Update: 21JUN 2009

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UPDATE : 14MAY 2009

Almost all the Asian markets made intraweek peak on Monday except SENSEX/NIFTY which are trading with high volatility everyday.  But the western markets have not been able to breach their previous week's peak so far.  In other words, there are fresh support levels for those who have made a new high this week.

We are of the view that this is a corrective phase and the medium term remains positive as long as the support levels for medium term, given in the weekly outlook below, are not breached.  It is sideways trend with negative bias and short term bulls and bears could get whipsawed. In other words, the short term traders should exit as and when asked to in the weekly outlook below and wait for the lower levels to enter again; or re-enter on a close above recent highs. Bears also should not venture out so soon and the itching fingers of the bulls should be kept under control.   Intraday rules are different! 

NIKKEI225 : Decline on low volume is positive sign. New Supports are 9118 and 9000. A close above the first would help maintain the uptrend and a close below the second would not be positive in the short term.

SHANGHAI COMPOSITE: New supports are 2556 and 2521. A close above first support would be positive while a close below the second would weaken the short term trend. 

HANGSENG: Decline on low volume is positive sign. New supports are 16452 and 16072. A close above the first would be positive but a close below second would weaken it more.

SENSEX/NIFTY: There is no change in levels and outlook given in the weekly below.

Weekly levels and outlook given below remain unaltered for all other Global markets.

Trade accordingly! 

U.S. DOW; S&P500; WEEKLY OUTLOOK: 11MAY TO 15MAY 2009

DOW(8575)

This index followed almost our premarket script of Friday and closed near the desired mark.It is a positive development. Volume also was not below average though the RSI looks somewhat reluctant to enter into the overbought zone. Only hitch is that markets have normally moved contrary to the overwhelming consensus, but this time it would be too depressing if this index does not manage to atleast rise up to its 200dma around 9000 levels.  All its peers around the globe including FTSE100 have had the honor of reaching upto their 200dma by now. So, we very much hope that it would not disappoint. Stay with the trend and the trend is up, so far!

Resistance at 8676 needs to be overcome to move upto 9000.  Then next resistance area would be 9100 to 9200. If the present momentum continues then it could be headed towards 9500 in the days ahead.

Supports would be at 8500 and then at 8400. Immediate term traders may desist from initiating fresh longs on a close below the first support.  Risk appetite traders can buy with stop at 8400. Short term existing long positions may exit on a close below 8340.  But medium tem would remain positive until the index gives a close below 7780.  In other words, the index can take a rebound from any level above here in the event of a correction.  

*******

S&P500(929.23)

This index has been lending moral support to the U.S. markets by displaying much better picture over the last few months. But it has also yet to overcome its 200dma at 950 area. Volatility Index VIX has also been supportive and the confidence of bulls also is reflected in PCR(Put Call Ratio) which is around 0.8. It implies that there are more Calls in the system in anticipation of higher highs. At the same time it is also a negative that there would be lesser cushion in the event of any decline. The week ahead is also the Options expiry week.  So, it is a mixed bag of positives and negatives for the week ahead.  Still the momentum is in favour of the bulls. It would do to stay with the trend.

Resistances are at 943, 952 and 966.  A firm close above 952 would be a signal that this index could head toward its medium target 1040.

Supports are at 919.2, 915.8 and 912.4. Avoid fresh longs on a close below the first support.  Risk appetite traders can look for opportunity if takes a bounce from the second support.  Short term  trend turns sour below the third support.  However, the Medium term trend stay positive as long as this index holds above 830.

Disclaimer: This is not an invitation to trade in the markets. Use your own discretion as trading in the markets also can cause financial loss to you. The usual disclaimer applies as mentioned directly indirectly on this blog intermitently.

U.K. FTSE100; WEEKLY OUTLOOK: 11MAY TO 15MAY 2009

FTSE100(4462)

Finally this index moved upto 200dma(4440) and gave a close above it.  Normally, we should wait for two weekly closes above 200dma to confirm signal of having left the worse behind.  The momentum is still strong and oscillators are just into the overbought zone(Early overbought condition is not a cause for worry but a signal to remain long for little more time with appropriate stop loss). Weekly oscillators are also in positive territory and pointing up.  All this implies that there is still enough steam left here to keep trading at higher levels in the days ahead.  But of course, the resistances are always the spoiler and we should be careful about booking some profits near resistances.

It formed intraweek peak at 4521, a little below its crucial resistance 4555. If this index manages to close above this area then the next target would be 4625.  Further a close above this mark would be met by resistance 4676, which surpassed would be a very positive signal of having broken out of its upper range. The medium term target of 4800 would come into the reckoning above here.  At the same time it would be prudent to remain vigilant as this index has also been rising vertically, though little slower than its Asian peers.

Supports are at 4344, 4282 and 4235.  Avoid fresh longs if closes below the first support.  But there could also be a rebound from 4280-4290 area which could be an opportunity to initiate fresh longs for short term gains.  4235 remains the stop loss.

The uptrend goes awry on a close below 4115 only.

The usual disclaimer applies.

