Update: 21JUN 2009

It is interesting to note that some of the patron viewers are still visiting this blog for some interesting features that we could not include in www.stocksharetip.com/

With All the Best Wishes.

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

US PREMARKET OUTLOOK: 08MAY 2009

The spirit of momentum waned in the face of that 'stress test result'.  Profit booking happened on big volume and suddenly there appear some sharp divergence in momentum indicators. Bearish engulfing pattern on DOW and SPX could also be a matter of concern, but these candles do not have significant impact in a strong trend. The uptrend is intact so far and any good data could boost the markets ahead.

Data listed for today is Average Hourly Earnings, Nonfarm Payroll and Unemployment rate(Please see the economic calendar at the bottom of this page).

This data does have an impact on the markets in either direction and it is a day of cautious optimism for bulls. It would have to be seen how markets give closing to the week.  This weekly closing would help us determine the further trend as ususal. Our weekly update gets published here by Sunday. Watch out!

DOW(8410): Yesterdays high point was 8577 and low point 8358. For today, these two points would hold the key. A close below the low point should signal towards impending weakness in the short term. Similarly, a close above or near the high point should signal for fresh longs.  Favored view is that the US markets still have some steam left in it to move higher in the days ahead. 

S&P500(907.39): The high point on this index was 929.6 and the low point was 901.4. Trade according to the strategy given for DOW above.

At the same time it would also be prudent to have a look at the outlook of yesterday as given below.  Or click here to read it.

The Disclaimer applies as given on this blog intermitently.

FTSE100 PREMARKET OUTLOOK: 08MAY 2009

FTSE100 (4399)

Profit booking on this index was accompanied by high trading volume.  Formation of tall shadow doji candle on the chart would also cause some doubt of its continuing the uptrend.  But such candles normally do not have significant impact if the trend is very strong.  So far, the trend in this index is by no means weakened.  Yet, we should always be vary of such heights.

Short term traders should desist from initiating fresh longs on a close below 4344.  

Existing long positions of the short term should be exited below 4280.  

However, the risk appetite traders can initiate fresh longs at these levels for a rebound, with appropriate stop loss.  

U.K. Producer Price Index -PPI data today

U.S. Non Farm Payroll and Unemployment data today

The ususal disclaimer of this blog would apply.

Chart: Quote.com

ASIA OUTLOOK FOR TODAY: 08MAY 2009

Medium term and Short term both are up and more likely to continue in the near term.  The momentum suggests that the markets would not fall like salt immediately, though they could tade sideways with negative bias.  However, today being the last day of trading, everybody remains apprehensive about carrying their positions over to the next week.  Follwoing are the supports below which the short term traders should desist from initiating fresh longs -on closing basis. 

JAPAN NIKKE225: No fresh longs below 9075; Exit existing longs on a close below 8964

SHANGHAI COMPOSITE: No fresh longs below 2558; Exit existing longs below 2542

HONG KONG HANGSENG: No fresh longs below 16920; Exit existing longs below 16798

INDIA SENSEX: No fresh longs below 11770; Exit existing long positions below 11620.  

INDIA NIFTY: No fresh longs below 3577; Exit existing long positions below 3534

The above given levels are applicable on closing basis.

$DJIA $SPX PREMARKET OUTLOOK: 07MAY 2009

(Please click on charts to enlarge)

There was lot of fireworks on the U.S. markets yesterday and many short positions must have got squeezed out of the system.  The volume was very high and some fresh buying must have also taken place as some stocks gapped up with the help of better than expected employment change data and perhaps, the "last" worst news for BAC was out. Market players take such worst news in good stride 'if' the news is final in the series. 

Anyway, the mood is gung ho and the bears are back into their lairs in short to medium term.

S&P500(919.53)

It is latching on to its resitance at 920.  Having closed almost at the highest point of the day bodes well in the near term.  It has become a buy on declines since it moved past 900 mark. But the immediate term and short term traders should always observe caution at the tip of the wave.  Immediate support would be 911.5, 908.8 and 906. No fresh longs below911.5 for immediate term.  Short term traders can hold their long positions upto 900.  Risk appetite traders can put a stop at 893.  Short term goes awry on a close below 885.

Immediate resistnce in 920 area.  Targets beyond here would be 945 and 958 in short to medium term. 

