STOCKS WEEKLY GLOBAL OUTLOOK AND STRATEGY

Update: 21JUN 2009

2009-06-21T11:00:00.002+05:30

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

2009-05-14T07:09:00.007+05:30

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

2009-05-10T21:48:00.002+05:30

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

2009-05-10T15:24:00.005+05:30

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

2009-05-10T11:27:00.003+05:30

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

2009-05-09T16:09:00.004+05:30

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

2009-05-08T15:50:00.002+05:30

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

2009-05-08T10:59:00.003+05:30

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

2009-05-08T08:04:00.003+05:30

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

2009-05-07T15:31:00.004+05:30

(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

2009-05-07T12:34:00.004+05:30

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

2009-05-07T11:23:00.003+05:30

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

2009-05-07T07:43:00.002+05:30

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

2009-05-06T14:47:00.004+05:30

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

2009-05-06T11:24:00.002+05:30

(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

2009-05-06T07:36:00.004+05:30

(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

2009-05-05T15:23:00.007+05:30

(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

2009-04-26T19:27:00.004+05:30

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

2009-04-19T18:51:00.006+05:30

(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

2009-04-12T16:28:00.015+05:30

(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.

*******

WEEKLY OUTLOOK: 06APR TO 10APR 2009

2009-04-05T18:07:00.005+05:30

The markets didn't react very negatively to continuously rising unemployment data last Friday but it is certainly going to remain in the minds of the bulls. The rising concern of unemployment could subdue the mood to some extent next week, but the bulls are not going to relent so soon now.

Technically, almost all the indices are charting their fifth wave(final wave) of this recent uptrend. This fifth wave can either get extended if the nearest resistances are breached, otherwise a sideways trend could continue from the current levels for a few more days.

Momentum indicators on weekly charts of many markets have entered into the positive zone after a very prolonged period. Volatility indexes are showing signs of exhaustion and cooling off. All of these are very positive signs for the markets in short to medium term.
Please also see the detailed outlook on CBOE Volatility Index(VIX) in the post of Saturday, below.

RESISTANCE AND SUPPORT LEVELS
(East to West)
(Only the crucial support and resistances are given for this week. Any significant view point, if arises would be given in the updates.)

JAPAN NIKKEI (8750)
Resistances are at 9008, 9325(short term longs book profits here), 9521 and 9630
Supports are at 8485, 8390 and then 7950-7800 strong support zone.

CHINA SHANGHAI(2420)
Resistances are at 2475, 2523(Book short term profit here) and 2726.
Supports at 2293 and 2200-2240 band is strong support zone.

HONGKONG HANGSENG (14546)
Resistances are at 15525 and then at 15764-15780 zone.
Supports are at 14029 and then 13000-13100 band is a strong support zone.

INDIA SENSEX (10349)
Resistances are at 10470, 10571 and then 10924.
Supports are at 9977, 9834 and 9650.

INDIA NIFTY (3211)
Resistances are at 3229-3241 zone; but a move above 3287 can take to 3450 also.
Supports are at 3095, 2999 and 2884.

U.K. FTSE100 (4030)
Resistances are at 4138, 4185 and 4211. Book partial profits at 4185.
Support around 3950 should prove to be a strong support. Stop loss for long positions is 3800.

U.S. DOW (8018)
Resistances remain at 8088, 8132 and 8406.
Supports are at 7757, 7682, and 7560-7438 zone. Stop loss for long positions is 7270.

SATURDAY 04APR 2009

2009-04-04T12:50:00.009+05:30

(Please click on chart to enlarge)

VIX IN FOCUS

CBOE Volatility Index (VIX) currently at 39.70, has come into focus of the traders. Volatility cooling down is a very good sign for the markets. The pattern in the chart suggests that this index has almost breached its triangular pattern which is a very positive sign. If there is a move further down, say a close below 39 (and more so below 36) would keep the U.S. markets in high spirits. It is also a bellwether index for the world markets. Most of the technical traders world over watch it closely.

Analysts are of varying views about its levels. Some suggest that its moving below 35 would suggest a return to primary uptrend. But that would be too optimistic. The favoured view would be a touch of 20 to confirm the market bottom for 2009.

The breakout gives a down target of 20 over the next 3-6 months. But it may not be taken seriously because given the outlook for the equity markets over the next few months it would be difficult for this index to touch that level. Yet, we should take solace in the fact that its trading around 30 to 40 levels also would be very positive for the bulls.

Whatsoever, this index raises hopes in near to short term, at least suggesting that the markets are a buy on decline with adequate stop losses.
Medium term investing can be considered in the U.S. markets on its decline below 39 to 36 mark.

WEEKLY OUTLOOK: 23MAR TO 03APR 2009

2009-03-29T15:02:00.005+05:30

FUNDAMENTALLY

Communism went bust long time ago because it made everybody poor equally, while their big comrades were busy using gold to decorate their toilets. But Capitalism should not be equated with that in terms of the ills of an ideology. People in general have enjoyed the fruits of abundance, just because of the success of free market economy. Yet, the capitalists became so arrogant with the ideology that they failed to recognize the consequences of an ‘unregulated’ free market economy that led to insatiable greed. The leaders are still groping in the dark and going to meet in London next week in the name of G20.

This summit could add a little to the already positive sentiment in the short term. But it can not come out with any quick fix immediately except for the long term. Still, the current sentiment is as such, that the markets are picking up only the positive triggers and overlooking the negatives.

However, the forthcoming economic data has not negated its negative outlook so far. The U.S. unemployment data is slated for Friday next week. Watch out!

WORLD MARKETS TECHNICALLY

Profit booking on last Friday happened amid low volumes, if compared with other days of rising markets. It means that the bulls are still hopeful of riding the tide higher in this ‘bear market rally’. Bears might not dare to initiate large-scale fresh shorts for the time being. But a correction to the recent gains is also due any time soon.

The feeling is that this negativity had crossed the limits and the bears must have developed cold feet in holding their short positions for such an overstretched period of indecision and unclear near term. At the same time, some divergent signs have also appeared in momentum and strength between Western and Asian markets. Chart patterns and Momentum Indicators of European markets are not as encouraging as those of the Asian; though the U.S. markets indicators are slightly better than the European.

So, in the days ahead, every market could be charting its own way, independent of each other and not following the DOW as strictly as they had been over the last one year or so. Asian markets are showing signs of having placed a “medium term” trough for themselves. But not to forget that this rally is just a counter trend to the ongoing downtrend and the long term picture has not ruled out those much lower targets in months ahead. So, enjoy the rally with a view that we are not out of the woods yet!

The outlook below is for educational purpose of the short to medium term ‘traders’ and not the ‘investors’! The current rally so far, can only be called a traders’ rally because there are no significant signs of value buying by long term investors in recent time. The bigger action is taking place in derivatives segment instead –implying that its traders’ doing mainly.

U.S. DOW (7776)

It formed peak at 7931 last week. This mark becomes its immediate resistance now. But its crucial resistance is at 8088. A move past here is required to play long safely for short to medium term. Then this index would have a target of 9000 in short to medium term, though with intermittent reversals caused by some resistances on the way up.

The index is halting tad below our 7780 mark mentioned last week, but it is not a negative sign.

Its 50dma at 7600 should lend support next week. Supports below here are at 7373 and 7200. Short to medium term traders could buy on declines near these levels with 7200 support remaining as final stop loss. No fresh longs on a close below here. But the Bears would restart their innings in full swing only if it breaches 7000, which looks quite unlikely in the near term.

U.K. FTSE100 (3899)

The rally was not as sharp as in the Asian markets. It meandered almost sideways over the last week. Immediate resistance is at 3960 but the hurdle at 4001 is proving to be formidable. Then further, a close above 4069 is needed to continue this current uptrend.

On the other hand, supports are at 3789, 3720 and 3664. A close below 3720 would be a signal for bulls to desist from initiating fresh long positions; and further a breach of 3664 would be a restart of Bear innings.

This index is not showing any strength of its own according to the chart patterns, oscillators and indicators. It needs very positive triggers to move up. The world market trend or the outcome of G20 meeting next week could perhaps, lend some support to the European markets. The favoured view would be to wait for a clear trend to emerge when it breaches either 4001/4069 on upside or 3720/3664 on the downside.

JAPAN NIKKEI (8627)

Three weeks ago, the market players had lost all hopes as this index was at the edge of an abyss to plunge below 7000 mark. But it did a volte-face from that point and rallied to gain handsomely. Now it is a ‘buy on decline’ market in short term to medium term. There are no significant resistances on the upside from current levels up to 9325.

On the other hand, it has left behind some gaps with high volumes. So, it could perhaps decline anytime to fill the gap around 8200 levels. Supports would be at 8200 and 8147. Buy near these levels. But desist from initiating fresh longs below 8147. Its 50dma at 7785 would also lend strong support on declines. So, this mark would be the final stop loss for short to medium term long positions.

CHINA SHANGHAI (2374)

This index has been in strong uptrend since November last. But there was no remarkable up move last week. It is facing stiff resistance from 2400 level. The indecision of Friday could also turn out to be an evening star pattern, a bearish formation, signaling downtrend besides a double top. So, it is poised at a crucial point from where it has either to move up soon to come out of its long term downtrend or restart another short to medium term downtrend again. A weak start on Monday would be negative.

But a close above 2400 would be positive, though it needs to give a close above 2450 to confirm that the low of 1665 on Oct 28 is its point of recovery for the medium term. But it may also not be construed as a long term recovery until much higher levels are breached. Yet, a close above 2450 would be a very good sign for the bulls.

On the other hand, there are multiple supports on the downside. The supports at 2300 and 2200 levels could be used for medium term buying levels on declines. Final stop loss for medium term long positions would be 2035.

HONGKONG HANGSENG (14120)

This index has also closed just above our given mark 14100 last week. Some more room is left for the bulls here also. It is also a buy on decline market for the short term. It could be headed up towards 15800 levels in the days ahead.

Immediate supports are at 13528 and 13350. It has also left behind a gap at 13400 levels which could be filled any time. Short to medium term traders can buy near these levels. Stop loss would be at 12800.

INDIA BSE SENSEX (10048)

The story is not different here either, though the indecision on Friday was not encouraging in immediate terms. On the upside, if there is a move above 10470 then the targets of 11000 and 11500 would come into the reckoning. But be watchful near 10470 area because a reversal from the zone below 11000 has a potential to trend down up to 8000 levels again. Short term traders can get knocked off in such reversals if they are not in a position to hold their long positions for a little longer time.