INDIA SENSEX; NIFTY WEEKLY OUTLOOK:11MAY TO 15MAY 2009

SENSEX(11876)

Indian markets have been rising vertically since March lows.  But profit booking has begun over the last two trading sessions as there are multiple resistances ahead.  Considering the global sentiment, these resistnce could be surpassed but it may not be easy to sustain at higher levels unless there is a rebound after some correction.  

In other words, a correction is due in the markets here and it would have to be seen what would be the intensity and magnitude of this.  Some are predicting it to be a sharp one but the accumulation of more puts is pointing towards sufficient cushion to withstand any sharp declines. The favoured view would be a sideways negative trending correction -painful for bulls and bears both.  So, it would do to remain on sidelines with lighter positions until clarity emerges.  

Though very unlikely, on the other hand, if markets somehow start busting the resistances ahead then this index has a ceiling between 12800 and 13000 where massive shorting could take place. But this last view does not find favour in the given situation as the indicators are not supportive.

The other bone of contention for speculators is the impending result of parliamentary elections next week. It surely is a big event for the largest democracy of the world where electrorate is dreadfully silent this time and big surprises could be in the offing.  But it is more likely that 75% of this factor is already priced in, and speculators should not initiate any positon specially for this event.

Resistances are at 12276, 12568 and then 12716. Go long only on a close above the first resistance.

Supports are at 11677, 11494 and 11310.  No fresh long positions on a close below 11677.  Wait for a rebound from 11494 area for short term gains. Stop loss is 11310 but strong existing positions could find support from its 200dma at 11100 levels.

Medium term is up as long as holding above 10658.  In other words, the picture is not dismal until it closes below this level and we can expect resumption of uptrend from any level above here.

*******

NSE S&P CNX NIFTY(3621)

This index also faces multiple resistances ahead.  Until now we were expecting it to keep going, oblivious of these resistances due to the reason that sentiment was too high.  But after a closer review of the charts and the trend over the last two sessions, it was found that the market players are becoming wary of some crucial resistances ahead.  

All other things remaining the same as given in SENSEX above, this index has been giving more signals of having broken out of the bearish range.  Still we will wait for more confirmation because it is the main derivative index and things move little faster comparatively.

Trade according to the outlook given for SENSEX.

Formidable Resistances are at 3734 and then at 3776.  Once past the second resistance, the medium term target of 4135 would come into the reckoning. 

Supports are at 3556, 3507 and 3457.  No fresh longs below the first support.  Savvy traders can look for a bounce from the second support for short term gains.  Stop loss is 3457.  The 200dma at 3370 could be another point of rebound but medium term is positive as long as above 3267. The index can resume uptrend from anywhere above this mark.

Disclaimer: The usual disclaimer applies as given on this blog intermitently.

Charts:Quote.com

JAPAN;CHINA;HONGKONG: WEEKLY OUTLOOK:11MAY TO 15MAY

JAPAN NIKKEI225(9434):

It did a volte face last week and gave a gap open beyond its formidable resistance 9000, accompanied by big volume.  All this has been happening here inspite of its big corporates giving dismal earnigns outlook.  So, it is yet to be seen if this gap up was breakaway or not!  But it is more likely that the far east markets are reflecting the positive effect of their stimulus packages of the recent past.

This index faces stiff resistance in the area 9600-9650. This resistance band is not far from the current level and the global momentum also is supportive. Still it would be prudent to remain vigilant until it closes firmly above here.  On the other hand, if it does give a firm weekly close as desired, then it would have confirmed a double bottom for itself(encircled) and also confirmaion of reversal to primary uptrend.  Watch out!  Then it would be headed towards 12200 in the medium term.

Supports are at 9095, 8985 and 8870.  Buy on declines but desist from initiating fresh longs on a close below the first support. Traders watchout for a rebound from the second support, in case of a decline.  The uptrend loses momentum only on a close below 8870.  

*******

CHINA SHANGHAI COMPOSITE(2626)

So far, this index has been displaying all the characteristics of a reversal to primary uptrend. But this would be confirmed more once we measure the intensity and magnitude of a correction which should ensue after this continuous uptrend since November.  At the moment it is not showing any desire to undergo correction because the global trend is helping and has developed multiple supports on its way up.

It faces stiff resistance at 2725.  If it manages to move above here then the next target is 2975.

Supports for the week ahead are 2608 and 2591.  Buy on declines with second support as stop loss.  The immdiate uptrend would lose momentum if it could not hold support at 2533 on closing basis. Next major support area is 2500.

*******

HONG KONG HANGSENG(17390)

Similar to Nikkei, this index is also making an effort to qualify for a double bottom.  It seems to have done that already by closing above its range as it has moved above the given blue line on the chart.  Still we would need confirmation by waiting for another weekly close above this line.

This index faces stubborn resistance in 18520-18530 area.  Will it or wont it is the moot question. The momentum is strong and sentiment is upbeat though the asian markets are ripe for a correction also.  But trend is friend until and unless the crucial supports are breached.

If it manages to break through the 18520-18530 band then it would be headed towards it medium term targets of 20000 and 23000. 

Immediate Supports are at 16995, 16855 and 16715.  Immediate term traders should not initiate fresh longs on a close below 16855. High risk appetite traders can buy on declines upto 16300 with this support being the stop loss mark on closing basis.

Disclaimer: The usual disclaimer applies as is given on this blog intermitently.

Charts:Quote.com