DOW (8512)

This index stopped short of our given resistance at 8524 but did not close far below it.  Closing near it at 8512 is positive and the resistance would be easier to bust.  

Immediate supports are 8460 and 8422. Immediate term trader can buy the first support and with stop at the second one.

Short term long positions may hold as long as above 8370. Uptrend loses momentum on a close below 8245.

Immediate resistance is at 8524 and then at 8676.  The medium term target for this upmove could be 9000+. 

Disclaimer: This is not an invitation to trade in the markets.  Use your own discretion as it involves the risk of financial loss.

Charts:Quote.com

BAC : 07MAY 2009

BAC(12.69) -Bank of America Corporation

There were bullish connotations on the chart of this stock over the last few days and finally, yesterday it gained over 17% in just one session.  This stock is driven by high sentiment, negative and positive both, as it has been giving huge gap ups and gap downs since its March lows(see chart).  Therefore, yesterdays gap up may not be a breakaway from the range unless it keeps giving higher highs and higher lows in the days ahead.  Momentum traders can go long with stop at its yesterdays low at 11.50. 

However, the trend is strongly up and it is a buy on declines.  Short term traders can buy intraday declines with final stop at 11.20 on closing basis.  Traders with risk appetite can keep a stop at 10.70. Medium term is positive until it holds above 9.0.  Those who can not get the opportunity of buying on declines should go for call options of strikes from 13 to 16 if premium is not very high. The projected target is 16.5.

There is no formidable resistance visible until the band between 16.5 to 16.8.  It is more likely that this stock is charting its 5th wave up from its 20th Feb low.  So, this wave could terminate in the given band and a correction would ensue.  Thereafter, the magnitude of the envisaged correction would determine the long term outlook for this stock.  Keep watching!  

(The disclaimer would apply as given on this blog intemittently)

Chart: Quote.com

FTSE100 PREMARKET OUTLOOK: 07MAY 2009

U.K. FTSE100 (4396)

this index encountered resistance at 4440 (its 200dma) area and got repulsed from there.  But the momentum suggests that it would overcome this resistance and then the target would be 4600 level in the days ahead.

It is holding just above its immediate support at 4390.  But short term traders can buy on decline as long it does not give a close below 4350.  Traders with risk appetite can look for an opportunity on bounce from 4325 and 4300. 4295 would be the final stop loss for existing longs in the short term.  Medium term stays positive as long as above 4200.

You could also have a look at yesterday's outlook, though the support levels have changed for today.

Disclaimer: the outlook on this blog is not an invitation to trade accordingly.  Use your own discretion as tradigng in the markets also involves financial losses.

INDIA PREMARKET OUTLOOK: 07MAY 2009

Indian markets encountered resistances and drifted lower inspite of very positive signals from around the globe.  These indices have been rising vertically since their March lows and downtrending momentum indicators are urging them for a correction. Yesterday's down day was on good volume, implying that profit booking is taking place.  

Even if there is more steam left here, it would be prudent to be vigilant at such heights in the short term.  But medium term is very positive until far lower supports are taken out. There are multiple supports before that.

SENSEX/NIFTY

(The levels given below are on closing basis)

Immediate resistances is at 12272/3717. Once above here, the target would be 12568/3734 and 12900/3900.

Short term existisng long positions may hold as long as above 11677/3556. STerm traders may desist from initiating fresh longs below here. Medium term traders can buy on declines upto 11310/3457.  Things would go awry for the bulls, only on a close below 11100/3375.

Friday close would portray much clear picture ahead.  Watchout for the weekly outlook. 

You can also have a look at yesterday's outlook.

U.S. PREMARKET: 06MAY 2009

U.S. markets trended sideways, but not with negative tendency, as shown in 15min charts below.  It is on our expected lines.  Yet, a doji formation on daily charts, accompanied by higher than average volume could be a cause of concern.  But candlestick patterns always need confirmation on the following day.  Therefore, if there is a large red candle today, only then the bulls would rethink of expecting higher level. But the favoured view is that this consolidation could be a halt before the markets forge ahead towards higher levels.  

(Please click on charts to enlarge)

Our outlook for the day remains the same as of yesterday. Please click here to view that.

