 or maybe a bit lower. Again dont expect this to happen all of a sudden. Tops and Bottoms are very painstaking affairs. Give it time.

Fundamentally speaking, I was looking at EPS data of the NIFTY for this year and was shocked to see we have a very miserly growth figure of 8% odd last year. This is quite shocking and way below what I was expecting. And with the RBI tightening down on things, we need to pay attention here. Maybe its time to put the INDIA SHINING story on the back burner for some time and just play the market trading the swings.

Comments are welcome please. This is what will give me incentive to post and also will heighten discussion and well enliven up things more!

Trade Safe and Have a Great Week! ;)

Best.

Market Update - Aug 5th

Bullishness is back on the street...I was bullish from the lows...now slowly turning bearish...we may get atleast a pullback from this levels...We need to see the nature and extent of the pullback to decide whether to buy the dip...

Market can go up to 4750-4800 area on this move...Before that, we can have some pullback...Or a serious dip...If we go below 4350, then it will be a much bigger correction or start of a new bear move...Any corrections that stay above it may just be a smallish correction.

Note how the stochastics are in the range of highs where it has signalled the start of a new correction or bear move...Better to book profits in longs if you have any...

I have started some small shorts which I will be looking to add to over next few days if we go some more higher...Taking each day as it comes...

Best.

Correction...The Bigger Picture

The bigger picture on the past 6 months correction. I know there are other possible and more bullish alternates but I prefer this one until I see evidence disproving this. All my comments are on the chart - Open in a new window to view.

EWT can be confusing to newbies but I will be happy to explain in case anyone has any questions.

Best.

Market Update - Some possible outlines

Nifty chart updated and attached...I have outlined 2 possible moves that I see possible over next few days...We are still in a corrective bounce aka a bear market rally...We went up to the 50% retracement area approx 4500 and then corrected 50% of THAT advance to the recent lows made in the past couple of days...So far so good...

Next what can happen is defined...This is a B wave...So we should go up again and resist somewhere above...Either at the downtrend channel boundary or we should go above and stop at the 61.8% retrace of 4720...Either way in my opinion upside is limited in the short term...I will be looking to disinvest all of my holding over the next few days to 1 week...

Trade safe...When this rise gets done, I expect some strong and extreme carnage to happen again.

Very short term - We are bullish.

Medium term - We should turn bearish again.

Anyone have questions? - Please post in the comments section or on the chatbox.

Best.

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.