Still, it is also a buy on decline market in the short to medium term. It has multiple supports up to 9000 levels. The area around 9700mark and 9400mark would lend strong supports in the event of decline in the short term. Buy on declines near these levels. But avoid initiating fresh longs below 9365. Stop loss for long positions would be 9300 for short term traders while the medium term traders can place a stop at 8867.

INDIA NIFTY (3109)

Similar to Sensex, this index also faces resistance above 3150. So be watchful until it moves past 3200-3240 zone. If it manages to breach past this zone then stay long for targets up to 3500. But a reversal from the zone mentioned above has also the potential to touch 2500 levels again.

On the downside, 3000, 2900 and 2800 should lend support on declines. Buy near these levels with final stop at 2790.

STOCKS TECHNICALLY

RIL(1548)

Reliance Industries successfully surged past its medium term outer limit at 1500. Now higher targets could be 1650 to 1800 in short to medium term. Resistance at 1650 should be watched carefully.

Buy on declines up to 1400 with stop loss at 1380. Medium term traders can hold up to the support 1330.

INFOSYS(1346)

This stock also moved past its resistance at 1320. The next resistance is in 1400 area. Hold with stop loss at 1300.

SBI(1125)

State Bank of India surprised all the bears and surged ahead robustly. Hold with stop loss at 1050. It could move higher to 1170 and then 1250.

WEEKLY OUTLOOK: 23MAR TO 27MAR 2009

2009-03-22T11:20:00.016+05:30

FUNDAMENTALLY
(Fundamental view point below could be more relevant to the medium and the long term but perhaps, may not get reflected in the short term trend immediately).

The talk of inflation/deflation would add to the already dampened spirits by rising unemployment and declining consumer confidence.
Therefore the focus should remain on the economic data as usual. There is some important U.S. economic data listed for next Thursday and Friday. (A new version of calendar is added below. It also includes calendar for Japan, U.K. and European Union besides the U.S.).

The run up to G20 was out of sight and out of mind last week but the talks may hot up as the date approaches near. Some investors and traders may also be gearing up for the quarterly earnings next month, which would be of great significance this time. In the meantime, the U.S. treasury plan to come out with details of rescue plan could be an important event next week.

However, the "non-fundamentalist" market players could also make themselves familiar with these two words : Qantitative Easing and MTM. These two words are making rounds in the policy lanes these days.

WEEKEND READING
1. Bank Rescue Plan: Details Soon

2. Here Comes the Great Recession

3. Sentiment Overview for Week Ending March20

GOLD ($952.6)
After dipping far below 900, it did a volte-face from 985 and climbed well above into positive territory. This happened due to sudden dip in the USD. Although, it could have caused a considerable heartburn among the short term traders, it has once again become a call of buy on decline. short term traders can initiate fresh longs on decline for targets of 1000, with stop loss at 913. Stop loss for medium term traders would at 860.

SILVER ($13.73)
Silver also behaved similarly because USD and commodity offset each other.
Now it is also a buy on decline for target of 14.55 with stop loss at 11.94 for short term traders. Medium term traders can hold with stop loss at 10.84.

TECHNICALLY INDICES
(In Order of East to West)
There are mixed signals for the short term though, some of the indices have left gaps open during the uptrend last week. The markets could trend lower to fill these gaps. But medium to long term are still negative and any short term bounce caused by triggers may not be taken as a sign of recovery unless some resistances far above are surpassed.

However, for very long term stock investors, there is an analysis of interest which must be given a reading with caution. It is a U.S. specific article but any sign of recovery there would be taken with open arms around the world. But the favoured view would be that any recovery would not be so immediate or start galloping next week or even next quarter onwards. More consolidation within a narrow range, accompanied by short term rallies from time to time is anticipated in the long term.
The much talked about bear rally could emerge on the horizon only when those higher levels given in the outlook below would be taken out. But these higher levels do not seem to be in a mood to be taken out soon unless the sentiment improves or the bottom of the pit is visible (the worst news also causes recovery, howsoever prolonged!). Until then!!!
China Shanghai Index could be watched closely this week!

JAPAN NIKKEI (7946)
This index displayed great strength as a morning star formation on march 10th could have given some encouragement to the traders to go gung ho about it. But in that jubilation, has left gaps behind it. Momentum indicators(MIs) are fairly well into the positive territory and pointing up but the index could trend lower to fill the gaps. Supports would be at 7660, 7538 and 7416. A bounce from 7538 would be positive while a close below 7416 would threaten its recent low of 7021. It needs to give a close above 8271 to turn things positive for itself.

CHINA SHANGHAI (2281)
This index is likely to continue its uptrend though, it would have to be seen if it can surge past its recent high at 2403. A move above here would be very positive signal for the whole trading fraternity around the world. Even now it is halting at its 200dma and a breach past this dma would also be a noticeable event. 100dma and 50dma have already converged and turning upwards while 200dma is also closeby intending to converge with these two moving averages. All these are signs of recovery, if seen technically but yet to be confirmed and believed amid this mayhem fundamentally.
A firm close above 2450 would be a technical confirmation of having put in place a medium term(long term?) bottom for itself. It would be worth watching this market over the next couple of weeks!!
On the other hand, a close below 2166 would be an alarmbell for long positions. Support at 2100 levels would have to play its crucial role to keep this index in uptrend while a close below 2037 starts another downtrend.

HONGKONG HANGSENG (12834)
Chart patterns suggest its inability to breach the resistances ahead. Next week's move could decide the trend in the short term. Supports are at 12507, 12286 and 12064. A rebound from 12286 would be a positive signal while a breach of 12064 would be a signal of threat to the recent low at 11345.
On the upside, if manages to close above 13563 then it would be a positive signal but it needs to give a close above 14100 to turn things positive for itself.

INDIA BSE SENSEX (8967)
As per our expectation, this index could not close above the given band of 9100-9200 and reversed lower. However, it is still trading within a very narrow band near this level indecisively. There are indications of more cuts in the interest rate also, if required. Yet, it could imbibe the world trend until election results on May 16th.
A move above 9200, though less likely, could take it to 9500 and signal a tendency to remain buoyant for some more time. But the favoured view is that it may trend lower after having respected the 9100-9200 band last week. Supports are at 8700, 8584 and 8457. A bounce from 8584 would be positive while a close below 8457 would threaten its recent low at 8047.
It would not be needless to remind that the medium and long term trend in this market is down. Only a close above 10500 mitigates negative outlook and that too for medium term only! Next week's candle formation could give a better picture, perhaps! So far, the near term trend is unclear.

INDIA NIFTY (2807)
Nifty did give the weekly close above our mark of 2805, but a lackluster one. It kept struggling with this level the whole week, almost. In the given scenario, it will not be prudent to expect the continuation of uptrend except if, it moves above 2836 or even above 2820 robustly! Otherwise, it is likely to take a cue from BSE SENSEX and trend lower.
Supports are at 2720, 2687 and 2652. A rebound from 2687 would be positive while a close below 2652 would threaten the recent low at 2539.
Noteworthy point in this index is that it has not breached its Nov 20th trough of 2503 so far while the sensex has breached its own two weeks ago.
Near term picture is not clear and next week's move could help to determine the short term trend in this market. But medium to long term trend is definitely down. Medium term trend would get positive on a close above 3000 only.

U.K. FTSE100 (3843)
This index respected the resistance 3925 mentioned last week though managed to reach up to 3913. Near term is unclear, yet the favoured view is a sideways move with some negative bias. Supports are at 3740, 3687 and 3634. A rebound from 3687 would be a positive signal, but a close below 3634 would threaten the recent low at 3461.
The resistance at 3925 remains, but to make things positive for this index, it needs to give a close above 4070.
Medium to Long term are negative and short term is neutral. Next week's move is awaited to identify the short term trend clearly.

U.S. DOW (7278)
It moved past our crucial mark of 7470 to signal the arrest of immediate downfall. Now, the 7500 mark would need to be watched as it has become the crucial resistance area.
Near term outlook is unclear but with some negative sentiment. Outcome of the "toxic asset plan" could have some positive impact on the sentiment but it would have to be seen for how long, because the economy is badly bruised and maimed.
Resistances for the week ahead are 7500 and then 7780. A close above 7500 would be great but it needs to give a close above 7780 to signal positivity.
Supports would be at 7151, 7021 and 6890. A rebound from 7021 would be very positive while a close below 6890 would threaten its recent low of 6470.
The favoured view is that the sentiment could improve only when economic data starts giving signs of recovery though, some intermittent bounces and even that much anticipated bear rally could be triggered by government actions from time to time.

WEEKLY OUTLOOK: 16MAR TO 20MAR 2009

2009-03-14T15:59:00.009+05:30

FUNDAMENTALLY
The focus would be on U.S. Fed's interest rate decision next Wednesday where, the arsenal has in fact, run out of ammunition completely. So, it could be just a non event for that matter unless the rates are hiked, which is highly unlikely. But there is also a host of economic data lined up for next week, as usual. Market players should focus more on this data rather than those pep up talks by the governments from time to time. Things would remain under pressure until the unemployment rates start cooling off and consumer sentiment returns and people start spending.

The run up to next G20 meeting early next month(2nd April) would also attract attention though, the outcome, howsoever positive may not have any short term impact on the markets. But a negative outcome could certainly add heavily to the already dampened spirits! Watch out!
The focus seems to be shifting from the U.S. and more towards the European continent where there is much more to be revealed than visible economically.

WEEKEND READING
1. Sentiment in Gold, Stock and Commodity market
2. Treasury soon to offer details on toxic assets plan

Offer by the U.S. treasury to come out with details on toxic assets plan could evoke more positive response if the plan is transparent and unambiguous. It would be worth tracking this development next week.

GOLD($929.4)
Some strength in dollar has hindered the uptrend in this precious metal. Negative divergence in weekly and daily Momentum Indicators(MIs) does not bode well for gold in near to medium term. A breach of its 50dma in 900 area would be a cue to exit for short term traders. A sideways move is anticipated in the days ahead. However, its 200dma in 850 area should lend strong support in the days ahead. But medium term traders may exit below this mark.

SILVER ($13.18)
It has been holding well above its support 50dma at 12.5 and has even closed above its 200dma at 13.07. But strength in dollar could keep it in sideways mode over the next few days. Holding above 12.48 continuously over the next couple of weeks would a bullish sign. But short term traders may exit on a close below this mark and medium term traders below 11.56.