Disclaimer:This is not an invitation to trade in the markets.  Use your own discretion as it involves the risk of financial loss for which this blog would not be held responsible.

Charts: Quote.com

U.K. FTSE100 PREMARKET: 06MAY2009

(Please click on the chart to enlarge)

FTSE100

Found resistance at 4375 and started drifting lower.  It is poised at its immediate term support 4312.  Short term traders should desist from initiating fresh longs if closes below here, though the bulls are still very much in control.  There could be a consolidation between 4200 and 4400, but it is still a buy on decline market in the medium term.

Medium and short term traders can look for reversals from 4293 and 4273 also.

Short term uptrend would be threatened only if gives a close below 4210.  Medium term trend is up and the targets upto 4450 and 4600 are intact. 

INDIA: PREMARKET OUTLOOK: 6MAY 2009

(Please click on chart to enlarge)

NIFTY

Is there more steam left in the markets?  The sentiment suggests so.  But for the moment it has found resistance at 3680.  In other words, the chart pattern suggests that it could trend sideways with positive bias for a few more days.  But a move above current levels would take it towards 3900 in the days ahead. 

Existing short term long positions may hold with stop at 3555.  No fresh short term long positions below this mark on closing basis.  Medium term traders can buy on declines around 3517 and 3478 with the second support being as stop loss mark.

Immediate resistance remains in the 3700 area.

SENSEX

Similarly, the SENSEX  also has one more target at 12900 to be achieved.  But the index has found resistance at 12200 zone.  The chart pattern suggest a sideways mode in the offing.  But the sentiment is still upbeat. At the same time, a correction is also due in Indian marikets and RSI is pointing towards that.  To sum it up, there could be one more upsurge after little consolidation at current levels before a correction takes place.

Existing short term long positions may hold until support 11725.  Desist from initiating fresh longs on a close below here.  However, the medium term traders can buy around 11725 and 11434 with second support as stoploss on closing basis.

Disclaimer: It is not an invitation to trade in the markets.  Use your own discretion as it also involves financial losses.

U.S. MARKETS TODAY: 05MAY 2009

(Please click on chart to enlarge)

DOW (8427)

Short Term(ST) is up and Medium Term(MT) trend is also up. ST traders may hold the existing longs with stoploss at 8300. ST traders may initiate fresh long positions on declines upto 8310 with stop loss at 8300 on closing basis. ST traders may desist from initiating fresh longs below this stoploss mark. Traders with risk capacity may buy below here for very short term gains with stop at 8190.

Immediate resistance and target is 8524. Book some profit around this level. Once above here then the next medium term target would be 9000+.

************

(Please click on chart to enlarge)

S&P500 (907.24):

Trading volume on this index has been above average though no fireworks there. ST trend and MT trend is up obviously. It moved past our given crucial resistance at 900. It implies that this index should move towards 1040 in the medium term. But given the overall picture, a sideways trend with positive bias may ensue over the next days until below 960.

ST traders may hold their existing longs with stooploss at 892. ST traders may also initiate fresh long positions until this mark is holding on closing basis. Desist from initiating fresh longs below here. Traders with risk appetite could buy around 887 and 882 with strict stop at 875.

Immediate resistance and target is 944 and then 960.

The last hour trading yesterday suggests that profitable and weak short positions are being squared off. The overall picture is signalling that there is no fresh buying for value. However, the trend is up and trend is freind. Bears would not dare to venture out so soon. All the indexes have left behind multiple support which do not seem to be taken out soon. Favored view is that the DOW may stay sideways above 7800, if the sentiment is negative, because the long term view still is negative.

CBOE Volatility index (VIX) cooling down suggests that the bulls are at the controls in the medium term. It is only the short term traders who should always remain vigilant in such situations.

(The disclaimer applies: It is not an invitation to trade in the markets. Use your own discretion as the risk of losing money is involved).

Charts : Quote.com

WEEKLY OUTLOOK: 27APR TO 01MAY 2009

FUNDAMENTALLY

The much awaited “stress test methodology” has gone by without any flutter and now the “stress test results” would be published on April 4th. But perhaps that would also pass by like that because the market players seem to have already put the financial sector in the list of unreliable and discreet sector.

