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