TECHNICALLY MARKETS
The downtrend has been wakened a little due to short covering all around. Some small scale buying for long term also could have taken place over the last few days. But it would be naive to think that buying interest has returned. Yet, some easing of the tense situation is surely apparent among the bulls. There are still multiple resistances ahead to be surpassed before that. Rather, it would be prudent to initiate fresh shorts near immediate resistances(with strict stop loss) for small gains as markets could remain sideways, if not trend lower below their recent lows soon. But there is no sign of forming a bottom so far even if there is a 20% rally from the current levels... because it is a primary bear market!

U.S. DOW (7224)
Dow closed above our upper boundary at 7200 mentioned last week. It is a signal of weakening downtrend in the short term. A sideways trend with some positive bias is anticipated in the near term.
Resistances above here are at 7470 and then 7780. Its 50dma is also in 7800 area. So, in the given situation it would be realistic to expect that this current up move would have maximum target around 7800 level. But a close above this level would cause more short covering and strengthening the uptrend.
On the other hand a failure to move above 7470 would be a cue to initiate fresh shorts. Supports are at 6856 and 6765. Breach of second support would threaten its recent low of 6470.

U.K. FTSE100 (3754)
Made a failed attempt to surpass 3800 level. Chart patterns do not suggest any firm conviction to surge ahead robustly. A sideways trend is envisaged in this index with some negative leanings next weak. Its crucial resistance is in the 4060 area. But a failure to close above 3925 would be a cue initiate fresh shorts. Supports are at 3638 and 3597. A close below this second support would threaten its recent low at 3461.

JAPAN NIKKEI (7569)
Respected its crucial support at 7000 and rebounded last week. A close above 7600 would help arrest the downtrend in short term. However, if fails to move above 7900 this week then it would be a signal of impending weakness. A close only above 8258 would mitigate the negative outlook in this index.
A sideways trend between 8200 and 7000 is anticipated next week. Breach on either side would determine the further trend.

CHINA SHANGHAI (2129)
Although, the uptrend seem to be loosing steam in this index, its holding above 2037 all these days could also turn out to be a bullish move in the making. 2035 and 1945 remain its crucial supports. On the other hand, a move above 2265 would be a bullish signal. Outlook is neutral to negative for the week ahead.

HONGKONG HANGSENG (12526)
A close above 13040 would signal some relief in the short term. But a close above 14086 is needed to mitigate the negative outlook in this index. A sideways trend is envisaged between 11000 and 13600 over the next few days.

INDIA BSE SENSEX (8757)
Similar to FTSE100, this index also does not suggest any firm conviction to move above its resistances nearby. At the same time it has been closing above 8500 most of the time during declines. The favoured view is that this index is a sell on rise near 9100 to 9200. In other words, it could also remain sideways between 9200 and 8000 over the next few days. Supports are at 8350 and 8047.

INDIA NIFTY (2719)
Here also the resistance at 2800 levels could be used to initiate fresh shorts with appropriate stop loss. But a close above 2805 could take it to 3000 levels in the short term. But the favoured view here also is a sideways trend over the next few days. Supports would be 2500 and 2250.

WEEKLY OUTLOOK: 09MAR TO 13MAR 2009

2009-03-07T19:17:00.017+05:30

FUNDAMENTALLY
All those "deemed to be ghost stories" of the past year are turning out to be true and everything is falling in place exactly as they were envisaged that time. The fear of bigger collapse is still looming large, but obviously not unreal. On top of that is the concern of rising unemployment as that could lead to more protectionist stance and policies etc.

Misery index of the U.S., over the last 60 years, has so far recorded the highest percentage of unemployment at 10.8 in 1982.
It started rising continuously from 7.5 in Aug 1981 and peaked in Nov-Dec of the year 1982. Then gradually, it took about two years to return back to 7.4 levels in May 1984. That was during the conditions different from the present one. This time, most of the lost jobs are not likely to be created soon in the face of businesses shutting down for good.

One interesting question, though very rightly being argued is about the authenticity of the composition of indices. Some of the so called blue chips have become penny stocks and they still are there on the measure of indices. This question surely needs some expert answers!

Now for the next week, Banks and the companies like General Motors would keep us on the tenterhooks in the near term.

Last time it was the financial sector that led the boom; and now we are going to have at hand a plenty of time to work out the next sector as markets could remain at lower levels for much longer time than anticipated.

Weekend reading:
Stock Markets: When Will The Bull Return?
When economy bottoms out, how will we know?

YouTube links:-
The Crisis of Credit Visualised -I
The Crisis of Credit Visualised -II

GOLD(comex $942)
It was a week of indecision for gold as it trended lower to take support at $900, its 50dma. But somehow manged to hold above our crucial trend deciding support at $890.
Now, if it manages to move above $965 this week then one more wave of uptrend would resume to brush past its 1000 mark once again. Our medium term target of $1200 is intact as long as above $890.

SILVER(comex $13.32)
This time it was felt prudent to include SILVER also in the outlook as its Long Term charts also are portraying bullish picture.
In the medium term, hold it with stop at $12.46 on the downside. It would have more bullish connotation on a close above $14.6 and would head towards its all time high at $21.22 in the medium to long term. So it is also a safe haven along with gold and could be entered into at current levels and/or accumulate on declines with stop at $12.46. Immediate resistances for the week are at $13.53 and $13.78.
However, it should be borne in mind that for novice traders it is a very volatile instrument to trade on the index and many prefer investment through physical and certificates.

TECHNICALLY MARKETS
U.S. DOW (6627): After recording another new low at 6470, Friday was a day of indecision. But still there is no sign of any revival as per the weekly Momentum Indicators(MIs). However, the daily MIs are giving signal of some bounce early next week but finally to be met with formidable resistances ahead. A close above 6835 could perhaps, bring some hope of arresting the decline in the short term.
This index is stuck within two important levels: 7200 on the upside and 6300 on the downside. Breach of either of these would determine the future course in the index. But guns are loaded more in favour of the bears. Breach of 6300 would bring into reckoning the levels of 5100 in medium to long term. While a breach of 7200 on the upside would signal the arrest of the downfall in the short term. But medium term turns positive only on a close above 7670.

U.K. FTSE100(3530): It is also halting confused at the lowest level though, the odds are still against the bulls. Only a close above its resistance at 3690 could bring some relief in the near term but further, even a failure to move past 3815 would help resume the downtrend.
Medium term turns positive only on a close above 4000.
Support on the downside is at 3200 though, the long term down target of 3000 has been projected earlier in previous week's posts.

JAPAN NIKKEI (7173) : Thus far, it tried its best to remain above its crucial 7000 level. But the chart patterns are portraying an ominous picture even for the medium to long term. As mentioned in our previous posts, a close below 7000 on this index means very bleak picture for this economy and this time perhaps, it may not hold this given crucial level. The mood is in favour of the bears.
Though unlikely, it needs to give a close above 7800 to mitigate the negative outlook for this index.

CHINA SHANGHAI (2193): The continuous uptrend in this index since November seems to be losing momentum. It is giving signs of reversal downward.
If it manages to sustain above its recent low at 2037 and move above 2315 in days ahead then it would be a very bullish sign. But the odds are against the bulls as it has formed an evening star pattern on its daily chart which signals the end of the uptrend. Further, a breach of support at 1945 would confirm that its 52week low at 1665 is threatened and may not hold in medium to long term.

INDIA BSE SENSEX (8326): It has closed below our crucial support at 8500. The long term down target around 6000 to 6500 comes into the reckoning now. It made a low of 8047 last week and a breach of this would be a signal to brace for a fall towards 52week low of 7697 in short to medium term. Further, a breach of 7697 would be a signal to brace for lower targets of 7000 to 6500 in the short to medium term. A close above 9000 levels is required to mitigate the negative short term outlook; but looks unlikely in the given situation.

How much time it would take to hit the lower targets is a matter of debate because the volatility around the globe including in our markets is cooling off. In the given scenario, there are also lesser chances of rising like a tennis ball from the levels below, though intermittent bounces are a part of every fall.
A robust rally is not anticipated unless we get some good signs from the earnigns next season and also the election results in May. Technically this view is also substantiated by the fact that the symmetrical triangle formed on daily, weekly and monthly charts has been breached conclusively and that signals of drifting lower; if not immediately then in staggered manner over the next few weeks.

INDIA NIFTY(2620): Nifty is also signaling of drifting lower in short to medium term. The 52week low at 2253 may not hold once 2500 is taken out. Any bounce from current levels may find it difficult to move past the resistances at 2720 and then at 2790. "Sell on rise" situation remains, and the stop losses for short positions would be 2800 for short term traders and 3000 for medium term traders.
Initiate fresh shorts on reversal from the resistances mentioned above. The targets for short positions would be 2260 and then 2200.

TECHNICALLY STOCKS
Times have changed and do not expect those large moves of the past couple of years. The bounces from the levels below could be lacklustre and the momentum of fall also could be of consolidation nature. In the given scenario it is much better for short term traders to book small profits on either side frequently.
The overall picture is bearish and trend traders could initiate shorts near resistance levels with appropriate stop losses. Also trade according to the overall sentiment
of the market rather than being contrarian always.

RIL (1170): Buy near lower levels for short term bounces from 1060 or 1110 levels for targets of 1250 and 1300. Stop loss is 1050 for short term traders, while long term accumulation is suggested at levels below 1100 to 1000 with final stop at 850.

SBI(940): Sell on rise with stop loss 1000, for down targets of 865. Long term accumulation suggested on decline, with final stop at 750.

INFOSYS(1219): Bullish engulfing pattern could cause a rise up to 1320 in this stock in the days ahead. Depreciation in rupee against dollar helps keep it buoyant from time to time. But a failure to move past 1260 would be a cue to go short for target of 1165.

OUTLOOK FOR THE WEEK 02MAR TO 06MAR 2009

2009-03-01T11:21:00.012+05:30

FUNDAMENTALLY
The fundamental news flow was on the expected lines last week -dismal and adding to the already heightened crisis of confidence. Even the greatest investor of our times, Warren Buffet suffered a massive downfall in profits at the hands of this gloom and doom. There is still no light at the end of the tunnel as the fog gets thicker and thicker. The hopes of early recovery in emerging markets is also in question for the moment.

There is a lot of U.S. economic data lined up for the week ahead (see the calendar at the bottom of this page). Besides that, The European Monetary Union and U.K. economic data also includes GDP and Interest Rate decision on Thursday next. The outcome of all this would be sufficient for some boom gloom and doom atmosphere next week! Watch out!