Therefore, now the focus would be shifting towards consumer spending, GDP and unemployment in the days ahead. All this data is listed for next week. The article on Yahoo would make a good reading for this purpose.
(Also see the Economic Calendar at the bottom of this page)

TECHNICALLY

Overall, the bulls and the bears are in a tug of war to pull the markets in their favour. Indexes are poised at a crucial juncture and the outlook for next week is unclear. But the rule of thumb demands that we stay with the trend –and the Medium trend is up. Even if you are circumspect about going long, it would be too soon to go for medium term short positions at current levels though the intraday rules are different.

Asian markets have soared in such a way that they could be charting corrective three waves down in the days ahead. But this correction would be a healthier sign if crucial supports are not breached. Japan, China and Hong Kong seem to have started their correction but Indian markets are still not relenting.

Western markets have still to catch up with the Asian markets in terms of percentage gains from March lows. But the DOW is so confused that it looks like forming a rounding top (bearish pattern) unless there is a leg of sharp move up from current levels. The big up move on FTSE100 last Friday was not accompanied by so lucrative volumes, and that is not a healthy sign.

All this above implies that there is still a cautious optimism and very rightly so, because it is just a bear market rally. It may be borne in mind that any big rally would not be taken as a sign of end of a bear market. But the magnitude of correction after this rally would determine if we are out of the woods or not. A standard correction of maximum 50% would be a healthier sign.


U.S DOW (8076)
Short term caution; Medium term positive.

Here also the trading volume was not encouraging over the last three sessions. Momentum indicators and oscillators are giving mixed signals. Like all other markets this market is also gyrating on the strength of triggers only but no signs of value buying or participation of smart money.

Resistances at 8191 and 8400 are of low to medium strength. But the resistance at 8524 is of formidable nature which requires being shattered to achieve the targets of 9000 to 9100.
Supports for the week are 8000 and 7920. No short term long positions be initiated below 8000. Medium term support remains at 7800 though the picture turns overtly negative only on a close below 7500.


US. S&P500 (866)
Short term positive but caution required; Medium term positive

This index has been lending lot of moral support to the U.S. markets during this uptrend. Its trading volume is comparatively better and the momentum indicators are also not in a mood to give in. But oscillators have started to crossover which is a negative. So, here we have slightly better position but with mixed signals.

The crucial resistance for this index is poised at 900. A close above here would be very positive (signal to the DOW also) and then it would be headed towards 970.
Support at 840 is crucial in the short term. Short term traders may desist from initiating fresh longs below this level. Medium term stop loss mark is 795. But things turn murky below 740 only.


U.K. FTSE100 (4156)
Short & Medium term: Not Clear

As said earlier that this index made big gains on Friday but without any fireworks on the volume side. Rather the volume has been tepid since its rise from March lows. It implies that the market players are not taking its rise seriously so far. However, the Friday close at its highest point of the day makes a point of attraction for this market in near term.

Immediate resistance at 4212 is a major impediment which needs to be surpassed. A close above here would be very positive and then this index would be headed towards 4475 in the medium term. Another resistance of medium strength is 4334 on the way.
Supports are at 4049, 4016 and 3982. No fresh short-term longs below the first support. But the medium-term uptrend loses momentum only on a close below 3895.


INDIA SENSEX (11329)
Short term is sideways with positive bias ; Medium term positive.

It gave a close above its 200DMA after about 11 months. RSI on daily chart is re-entering overbought zone and weekly one is also looking forward to do that. But some oscillators are signaling caution ahead. Another possible signal of bulls losing steam is that the rise on Friday happened with lower trading volume. Still the guns seem to be loaded in favour of the bulls as medium term is very positive. Short term requires cautious optimism. High volatility and selling pressure at higher levels is expected next week in view of the F&O expiry.
This index respected its support at 10650 and now intending to move towards its medium term target of 12500. But the speed with which this has been happening demands vigil at current to higher levels.

Resistance for the week is at 11367 and then 11600 to 11800 aband. Inability to surpass this band would be a signal to brace for a correction.

Immediate supports are at 11115, 10960 and then 10650. Short term traders desist from initiating fresh longs below 10650. Crucial medium term support is at 10098. But the uptrend loses momentum only on a fall below 9700.


INDIA NIFTY (3481)
Short Term is sideways with positive bias; Medium Term positive.

It being main derivative index, there could be bouts of high volatility next week in view of F&O expiry on Thursday. High PCR (put call ratio) implies that there are a lot of short positions in the market. These short positions are helpful in arresting sharp declines as shorts are covered. In other words, even though the markets look overheated these short positions would help hold the markets above crucial support levels in the event of decline.

Resistance levels for this index are 3511, 3550 and then 3635. A move above 3680 would be required to target 3900 levels. But remain vigilant as short term correction can ensue anytime from below 3550-3635 zone.
Support at 3416 and 3371 would be crucial in immediate term. No Short Term buying below 3371. But the Medium term traders can buy up to 3250 with stop loss at 3235. The uptrend loses momentum on a close below 3170.


HONG KONG HANGSENG (15259)
Short term sideways with negative bias; Medium term positive

This index breached all our given supports of last week. It has caused some weakness in the short term as the momentum indicators and oscillators are pointing down again. Weekly RSI is also showing negative divergence. This index could also be charting its three wave down correction just like its Asian compatriots here. For medium term trader this is not a negative sign unless the magnitude of correction is high.

Resistances are at 15404, 15539 and 15977. A move above 15539 would be positive but there could also be reversal down from this level. Target above this resistance would be 16124 and above.
Support at 15035 is immediate term support. A close below here could drag to 14695. Crucial medium term support would be at 14200 which needs to hold to keep the uptrend intact.


CHINA SHANGHAI COMPOSITE (2449)
Short Term sideways with negative bias; Medium Term positive

This index seems to have completed its five wave up move and now could be charting a three wave correction to the up move from its October low at 1665. If it is so then the magnitude of correction would have to be seen in terms of price and time.
Daily momentum indicators are signaling impending weakness in the short term. Weekly ones are also diverging negatively. In the given scenario it would be prudent ot avoid long positions for short to medium term.

Immediate resistance is at 2501, 2520 and then 2580. A move above 2580 is needed to target 2725 and 2950. It would do to remain on the sidelines until above 2580 or wait for a decline to buy at short to medium term supports.
Supports for short term are at 2370 and 2300. Medium term support at 2244 would be crucial to maintain the uptrend.


JAPAN NIKKEI225 (8708)
Short term sideways with negative bias ; Medium term positive but be vigilant.

This index is moving sideways with negative bias over the last few days. Momentum indicators are pointing down. Noticeable thing is that its volume average has been rising irrespective of decline or rise in the market. This development demands caution as it could be in for some big move on either side in short to long term. Otherwise there is no sign of any significant weakness in the medium term.

Resistances are at 8912, 8942 and 8972. Failure to move above 8912 soon could pull this index down once again. To maintain the uptrend it needs to move past 9070. Avoid fresh longs until above this resistance.
Support at 8600 is crucial in the near term. A fall below here signals more weakness in the offing. Next support would be at 8462. Medium term loses momentum only on a close below 8285.

WEEKLY OUTLOOK: 20APR TO 24APR 2009

(Markets from East to West)

JAPAN NIKKEI225 (8908)

This index moved sideways but found support at our given mark 8694. This sideways move could be a halt before another leg up towards the target 9800.

This market is also a buy on declines. Supports are at 8693, 8577 and 8460. Short term traders may not initiate fresh longs on a close below 8577. However, the medium term turns negative only on a close below 8300.

CHINA SHANGHAI (2504)

Defying the negative divergence of its momentum indicators, this index has been moving up slowly and steadily. Finally it has moved convincingly above our given resistance band 2460-2475 and made intraweek peak at 2549. Reaching up to this mark has technical significance as it has recovered more than 38.2% of its down move from May 2008 peak at 3786. This could also be construed as having formed its bottom for the current year.

Now the next mark to be watched is at 2725. A move above this level would be yet another confirmation of its bottom formation. However, it would be too soon to declare it as a resumption of bull market because there are much higher levels to be surpassed before that.

Outlook for the week ahead is sideways to neutral.

Resistances are at 2549 and 2726. A close above 2726 would target 2975.

Needless to say, this market is also a buy on declines. Supports for the week are at 2466, 2440 and 2414. Short term traders may avoid fresh longs below 2440. The uptrend loses momentum only on a move below 2300.