The weekend select readings are:
1. Banks and economy to keep bears' grip on stocks

2. Berkshire net sinks; Buffet says economy in shambles

3. How the economy was lost

4. Broken BRICs?

GOLD
It was a week of profit booking in gold. But it has managed to stay above our $920 levels so far. It is unlikely that a downtrend would commence but a breach of $920 can cause a retracement up to $850. This would be confirmed only on a close below $890.
It is more likely that in the given economic situation, gold would remain buoyant in the times to come and the medium term target of $1200 could be achieved.

TECHNICALLY MARKETS
THE WORD OF CAUTION, HOWEVER, IS THAT MOST OF THE MARKETS SEEM TO BE HEAVILY SHORTED AND SOME ANALYSTS ARE ADVISING ALSO TO COVER THE SHORT POSITIONS. ALTHOUGH THE FUNDAMENTAL AS WELL AS THE TECHNICAL PICTURE IS NOT POINTING TOWARDS A SHARP RISE AT THE MOMENT, HEAVY SHORT COVERING ANYTIME COULD BE A CAUSE FOR A SUCKER RALLY AS WELL! REMAIN WATCHFUL!

U.S. DOW (7063): It made a low of 7034 with high volume, just about 100 marks above its 12 year low of 6937. The index closing near its lowest point of the week is not a good signal. But the Momentum Indicators are about to enter their oversold region and it would have to be seen if they can take a bounce from there or stay there for days together!
Overall picture is negative and it needs to give a close above 7560 to heave some sigh of relief for a brief period at least. The positivity returns only on a close above 7900. Otherwise, it is a sell on rise up to 7560.
Support below 6900 is around 6300 but a fall up to that level could also attract short covering and cause a brief rally which may be cut short by negative economic data.
S&P500 closing well below its crucial 750 mark confirms the impending woes of the U.S. markets.

U.K. FTSE100 (3830): Making an attempt to build support at 3800 levels but the bearish engulfing on Friday may not help hold this level next week. 52 week low at 3665 can be a point of short term rebound. Yet, the things turn weak for this index below 3800 and then the long term target of 3000 comes into the reckoning. 3200 also would lend support on the way down.
Failure to move above 3980 next week would be a cue to remain short. Final stop for short positions would be at 4120.

JAPAN NIKKEI (7568): This index respected its crucial support at 7000. Momentum indicators on daily charts are pointing up and trying to enter the positive zone. But strongly negative cues from around the world may not help it to move higher beyond 8300, only where it turns positive. In the given scenario, it would have to be seen if it can hold its 7000 support levels in the days ahead. A move above resistance 7840 would be very positive while a fall below 7000 would be ominous for this index. The outlook is neutral for the week ahead but negative in the short to medium term.

HONGKONG HANGSENG (12812): Weekly charts imply that negativity prevails. A close above 13800 is required to turn things positive for itself, which looks unlikely at the moment.
Supports are at 12440 and then 11815. The outlook is negative for short term. A fall below 11000 anytime would be ominous.

CHINA SHANGHAI (2065): (please note that the China index has been reviewed afresh on Monday morning as the levels given earlier were mistakenly of another index of China. The error is regretted).
It has been a period of correction in China after a steep climb since January. Another support below here at 2030 could cause some bounce perhaps. But a breach of 1945 would be signal for resumption of another downtrend in this market. This would be further confirmed if 1815 is also breached.
Inability to move above 2195 would be a cue to remain short while a close above 2275 is required to initiate fresh long positions.
The whole world is focusing on this emerging market; yet a host of negative stories also keep making rounds from time to time. Here is one latest story on China for this week also.

INDIA BSE SENSEX(8892): On daily charts there are long legged candles suggesting that it has been respecting support at 8600. Daily Momentum indicators are also not diverging negatively and the weekly ones are still lying flat though, in the negative zone. But all this may not help paint a bullish outlook in short to medium term as it is faced with formidable resistances ahead. It would need to blow off the cap in the 9300 to 9400 zone in the first place, and that looks unlikely soon. But still it would be a "sell on rise" market up to 9700. All this implies that we may be trending lower in the times ahead with intermittent bounces from supports below.
Supports are at 8600 and then at 8300. A breach of second support would be signal that the 52week low at 7700 would be taken out soon to drift lower towards long term target of 6000.
Also watch out for a possible short term bounce from 8300 though, a close below 8500 itself would be another sign of impending weakness.

INDIA NIFTY (2764): Nifty also is signaling a strategy of sell on rise with stop at 2875 on closing basis, for the down targets of 2650 and 2510 for this week. The support is at 2658 and then at 2570. The crucial support would be at 2500. A close below here would imply that the 52week low at 2253 may not hold for long.

TECHNICALLY STOCKS

RIL(1265): Some news-based fireworks are expected on this counter next week as it proposes to merge its own company RPL with itself. This move could make it a mammoth corporate in India. But it faces resistances at 1335 and then at 1385. Short-term swing-traders can initiate shorts if it fails to close above here. But strict stop loss of 1400 on intraday basis is necessary. On the downside it has support at 1200 levels. A breach of this anytime would keep it loitering towards 1000 in the medium term.

SBI(1027): No clear picture for trading until breaks out of its range between 990 and 1150.
However, this is one of the best long term picks besides the other two here. So, long term investors can pick around 1000 and downwards with stop at 850.

INFOSYS(1231): Similarly, its better to avoid short-term trading in this counter as well. But its a world class company and should be invested into at lower levels of 1050 to 950.

CHART PATTERNS- FOR EDUCATIONAL PURPOSE ONLY!

2009-02-28T13:04:00.010+05:30

(Please click on the chart to enlarge)
Chart courtesy Quote.com

Given above is the monthly chart (End of Feb 2009) of INDIA BSE SENSEX.
The symmetrical triangle formation (encircled) is at the lower end of the wave starting from the all time high. This lower end situation implies that an upside breakout from the upper boundary of the triangle was not likely. So, the trendline has been breached on the downside.

This observation should hold good and the likely long term target for this index lies somewhere near 6000 levels. This target was projected on this blog a few months ago also when 12500 support was breached. That time it was arrived at by Fibonacci calculations.

Whatsoever, it may not be presumed that the markets are going to achieve these targets in a few days time in normal circumstance. It should also be borne in mind that the given chart is a monthly chart and it has longer term implications in comparison with weekly and daily charts. So, it could take many weeks with many bounces and short rallies from the supports below. The index could even chart another wave up towards 10000 before falling down again if our wave counts are not correct. But the market does not seem to have found a bottom yet!

However, it could be assumed that the markets might consolidate within 6000 and 11000 range over the next couple of quarters.

Since the wave counts within the triangle above were not easy to identify, it was difficult to pan out the likely trend ahead. In a perfect formation, there need to be at least five waves within the triangle before breaking out on either side. Which wave it could be charting at last is a moot question! But as per the counts of this blog, the breach of the triangle seem to have occurred on the downside.

WEEKLY OUTLOOK: 23FEB TO 27FEB 2009

2009-02-22T10:06:00.012+05:30

FUNDAMENTALLY
We have been into this mayhem for over an year now and there still is nothing very encouraging to say fundamentally about the markets in the near term. In the absence of confidence, the valuations do not seem to be of any significance to the market players. Gold is being seen as the only investment option as the markets drift lower without any hope of quick recovery. The fear is that this prolonged consolidation at lower levels could force the big players also to encash some of their holdings in search of other avenues of investments or mere requirement of cash. One thing looks for sure that the economic data is not going to be improving for quite some time in the first half of 2009.

Therefore, in short-term to medium-term the economic data would be the main driver of the markets and the investors should still focus on the data such as unemployment, housing and consumer spending etc -specifically that of the U.S.
(The U.S. economic calendar is added to this page at the bottom).

Apart from the economic data, the market players would be anxiously watching out for the quarterly earnings over the next couple of quarters which are surely going to give a decisive direction to the markets. Until then, the markets could remain within a narrow range with occasional triggers from the economic data. Small to medium scale Long term Investment in select counters at current as well as at the lower levels is not ruled out but any rally beyond the current range is not in sight in near to short term. Markets could consolidate more at the lower end of the current range.

The following links also make the reading for this weekend:

1. Behind Dow's plunge to six year low: one big unknown .

2. Shares of the millionaire Warren Buffet have fallen to the lowest in over five years.

GOLD
Gold breached its $1000 mark and retraced a little. Momentum Indicators(MIs) on the daily charts have just entered into the overbought zone but on the weekly charts they are still below the overbought area. This implies that this precious metal could remain buoyant and not breach $923 mark on the downside in short to medium term. It is not a candidate to be shorted in any case in the short- term to medium-term.

(India is the world's largest consumer of gold. But it would be interesting to note that there are reports of main street people selling their physical gold in view of the attractive price of around Indian Rs.15000/10grams. There are long queues at the buying jewelers while the selling ones are grumbling about sharply dwindling buyers of gold and jewelery except for compulsion of marriage etc).

The following two links also make an interesting reading about this all time favourite investment:

1. GOLD primed to be mania asset.

2. Is Gold really a safe haven in this recession?

TECHNICALLY
For the last couple of months, the markets had been consolidating within a range and the range had been getting narrower and narrower. And also that whenever there is consolidation, there ought to be a big move after a breakout from either side. But it was also to be noted that this consolidation happened on the lower end of the charts. Since it was happening at the lower end, the breakout also was to happen on the downside rather than on the upside. For an upside breakout, the markets should have been in an uptrend, which they weren't. So, finally the breakout has happened on the downside on the Dow and the FTSE100. This time the consolidation could happen at the lower levels and the markets in short to medium term, may not rally beyond the given upper limits below. Long term investors should start accumulating in tranches, the strong counters on sharp declines from current levels.

U.S. DOW(7366): Since last October, our Long to Medium term targets for Dow had been the levels of 6000. On the way down the supports would be at 7200 and then at 7000 levels.
Inability to surpass 7750 soon, or reversal from/below that area would be a cue to initiate fresh short positions. This index needs to give a firm close above 8000 to mitigate the overtly negative outlook for short to medium term.

U.K. FTSE100 (3889): This index has also closed below its crucial level of 3900. Failure to move above 4050 soon or reversal from/below that area would be a cue to initiate fresh shorts. Immediate supports are 3734 and then 3665. The long to medium term down target for this index could be 3000 with intermediate support at 3200. It would need to give a close above 4200 to make things positive for itself.