HONGKONG HANGSENG (15601)

This index moved robustly past our given resistance zone 15764-15781, but failed to close above here. The daily charts are suggesting reversal pattern, implying that there is lesser confidence in its moving higher for the moment. But the momentum indicators are not pointing towards any cooling off immediately. Therefore, the best scenario next week would be a sideways trend with lesser conviction to move higher soon.

The only resistance visible is at 15977. Once past here then it would be headed towards its 200dma at 16480. It would also be advisable to remain vigilant at current levels because the first leg of the uptrend from March lows could be nearing its end anytime soon.

Supports would be at 15327, 15126 and 14925. Desist from initiating fresh longs for the short term, if below 15126.

INDIA SENSEX (11023)

Intraday deep corrections were grabbed by the bulls as if some life time opportunity to get into the markets. But a reversal pattern on Thursday and late hour profit booking on Friday signals to observe constraint. Although there are no negative signals from the momentum indicators and oscillators, the rise from March lows could be concluding its one leg up at the current levels.

The envisaged scenario is a movement between a range of 9500 and 11700 over the next four weeks before it takes its future course. But odds are in favor of the bulls and the projected target of this corrective uptrend is 12500. This viewpoint is negated only on a close below 9500.

Outlook for the week ahead is unclear. Resistances are at 11171, 11367. Move above the second resistance would be very positive and could take up to 11640 or 11820. But remain very vigilant if starts moving up from current levels immediately.

There are multiple supports up to the level of 9500. It is also a buy on declines market. Supports at 10900 and 10770 could be utilized to initiate fresh long positions. Stop loss for long positions would be the support at 10660. Support below here would be at 10225.

INDIA NIFTY (3384)

Its 50dma and 100dma have converged and the index has given a close above its 200dma. These are very positive signs. Its huge derivative participation could have helped it to achieve these benchmarks but the SENSEX has yet to move above its 200dma. In other words, the mixed signals point towards constraint at current levels.

The envisaged scenario here would also be a movement between the levels of 3100 and 3700 over the next four weeks. Needless to say, the odds are in favor of the bulls and the projected target for this uptrend is 3900 to 4050 over the medium term. At the same time it should also be borne in mind that this could also be the highest target in this calendar year because there is no confirmation of the end of the prevailing bear market and the Indian markets also could be charting a bear market rally. Favored view is that we are still charting a bear market rally (corrective ‘B’ wave as per the Elliot wave theory).

Resistances are at 3511, 3550 and then at 3680.

Supports are at 3300, 3237 and 3172. Very short term traders may desist from initiating fresh longs below 3300. Medium term traders can buy up to the levels of 3237 with stop at 3170.

U.K. FTSE100 (4092)

The move above our given resistance band 4070-4085 is positive but closing only just above this zone is not a very convincing breakout. The current level is its 100dma (100 days moving average) area and this index has made two unsuccessful attempts earlier also in Jan and Feb to move convincingly past this dma. So, the short term traders need to be vigilant in this zone.

The outlook for the week ahead is not clear. A sideways move within a narrow range could be expected. There are not many negative signals to pull it down soon.

If it manages to move past the current level with strength then hope for the test of its 200dma around 4500 in the days ahead. Resistances on the way would be 4138 and 4212.

Supports are at 4023, 3995 and 3966. Short term traders may desist from initiating fresh longs below its first support. Yet, the uptrend would lose momentum only on a close below 3966.

U.S. DOW (8131)

It made an intraweek peak at 8191 but trended lower to close below our given crucial resistance at 8152 on Friday. Indecision prevails with confidence waning, somewhat. Perhaps, the markets could still be figuring out those -“better than expected?”- results declared by the financial companies last week! Besides that, the Economic data still weighs heavy on the minds of the market players.

Outlook is not clear for the week ahead. A sideways move that does not breach 7800 would not be a negative. But the prevailing momentum could get neutralized below 7800. Watch out!

Resistances for the week are at 8191 and then 8524. Closing above the first resistance would be a very positive signal and the target of 9000 would come into the reckoning.

There are multiple supports up to 7800 and short term buying could be considered at 8068, 7992 with stop at 7800. Medium term is positive as long as above 7530.

WEEKLY OUTLOOK: 13APR TO 17APR 2009

(Please click on chart to enlarge)

All charts' source: Quote.com

U.S. DOW (8083)

This index has been closing above its 50dma for the last three weeks but failed to close past our given resistance at 8088. After hitting this resistance it is now halting just below that. The momentum looks strong enough to surpass this hurdle soon.