CHINA SHANGHAI (2262): As expected, there was profit booking in this index at 2400 levels, just below our crucial resistance level of 2450 area. There is a bearish hanging on the weekly charts. In the given world scenario, it would have to be seen if it can make it above its crucial resistance of 2450. 2100 should lend good support in the days ahead. A consolidation that does not cause a breach of 1950 levels, would be a bullish sign. But the things would turn sour only on a breach of 1950 support on the downside.

JAPAN NIKKEI (7416): So far, this index has not closed below its crucial level of 7400. But this may not hold in the face of weak signals from the Dow on last Friday. Further, if it does not manage to hold above 7000 mark in the days ahead then it would enter into an uncharted territory. That would be ominous for this market.
It would need to give a close above 7925 to mitigate negative outlook in short to medium term.

HONGKONG HANGSENG (12699): Hangseng also seems to be on the verge of closing below its crucial level of 12440. Below here the support would be at 10675. It seems to be getting some encouragement from its peer markets in China though, it would have to be seen if it holds its 11000 level in short to medium term. Short term becomes positive only on a close above 14000.

INDIA BSE SENSEX (8843): The symmetrical triangle discussed last week was in the formation at the lower end of the chart -implying that a breakout should happen on the downside in the direction of the trend. So, it has happened and the lower trend line has been breached and the index has closed far below our 9000 mark. But now the moot question is: how far down it has to go, and how long could it take!

For quite sometime, our long term targets were projected to be somewhere in the area of 6000. But it may also be borne in mind that the emerging markets, including India, have optimistic outlook for the future and many of the stocks would reach mouthwatering levels below the 52week low of 7700 on Sensex. So, it may be safely assumed that there is a hope of a long term bottom in the band of 6000 and 7000. But this is not to say that the markets would start falling like salt tomorrow onwards and reach the down targets. There are multiple supports on the way down which would give bounce from time to time and small rallies also, perhaps.

The crucial mark to be watched on the downside would be 8300. A firm close below here would imply that the 52week low at 7700 is going to be busted. But a bounce from 8300 or 8500 would slowdown the falling momentum for a few weeks more. The favoured view is that there could be a bounce from these levels though, the markets may not rally beyond 9400 mark in the near term and rather consolidate at lower level.

In the given scenario, it would be too optimistic to take a contrary view because the sensex needs to give a decisive close above 9725 in the near term to negate the negative outlook; that looks unlikely in the face of gloom all around.

In the week ahead, the supports would be at 8630 and 8316 and the resistances are at 9375 and 9725. Sell on rise with stop at 9400 or final stop at 9730 for lower targets of 8550 to 8350. But short term traders should not attempt going short in the band between 8300 and 8500 until a close below 8300.
Although, a sharp recovery is not envisaged in the short to medium term, yet the Investors with long term horizon should start accumulating their well researched large cap counters at lower levels. Investment in Small and Mid cap counters would require a highly competent and professional approach at this stage though, the rating companies failed to foresee the current disaster and their ratings became a laughing stock.

INDIA NIFTY (2736): Nifty also is signaling a strategy of sell on rise with stop at 2875 or 2950 on closing basis, for the down targets of 2650 and 2510 for this week. The support is at 2658 and then at 2570. The crucial support would be at 2500. A close below here would imply that the 52week low at 2253 may not hold for long.

STOCK TECHNICAL

RIL (1253): Reliance Industries could not manage to move above its Resistance at 1400 and declined below our 1280 mark. Now it could be headed lower towards 1150 this week. Otherwise, sell it on rise with stop loss at 1350. A close below 1150 can take it to 1050 also.
Its 52week low is at 930 and it would have to be seen if it could find support between 1000 and 1100 this time!

SBI(1046): State Bank of India seems to have resumed its downtrend once again as it has the bearish connotations on its charts. Sell with stop loss at 1100, for target of 1000 or 960.
Area around 1000 has been lending support to this stock since July 2008. This time, it would have to be seen if some long term buying emerges at this level. Otherwise, a close below 960 would drag it towards support in the 850 area.

INFOSYS (1178): It could not manage to even reach the 1300 mark and found support at our 1160 mark. In the given scenario, it may not hold this support this week and drift lower to 1100. A fall below 1100 would target 1050 also. Sell on rise with stop at 1225.
Long term buying could emerge in the band between 1000 to 1100. But it needs to hold above 1000 to remain in good books of the investors.

WEEKLY OUTLOOK: 16FEB TO 20FEB 2009

2009-02-14T19:23:00.018+05:30

FUNDAMENTALLY
Fundamentals may not be dead as yet but there surely could be smokescreens created by stimulus packages, without letting people know the real hole in the bank books. There must be a plenty of zombie banks operating and the governments are only talking of tough times but not letting the cat out of the bag.

A couple of stories below would suffice our fundamental outlook this week:

Will the stimulus bill boost the public confidence.

Fighting recession has become a new kind of warfare.

Instead of stimulus, do nothing -seriously!

The stories above may be USA specific but its economy has the final say worldwide.

GOLD
As expected, the gold price is heading towards the rounded off figure of $1000. The short term to medium term targets could be $1000 and then $1200.
However, from the long term investing point, a contrary viewpoint is also making rounds. Please click here to read the detailed story.

MARKET TECHNICALS

CHINA SHANGHAI(2321): This time, China assumes first place here among the markets, technically. It would require a careful reading besides watchful eyes. This is because the index is rising higher and higher over the last 4-5 weeks despite weak signals emerging around the world.
Its 50DMA and 100DMA have converged and the price is well above these converging lines. Its 200DMA at 2460 is also not too far above.
At the same time, it is also poised precariously at the level of its September2008 peak of 2333. A close above this mark would be a positive signal; more so if it is a weekly close.
Further, it faces significantly stiff resistance in 2450 area where 200DMA and the Fibonacci reversal point are lodged. A move above here could remain a wishful idea, at least in the near future.
Although the indicators have yet to enter the overbought zone and there are no signs of reversal, a reversal from current levels could raise doubts about its sustainability at higher levels.
However, on reversal- if and when it happens- the index needs to hold above 1995 mark in any case to prove that it has placed a bottom for itself for medium term. Because a breach of 1995 would imply that the rally is not sustainable. Trend reversal would be confirmed on a breach of 1900 support.
The recent rise in China Indexes could also be seen through the eyes of some fundamental analysts and experts who doubt it. Please click here to read this view point in detail.

U.S. DOW(7850): Formation of bearish engulfing candle on the weekly charts of this index is a strong bear signal. Momentum indicators(MIs) are also pointing downwards and for over four weeks now, the index has not been able to give a close above its crucial resistance at 8400.
The given situation implies that the index might continue to drift lower in the week ahead. It would not be a surprise if it reaches and breaches its 52 week low at 7400 levels.
As mentioned in the outlook many weeks ago here, this index could land around 6000 levels in medium to long term if 7400 is breached on closing basis. To negate this negative outlook, this index needs to give a close above 8400.
Immediate resistance for the week is at 8240. Supports are at 7660 and then at 7390.

INDIA BSE SENSEX(9635): Will this index try to do Shanghai against all odds? Perhaps not! Because fundamentally, the outlook is very unclear in view of the impending general elections sometime this spring season. But technically, its weekly MIs are in the neutral area with positive divergence, implying that it can remain in sideways mode with positive bias in the near term.
However, on the weekly charts, the index is within a symmetrical triangle since first week of November (symm. triangle formation from last week of Oct has neutralised in the last week of Jan) and the last wave is in uptrend that can terminate in 10100 area or even before that. The resistance on the way up is at 9800.
This index would also take cues from the world markets and do nothing on its own for a few more weeks. Fresh longs above 9800 would require very watchful eyes as the index can reverse from any of the levels above here.
To sum it up, the strategy for the days ahead could be: Sell on rise with stop at 10200 and Buy on decline with stop at 9000. Another support before 9000 is at 9300 also where buying for short term can emerge.
Breakout above 10200 though not envisaged, has targets of 10700 and then perhaps 11500 also. But a breakout below 9000 would imply another bout of selling for new lows up to 6000 in the medium term.

JAPAN NIKKEI(7779): The weekly chart on this index also has formed a bearish engulfing candle. It is a signal for reversal down. MIs are giving mixed signals but in the negative territory.
Supports are at 7670 and then at 7400. Failure of 7400 would threaten its 52 week low at 7000.
It needs to close above 8500 to mitigate the negative outlook for this index.

HONGKONG HANGSENG(13555): It seems to be drawing some inspiration from Shanghai index, but was unable to surpass its crucial resistance level at 14100.
MIs are pointing up in the neutral zone, but in the face of weak triggers from around the world, it could also drift lower if fails to breach the above mentioned resistance at 14100 soon. Supports would be at 12730 and then at 12440. Failure of 12440 would threaten its 52week low at 10676.

INDIA NIFTY(2948): Similar to BSE SENSEX, this index is also charting a symmetrical triangle. But this one seems to be nearing its upper boundary soon. So, one needs to be very cautious from here upwards.
It faces resistances at 2970 and then at 3030. Failure to move past 3000 would be a signal of impending weakness.
The range for this index is 2800 and 3050 in the very short term. However, the medium term range is between 2200 and 3200.
The strategy would be to sell on rise with final stop at 3200 and buy on decline with final stop at 2760. Another support at 2800 could also lend support as bears could offload some of their shorts here also.
Only a close below 2760 would threaten the 52week low at 2200.

STOCK TECHNICAL

RELIANCE(1390): Reliance Industries manged to close near its crucial resistance area around 1400. If it manages to move above this level then it could be headed towards its medium term ceiling at 1500. But it may not be a confident journey upwards as it could reverse from any level below 1500. It has multiple supports as well. Short positions could be initiated for short term small gains once it nears 1500 with stoploss of 1505.

SBI(1194): State Bank of India also managed to close well above our expectations. Now it faces resistance near 1250. A reversal from here would pull it down towards 1150 and 1100, while on the other hand a move past here could take it up to 1350.

INFOSYS(1254): It is finding it difficult to sustain above 1300 confidently. Yet a firm close above 1300 could take it up to 1450. Supports are at 1220 and 1160.

To sum up the outlook for the stocks above, the situation is similar to the indexes: Sell on rise and Buy on decline with strict stop losses as long as they stay within the given outer levels above.

WEEKLY OULOOK: 09FEB TO 13FEB 2009

2009-02-08T11:07:00.010+05:30

FUNDAMENTALLY
The current mood is upbeat in view of the U.S. stimulus package, that, some think would wash all the sins of the banking sector and as if they would be soon lending blindly as before. A number of analysts are even predicting a big rally starting next week, just by analyzing the index charts only. While some have even placed a bottom for the markets swearing by Warren Buffet.

However, the cautious ones question the current earnings and the value of stocks in relation to the impending deterioration in employment and no sight of any booming business-sector for the next many quarters to come. They have even questioned the ratings of many companies like GE etc.
Above all, there are still some doubts about certain banks if they would be able to survive this turmoil. Oil servicing companies, the darlings of the last bull market are being swiftly downgraded in ratings. Sectors like Banking and Auto are under pressure to mend their ways, while the IT sector could be facing repricing requests amid declining orders. Trade balance numbers are awaited anxiously every time and the threat of new trade barriers emerge at every meeting. Also that the emerging economies be seen differently from case to case.

Therefore, whatever the 'index' chartists predict, the fundamental situation of almost all the businesses still remains absolutely unclear as the depth of the pit is not in sight yet. Only the 'very long term' investors could be advised to cherry pick their well researched stocks, sectors and the markets in the current situation. But it could be very painful for short to medium term investors in such a highly unpredictable situation.

Finally, the answer lies in the forthcoming economic data world wide. Markets are keeping a watch particularly on the U.S. 'housing', 'unemployment' and 'retail sales' or 'consumer spending' etc. over the next few weeks at least. Over the next few weeks, there could be some news also from the European financial sector which is not keeping a good health either.

TECHNICALLY
Technically, the short to medium term trend is sideways within a narrow range. This trend is causing desperation and despondency among the short term traders (the poison could build up again in desperation). No big move in either direction is in sight in the near future except that the Obama package may perhaps move these markets a little up.

Almost all the markets except China are moving in a same pattern and rhythm. But China has been in a strong uptrend and about to enter into the overbought region soon.
The other markets discussed below are showing signs of starting an uptrend but are faced with some formidable resistances as usual. The sideways to negative signals are emerging also from some bellwether stocks.

Would the Obama package help these markets to blow off these resistances? Or, would the negative news weigh heavier on the markets? Its almost 50-50 for the week ahead but breaking out of the range seems unlikely.

Overall mood is passive and options writers are back into business. But writing options is strictly meant for savvy traders as these strategies can cause unlimited financial loss.

MARKET TECHNICAL

U.S. DOW (8281): It faces resistance in the zone between 8450 and 8500. Inability to surpass this zone would be a negative signal. A move above this zone, however, could help it move towards 9000 in the medium term. But the short term turns positive above 8650 only.
Daily Momentum indicators (MIs) are trending up in positive territory and the Weekly MIs are trying to enter into the positive territory but still in the negative zone. This implies that a sustainable trade above the current levels next week could save this market from trending lower in the short term and help surpass the 8500 mark though, any sharp rally is not anticipated soon.

U.K. FTSE100 (4292): MIs on its chart are displaying strength. Seems to be headed towards 4600 if manages to close above 4400. The resistance is at 4317. Go long on a close above here with stop loss at 4300.

JAPAN NIKKEI (8077): Weekly MIs have almost turned positive. Weekly indicators are much trustworthy than daily ones in a sideways market but it faces resistances in 8300 area and then at 8500. Inability to move past the 8300/8350 area would be a cue to remain short in this market. Short term turns positive only on a close above 8700.

HONGKONG HANGSENG (13655): Daily MIs are trending up but weekly MIs are still in the negative zone though in an uptrend mode. Area from 14000 to 14100 poses resistance in the days ahead. Short term turns positive on a close above 14500 only.

CHINA SHANGHAI (2181): As said earlier that it is in a strong short term uptrend and is headed towards 2300. A close below 1900 only would raise doubts about its recovery. Otherwise, it seems to have formed a bottom for itself at 1600 levels. However, keeping in view the overall scenario worldwide, it would be a matter of caution to take an extremely positive view until other markets also recover and in view of its dependence on exports.

INDIA BSE SENSEX (9301): Weekly MIs are seeking to enter the positive territory but with flat formation, implying low conviction to do so. Its inability to close past 9500 would be a cue to remain short. Another resistance would be at 9800. This index needs to move past 9800 to turn the short term outlook somewhat positive. On the other hand, a breach of 8632 on the downside would signal the end of short term uptrend.

INDIA NIFTY (2843): This index can attempt to move towards 2885 or up to 2967. The ceiling is in the 3070 area. Failure to move above 2900 would be a cue to remain short in this market. On the other hand, a breach of 2662 on the downside would signal the end of uptrend.
The range for medium term is between 2500 and 3100. Technically savvy traders may look to write calls of strike 2950 and above on rise with final stop at 3100. But writing puts is not suggested. Writing options is a risky affair and can cause unlimited loss as well. Use your own discretion.

STOCK TECHNICAL

RELIANCE(1343): Even if it moves towards 1365 or 1400, it can reverse from any of these areas towards 1250 and 1200 on the downside. It is stuck in a range between 1100 to 1500. There is no clear outlook for this stock this week as it can trend sideways for a few more weeks.

INFOSYS(1287): It is facing resistance at 1300 and unless it moves past here, it could drift down towards 1160. The ceiling is at 1400. It is also stuck in a range between 1000 and 1400. It can also trend sideways within this range for a few more weeks. Supports are at 1220 and 1160.

SBI(1118): This stock can decline towards 1000 over the next days. 'Very Long' term pick at 1000 area is possible. Needs to move past 1200 to look slightly positive. The sideways range is 900 to 1400.

GOLD: Money seems to be moving towards the precious metal though, it is reluctant at the moment to cross over $920 immediately. Buy on declines up to $850 levels with final stop at $790. Beyond $920, the Long term "rounded off targets" are $1000 and then $1200.

WEEKLY OUTLOOK: 02FEB TO 06FEB 2009

2009-02-01T09:55:00.008+05:30

FUNDAMENTALLY
Although the markets are trying to move up sometimes on some positive cue, yet its proving to be a slippery climb every time markets move up. Obama's efforts evoke positive response occasionally from the markets but the deteriorating economic data from around the world is weighing heavy on that.

Earnings in India have not been that bad over all, but the guidance given by some front runners should be an alarm for the next quarters. The earnings in Japan and the U.S. particularly have been disappointing.

Another doubt which is making rounds is that there is no clarity about the health status of hedge-funds and sovereign-funds amid this turmoil. Even the big brains at Davos are groping in the dark to find the exact depth of this pit.

But there are signs of liquidity easing somewhat but no one is willing to lend amid deteriorating economic figures and the inability of economists to gauge the exact magnitude of the impending turmoil.

Therefore, every thing depends upon the "economic data" in the weeks ahead which would guide the markets. Stimulus packages would only give some upward bounce technically for a short term but not initiate a rally unless there is a bottom in sight in the housing data, the consumer confidence and the employment figures etc.

GOLD: Long term investors may accumulate gold on every decline up to $850 with final stop loss at $790. Long term target is $1000 and then $1200.

TECHNICALLY
Almost all the charts of major indexes are forming a somewhat 'descending triangle' like pattern for over three months now. But there doesn't seem to be any mention of this when reading some important technical analysts. Perhaps this could be a mirage like situation but the pattern is definitely descending if not a perfect triangle. Therefore, this pattern could be pointing towards another trough in the medium to longer term, lower than the OCT/NOV lows.
However, the overall outlook is neutral but with a slight tilt towards negative sentiment. Yet the uptrend track is still slippery until the given important resistances are blown off decisively.

U.S. DOW (8000): Could not close above our given level above 8400 and reversed from that area to close just at the psychological mark 8000. Things would turn neutral for this index only on a close above 8500 resistance levels. Until then it could drift lower towards its previous low of 7400 levels if there is no sustainable bounce from 7850. Watch out for a sudden bounce from 7850 levels though, the Momentum Indicators(MIs) have started diverging towards the negative zone; yet not very pointedly.

U.K. FTSE100 (4150): This index also could not close above our given 4300 level and drifted lower to close near its support at 4100. Failure to hold 4100 on closing basis would pull the index lower towards its crucial support at 3800 levels. But also, watch out 3957 mark for any bounce though, the MIs are diverging negatively but still not overtly negative; so to speak. A sustainable bounce from this level could help it remain in neutral mode for some more time. But it would require to close above 4350 resistance level to turn short term trend positive in this index.

JAPAN NIKKEI (7994): This market also failed to close above our 8350 mark last week and reversed to close at psychological level almost 8000. Although the MIs are not overtly negative, it could be headed down towards 7400 support level if didn't get a bounce from 7671 mark. But it would need to close above 8350 mark to turn things positive for itself in the short term.

HONGKONG HANGSENG (13278): Here also the MIs are still in the negative territory but turned flat. The outlook is neutral as long as 11800 level is holding on the downside. Breach of this mark would imply test of previous lows.

CHINA SHANGHAI (1990): As said earlier, this market is presently the strongest one among the lot. Just poised below its resistance at 2000 is a positive signal. A move past here would take it towards 2100. If there is a firm weekly close above 2100 in the coming days then it would deemed to have put in place its bottom at October lows(1665) for this bear market. However, there would be certain more requirements of fullfilling some important technical ceremonies before jumping the gun at 2100. For example, a reversal back from 2100 area and then again a close above 2100 with good volumes would be a confirmation of medium term uptrend. Until then, just remain long with stop loss placed at 1900. Also keep watching the volume on rise.

INDIA BSE SENSEX (9424): Formation on the weekly charts point towards a positive outlook. It has been respecting 8500 levels since November. But over the last three weeks, it has been facing resistance in the area little above 9400 where it has closed this week as well. So, it would have to be seen if it can remain above this level this coming week as well; and that would be a very positive signal.
MIs are turning positive but the resistances are at 9550 and 9768. But a close above 10700 is needed to make things positive for this index in the medium term.
On the other hand, a close below 8630 would be the end of this short term uptrend. Further, a breach of 8500 would bring 6000 mark in the reckoning.

INDIA NIFTY (2875): Main Resistance for the week is at 2904. A close above here would be a positive signal and could take the index to 3147 again. medium term would turn positive only above 3147. For the week ahead, the band between 2772 and 2800 should lend support. A close below would signal the weakening of short term uptrend. A close below 2660 would terminate the present uptrend.

STOCK TECHNICAL

RELIANCE: A robust close above 1274 last week has negated the negative outlook in the short term. It may rise up to 1400 this week. But be watch ful in this area. Stop loss for swing traders is 1200. Buy on a decline with a stop here.

INFOSYS: Once past 1320 on closing basis, it could move up to 1400 and 1450. Accumulate on decline for long term with final stop at 1190.