VIX (CBOE Volatility Index) has moved down to 36 levels but the earnings season can cause intraday high volatility. Momentum Indicators are not portraying a clear picture. But it seems that most of the bad news has been factored into the markets already because only the positive news of even lesser significance is causing bears to take shelter.

Resistances for the week are at 8088, 8132 and 8524. Failure to move above 8132 has the potential to pull it down once again. But a close above this level would target 9000 in the short term.

Supports are at 7762, 7685 and 7470. Short term bulls may exit below 7685. Medium term support below 7470 would be at 7278 which has to hold so as to maintain the uptrend.
*******

U.K. FTSE (3984)

This index was not able to give a close above 4070 though it made attempts over the last two weeks to do so. Its 50dma also lies in this zone. So, if it gives a close above 4070-4085 zone then it could be headed towards 4300 to 4600 levels.

Momentum Indicators are pointing positively. The other solace is in the fact that its down trend last week was accompanied by low trading volume. But it now needs to surge past with large volume to display some strength. Otherwise, this is the weakest market among the lot here.

Resistances for the week ahead are at 4000, 4070-4085 zone. A close above this zone would target 4212 and then 4334.

Supports would be at 3930, 3879 and 3799. Short term traders may avoid fresh longs below 3799.

Though seems unlikely so soon, if it breaches 3719 on the downside, would imply more pain in the offing for this index.
*******

INDIA NIFTY (3342)

This index is the darling of derivative traders. The trading volume has increased manifold suddenly as market players start gathering courage. But the things are happening too fast here and that demands caution now. A correction looks imminent as it formed a doji on its daily charts. Also that the RSI is in overbought zone and there is negative divergence in ROC.

Resistance zone is 3440-3451. If manages to close above here then the next target would be 3734. Even the target of 3900 would also come into the reckoning, if above 3451.

Supports would be at 3233, 3181 and 3129. Short term traders may avoid initiating fresh longs below 3181. But the medium term turns overtly negative only on a close below 2850.
*******

INDIA SENSEX (10804)

There was no let up in the gusto though the momentum indicators are now signaling that its time to cool down a bit. Overall, this market is strongest among the lot here in the current situation. But it reversed from 10929 –tad above our given resistance 10924 of last week. It implies that it might enter into a short term correction mode anytime soon.

(We have Infosys results coming on Wednesday, which would determine the course for the week ahead. Currently at 1426, Infosys is experiencing stiff resistance from 1450 level).

Resistance for SENSEX is at 10929-10954 band. A move above this band would target 11375 and then 11639.

Supports are at 10391, 10225 and 10060. Short term traders may avoid fresh long positions below 10225. Medium term turns negative only on a close below 9488.
*******

HONGKONG HANGSENG (14901)

Here also the momentum indicators are giving mixed signals.

Resistances are at 15147, 15525 and then 15764-15781 band. A move above this band would make attempts towards its 200dma at 16480.

Supports would be at 14484, 14279 and 14076. Avoid fresh longs below 14279.
*******

CHINA SHANGHAI (2444)

In an effort to somehow move above 2460, this index seems to have started losing momentum. The zone from 2460 to 2475 is proving to be formidable resistance as it got repulsed from 2457. Yet, this is its short term outlook only and the medium term is still very positive.

Resistance zone is 2460-2475. A move above here would bring the targets of 2726 and 2976 into the reckoning.

Supports would be at 2297, 2240 and 2197. Short term traders may desist from initiating fresh longs below 2240. However, the things turn overtly negative only on a close below 2037.

*******

JAPAN NIKKEI (8964)

Profit booking on Friday accompanied by good volume could be a cause of concern in the near term. But the technical outlook has not turned negative for this index in short to medium term yet. However, we should always be prepared for short term corrections during such gusto in the markets.

Resistances are at 9069, 9325 and 9520. Area of 9500-9600 is a formidable resistance zone. If it manages to close above this zone then the next target of 10000 would come into the reckoning.

Supports are at 8694, 8578 and 8463. Short term traders may not initiate fresh longs below 8578. But this index turns negative only below its medium term support at 8088.

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