SBI : It is still in negative mode and needs to close above 1250 to negate this view. Buy only above 1250 for a target of 1375. Medium term turns positive only above here.

WEEKLY OUTLOOK: 26JAN TO 30JAN 2009

2009-01-25T15:54:00.006+05:30

All the major world markets are trading near their crucial support levels, which is a sign of weakness.
Save China (Shanghai) all the markets are showing no signs of rallying in the near future. They are capped with strong resistances from where they could reverse back even if an attempt is made to rally from current levels.
It is a situation of multiple supports as well as formidable resistances near the current levels though, the tendency is to trend lower in the short term. High volatility in a narrow range is anticipated in the near future.
Markets are not picking up any positive news but waiting only for negative news of even the lesser magnitude.
Surge in Gold prices and lesser participation in equity is pointing towards money moving towards commodity. Inflation talk is out and deflation talk is in. Crude oil has lost its attraction. The impending deterioration in European economy is clearly reflected in the weakness of Euro; and it is yet to be seen if Obama mania can salvage the sinking ship of the U.S. economy.

Among the emerging markets (not fundamentally but technically) China does not seem to be in a mood to form a lower bottom other than the 1665 of Oct 2008. But India can do so. Still it could form a bottom somewhere between 6000 and 8000 over the short to medium term. Therefore, technically, these markets are now "buy for long term, investing in tranche on sharp declines from current levels".

INDIA BSE SENSEX (8674): The index has closed well below our 9000 mark. Momentum Indicators(MIs) are still in the negative territory and also diverging negatively again. Support around 8450 is possible where short positions could be squared off. But a firm close below 8500 levels will take it down to 8000 levels.
Inability to close above 9000 mark would keep the bulls under pressure and consequently would point towards moving below 8000 in days to come. Failure of 8000 would project 6000 levels on the horizon.
Any rally from above 8400 would be a muted one and the long positions(short term) initiated at these levels may be squared off soon on any rise up to 8900 to 9000 level. Fresh longs are advised only on a close above 9400.

INDIA NIFTY(2679): The closing below 2750 mark has turned outlook negative in the short term. Supports are at 2600 levels and then at 2500 levels. There could be a sharp rebound from the second support. Short positions may Watch out this level! However, the inability to give a close above 2850 would be signal to remain short for lower targets in days to come. Volatility index falling down to 34 implies that the range could get narrowed down for further consolidation and rallies may remain muted. Charts of bellwether stocks also point towards a consolidation phase at lower levels besides no inclination towards a rally in near term. But this could be the final phase of consolidation before we get a reasonable rally for few months. Medium to long term investors may look for opportunities in well researched counters during sharp declines from current levels. But short term traders should not expect sharp short term rallies soon but only sharp rebounds. Longs only above 2850 with strict stop loss. Or buy with strict stop loss at lower levels of 2500 for a sharp rebound only. Remember that inability to move past 2850 next week would be a cue to remain short for lower levels.

U.S. DOWJONES (8078): The index is hovering above its crucial level of 8000 for a few days. It is signal of weakness. Although the volume has improved, MIs are still in the negative territory and pointing downwards. Any rally from above 8000 could get terminated below 8550. Inability to close above 8400 early next week would be a cue to remain short for targets of 7400. The index faces formidable resistance from 8400 to 8550. Fresh longs are advised only above 8550.

U.K. FTSE100 (4053): The picture is not different here either. Inability to close above 4230 next week would be a cue to remain short for lower targets of 3800 levels. Any rally from above 3800 could be muted one and get terminated in the formidable resistance in 4250 area. Fresh longs are advised only on a close above 4300 levels.

JAPAN NIKKEI225 (7745): MIs have suddenly turned very negative and into the negative territory in this index. Failure to hold above 7600 on closing basis would be a signal for impending fall towards 7000 again. Failure to move above 7975 soon would be a signal to remain short in this market. Fresh longs only on a close above 8350. A close below 7000 anytime would be ominous for this market.

HONGKONG HANGSENG (12579): Failure of support at 12000 would take it to 11000 next week. Chart indicators of this market are no different from other markets. It also faces formidable resistance in the 13000 and then 14000 levels. Any rally would get terminated in these areas.

CHINA SHANGHAI (1990): As said earlier, this market is presently the strongest one among the lot. Just poised below its resistance at 2000 is a positive signal. A move past here would take it towards 2100. If there is a firm weekly close above 2100 in the coming days then it would deemed to have put in place its bottom at October lows(1665) for this bear market. However, there would be certain more requirements of fullfilling some important technical ceremonies before jumping the gun at 2100. For example, a reversal from 2100 area and then a close above 2100 with good volumes would be a confirmation of medium term uptrend. Until then, just remain long with stop loss placed at 1900. Also keep watching the volume on rise.

GOLD: A reversal from $900/$920 area and then holding above $850 would be a bullish sign. Accumulate on reversal with final stop at $800. A rise above $900 again after reversal from 850 area would be cue to remain long for medium term.

STOCK TECHNICALS
The overall sentiment is pointing towards consolidation at lower levels.

RELIANCE: Consolidation at lower levels is anticipated. No trading idea for the week. But long term investors can pick at lower levels of 1000 with final stop at 900.

SBI: It has turned bearish. No trading idea for this stock this week. Long term investors should watch out at 1000 levels but be wary of its bearish outlook. It can trend lower from 1000 also if the overall sentiment remains negative. The down targets in medium term could be up to 750.

INFOSYS: It would be the favourite of long term investors though, currently it is also giving negative signals. Accumulation for long term below 1100 with final stop at 900 is suggested. No trading idea for this week.

19JAN TO 23JAN 2009

2009-01-18T16:08:00.002+05:30

There is no separate out look for India this week.

All the markets around the world are looking towards the U.S. markets -especially the DOW for a clue next week. Will there be an Obama rally or not? If we get a boost at current levels from this hope then this could be a turning point for medium term where we would have put in place a bottom at November lows and also get propelled beyond the recent peaks that are acting as formidable resistances.

U.S. DOW(8281): The hope of Obama rally could have helped this index to close above 8000 consistently, but the breach of 8000 implies that it needs to move lower in the medium term once again. There is a lot of talk about having found a bottom for this bear market and if it could rally from current levels then it has main resistance is at 8563 this week. Go long above here for target of 9175. But inability to close above 8400 soon will pull it down below 8000 and towards the lows of Nov 2008.

U.K. FTSE100(4147): Inability to close above 4315 early next week would be a cue to remain short for lower targets of 3800 in short to medium term. Resistance above 4300 levels would be 4385. Go long above 4385 for targets of 4650. But momentum indicators are lurking in the negative zone, similar to the DOW, which is a sign of continued downtrend.

JAPAN NIKKEI(8230): Inability to close above 8500 early next week would be a cue to go short for lower targets of 7600 in short to medium term. Resistance above 8500 would be at 8660. Go long above 8660 for targets of 9500 levels. Momentum indicators on this chart also are in the negative territory, implying that it could also trend according to world markets only and not on its own.

CHINA SHANGHAI(1954): This index seems to have started trending up contrary to the world trend. Momentum indicators are also in the positive territory and trending up. Volume has picked up, signalling the interest of investors in this market. Some world participants could have started buying into this most talked about emerging market besides India. Yet, it would have to surpass the resistance at 2100 levels to prove this. Immediate support is at 1880-1920 band.

INDIA BSE SENSEX(9324): Inability to close above the levels of 9510 soon would be a cue to remain short and exit short term longs. Go long only on a close above 9850. On the other hand, a close below 9000 would imply continued weakness and then the index could trend lower towards the previous lows in short to medium term. Supports on the way down would be at 8500 and 8300 levels.

12JAN TO 16JAN 2009

2009-01-11T18:53:00.002+05:30

It is now hard to believe that all the accounting-sins are awash with the self-exposure of SATYAM. Who knows who's next in line because there must be many more still out there. It would not be wise to go discreetly about it and demonstrate only the salvaging capabilities. The venom should be drained from the system, sooner the better to restore credibility. The onus lies solely on the accounting firms besides regulatory authorities.
However, as said earlier in the posts, it would be unfair to point finger only at India because there were no strict accounting regulations all around the world that caused this recession also.

The mood is pessimistic though, the bulls still hoping for the uptrend to continue. But under the given circumstances, there is no likelihood of big buying by the Institutional investors thereby, not helping to move above the range beyond 10500 to maintain the uptrend.
Momentum indicators have entered into negative territory and pointing downwards. Many of the favourite stocks have breached their short term trend lines; implying that their uptrend is over.
The expected reduction in petroleum prices and initiating the earning season by INFOSYS on Tuesday next week, are the two triggers to be taken into account.
The proposed Obama stimulant has already invoked luke warm response in the face of more pain in the offing in the form of deteriorating earnings and economic data.
To sum it up all, the uptrend would require big positive triggers that are not anywhere in the sight.

TECHNICALLY
If the sensex/nifty manage to close above 9720/2940 then there could be another attempt towards 10500.But it would rather be wise to accumulate put options(Feb series) with every rise above 3000 on nifty keeping a stop loss at 3150. Going long would require more watchful eyes.

On the other hand, if the sensex/nifty give a close below 9140/2750 then exit longs and remain short for lower targets upto 8500/2600. The trend would have changed to downwards below 9140/2750 with a probable support at 9000. Yet a reversal from below this level would be short lived.

WELCOME 2009!

2009-01-04T12:41:00.004+05:30

There could be a good start on Monday on the back of the stimulus package announced last Friday, besides strong cues from the world markets. But we are faced with strong resistance band between 10700 and 11000 on the SENSEX and between 3150 and 3250 on NIFTY.

Low volumes and declining Open Interest in derivatives segment point towards a lesser hope of a sustainable rally in the near future. Investors are sitting fingers crossed over the impending quarterly results and short term traders are booking profits in longs at current levels. In such a scenario it is a mood of lesser enthusiasm though, the element of surprise is a peculiar characteristic of stock markets. So, it would be a surprise if move above 11000 on Sensex in the near term. Currently the BSE SENSEX is at about 10000 levels and it is only 1000 points away from that crucial medium term trend deciding level of 11000(NIFTY 3250).

TECHNICAL LEVELS:
Resistance band for this uptrend is 10700-11000 for Sensex and 3150-3250 for Nifty.
Uptrend continues until the SENSEX holds above 9150(medium term stop loss).
Stop loss for long holdings would be 9500(Short term stop loss).
Fresh longs above 10320 only. Upper Target 10950.
Inability to move past 10200-10300 band would be a cue to go short for lower tartget 9500.

Please remember that if there is going to be a rally above the given resistances, it would be a bear market rally that could fizzle out any time. Maiximum target for such a rally would be 12000 on Sensex and 3500 on NIFTY.

Please also keep a watch on updates from time to time.

2008-12-02T17:51:00.002+05:30

Markets are at a juncture where weekly outlook would not be very helpful. Market participation has reduced and a range-bound movement at lower levels is anticipated. Stock picking with very long term perspective is being suggested with every fall.

This is not to say that capitulation is over. There can be another bout of selling because the consensus is that the bottom is not in place yet. The worry is not about the selling but the time scale. In other words, we have moved ahead from denial phase to the fear phase. This fear phase could cause another bout of large scale selling...but when? There is no answer to that!

Small relief rallies would take place intermittently.

In the given scenario, there would only be updates on daily basis until markets stabilise.
Please keep a check with updates.

QUARTERLY BREAK

2008-11-08T17:44:00.007+05:30

A break is much needed and desired after four months of mind whirring calculations! Yet, for the sake of the readers of this blog, the outlook would be published on daily basis from time to time on updates for a couple of weeks.
Therefore, please keep a check on UPDATES from time to time.

Thank you!

NIFTY/SENSEX OUTLOOK: 03NOV TO 07NOV 2008

2008-11-02T15:34:00.003+05:30

NIFTY/SENSEX did make a robust up move last week but things are still uncertain.

Current levels are 2886(9788). Technically, if there is a weekly close above 3255(10750) then it would be a positive signal for medium term. But it seems unlikely until there is sustainable close above 3115(10280). A reversal from/below 10280 area (is quite likely) can pull these markets down once again. The favored view is that markets could open with a gap up on Monday but the negative cues, if any, from Asian or European markets could kill the enthusiasm by the closing hour. Immediate support is at 9040.

The real play of technicals is on the down side. If markets give another close below 2595(8800) levels then brace for another bout of down fall towards new lows in the area of 1700(6000) levels in medium term. On the other hand, a halt above 2650(9000) levels would be an indication of forming a sustainable trough in this area for medium term and even longer term, perhaps!

A sideways market in the near term may not be a signal of forming a trough but preparation of another downfall if 10750 on the upside is not overcome. And also that things would not improve very much until 12500 is crossed over. In all circumstances, we are in a bear market and eying the levels of 15000 in the next 2-3 months would be too much optimistic.

GLOBAL WATCH 03NOV TO 07NOV 2008

2008-11-02T15:32:00.000+05:30

Here is a broader outlook for the world markets this week. Please watch out for the words like near, short, medium term etc.
Also please keep checking every day with updates, if any.

JAPAN(N225) and HONGKONG(HANGSENG) moved up to their upper limits and now have started moving down again. Near term is neutral but in the short term, it is likely that they might hold their recent lows if keep declining further from current levels. But the Long term is still down.

U.S.(DOW) and U.K.(FTSE100) are just hanging on to their upper limits as per our outlook last week. But they need to give another weekly close above these levels to turn things positive for the medium term. Near term is neutral and in the short term these indexes might hold above their recent lows if start declining from the current levels. Whatever the outcome of presidential elections, the Long term still remains down.

INDIA(SENSEX) and CHINA(SHANGHAI) have different ball game now. Their long term growth story is still intact but technically, short to medium term is still negative unless they also give a robust upside close this week, which looks unlikely, at least for CHINA.
Fundamentally, China's over dependence on exports is a matter of concern for this economy until the western economies improve.

In spite of liquidity injection by Reserve Bank, India could remain affected by the credit crunch besides its domestic elections season over the next 6 months. The economic reforms would have to wait until then. There could be resumption of bull trend after that if the U.S. (S&P 500) does not give a close below 770 by then because that would be a clear signal of an impending mother of all bear runs for the world markets.

TRADING TIPS 03NOV TO 07NOV 2008

2008-11-02T15:31:00.001+05:30

There are too many ifs and buts to say something about the stocks we discuss here every week. A number of resistances are on the way up but supports are lesser on the way down. Even remaining in a sideways mode in a small trading range would be of great relief.
Therefore, it would be prudent to wait this week and watch how things pan out over the next few days. There would be trading calls on updates, if any, from time to time!

The existing short term Long Positions may be squared off on every rise. Short positions could hold with an appropriate stop loss because things have not turned very positive, so to say! Markets could remain very volatile with negative bias over a couple of weeks more.

To sum it up, it is presumed that markets may trend lower soon unless there is one more weekly close with good gains.

WEEKLY OUTLOOK 27OCT TO 31OCT 2008

2008-10-26T16:51:00.006+05:30

S&P CNX NIFTY (BSE SENSEX)

3254(10750): Near term outlook turns positive only on a close above here. But moving upto here would be a herculean task for the markets and therefore, looks unlikely soon.

2972(9900): Markets would be under pressure to make new lows again if fails to move above here. Go short if fails this resistance.

2584(8701): Current levels.

Supports: There are immediate supports at 2525(8565) and 2300(7650) area. But the long term investing may start in bellwether stocks on a decline below current levels.

Where the markets would stop below the current levels is still a matter of debate. But it is likely that it should hold long term supports somewhere between 1900 and 2100(6000 and 7000) in a worst case scenario.

GLOBAL WATCH: 27OCT TO 31OCT

2008-10-26T16:43:00.003+05:30

GLOBAL WATCH LIST FOR THE WEEK

The support levels given below are far below the current levels(except in Japanese N225). Markets are expected to build support/troughs above or around those levels. Things are more likely to remain under pressure until the upper outer limits (given below) are breached.

U.S. DOW(8379): In the worst case scenario the outermost support is in the band between 7400-7500. (Upper outer limit is 9306).

U.K. FTSE100(3883): Outermost support in the band between 3300-3400 should hold in the medium term. (Upper outer limit is 4350).

JAPAN N225(7649): Just holding above its crucial support of 7600 is not a positive signal. On a breach of this support, it would be headed towards 6850. (Upper outer limit is 9360).

HONGKONG HANGSENG(12618): should hold the support at 11000 levels in medium term. (Upper outer limit is 14000).

CHINA SHANGHAI(1840): Breach of support at 1800 would drag it lower towards 1600 in medium term. (Upper outer limit is 2000).

TRADING TIPS: 27OCT TO 31OCT

2008-10-26T16:40:00.003+05:30

SHORT TERM TRADERS ARE ADVISED TO GO FOR OPTIONS ONLY, IF THEY MUST!!! OTHERWISE, STAY AWAY FROM FUTURES UNTIL VOLATILITY SUBSIDES.

RELIANCE(1019):
Got beaten black and blue last week as expected and moved down below its crucial support at 1248. Now it should consolidate in the range between 800 and 1000 for a few weeks or more, depending upon the sentiment of the markets.
In case of a rise from present levels it faces resistances at 1207 and 1425. On the other hand, on a further decline it has supports at 988, 941 and 925.
It is more likely that it may hold above 800 in case of further deterioration. Therefore, long term accumulation in this stock is expected in the band between 800-1000, only if falls further.

SBIN(State bank of India) 1165
This stock also couldn't hold its crucial support at 1250 and made a low at 1100.
Favoured view is that it could remain in a range of 1000 to 1500 for quite some time now.
Expect supports at 1000, 965 and then 900 in case of a further decline. Below here, this stock would also attract long term accumulation with stop loss at 684.

INFOSYSTCH(1246)
It did not budge much amid this mayhem and closed the week with gains.
It is also likely to remain in a range of 1100 and 1425 for a few more weeks. Yet a close above 1425 could take it to 1500 levels again. Immediate support is at 1040 but longs could hold with a stop at 1100 on closing basis.

In view of a three sessions' week, there is no buy or sell call specifically. However, Diwali being the traditional buying day for retail investors, there would be a special session of one hour only on Tuesday, the 28th October. It would be from 6.15 p.m. to 7.15 p.m.
Therefore, one could look for an opportunity of buying the above mentioned bellwether stocks for muhurat trading.
These stocks have been beaten down to attractive levels for long term investing. But only cash buying for long term is advised for muhurat sake only. Other large trade setups could wait until markets stabilize.

INDEX OUTLOOK 20OCT TO 24OCT 2008

2008-10-19T18:43:00.005+05:30

For Long Term Investors: The need of the hour is not to rely more on the TECHNICAL but on FUNDAMENTAL analysis, because many scrips have breached their long term supports or are likely to do so if sentiment remains negative. A recovery from below crucial support levels could take more than expected time quite often.

For Short Term Traders: The consensus is on a relief rally on the basis of technical indicators and the oscillators in oversold zone but... markets normally do not move according to the consensus! It can remain in the oversold zone for weeks together. So, go for NIFTY OPTIONS in November and December series, if you must and only if you are familiar with derivatives. High volatility could bring good gains for savvy options traders in such market conditions.

Also, please keep a watch on updates from time to time, if any!

WEEKLY OUTLOOK FOR NIFTY (BSE SENSEX)

3525(11560): A close above here is needed to turn the sentiment positive for short term.
3420(10895): Inability to close above this level would pull the index down again.

3074(9975): Current levels. Markets halting at or near its support is not a positive signal. Yet, a rise above here early next week could be a good omen for near term.

2940(9700): Markets could touch these levels soon.
2850(9400): An attempt could be made around this level to build a trough in this area.
2600(8800): Negative sentiment can bring down the markets to this level as well.
Though seems unlikely in the short term, a close below here would require review, particularly of the time scale for this bear market.

20OCT TO 24OCT 2008

2008-10-19T13:04:00.004+05:30

WEEKLY OUTLOOK FOR WORLD MARKETS ETC.
(The levels given below are only an outcome of a technical analysis. Considering the prevalent sentiment besides high volatility, these levels may or may not be achieved ever. Also keep a watch on the words like near, short, medium and long term).

U.S. DOW (8852): Downward pressure is likely to continue. Breach of 8500 on downside would be an indication that the recent low at 7800 levels would not hold in the near term. Then it would be headed towards 7000-7200 levels where considerable buying pressure could emerge. (Short term negativity is mitigated only if there is a sustainable close above 9925 levels, which looks unlikely soon).

U.K. FTSE100 (4063): Made a new low at 3808 last week. Downward pressure is apparent on the charts. Failure of 3808 would drag it towards the band between 3400 and 3300. Expect some buying pressure in this area. (Though unlikely, the short term negativity is mitigated only on a sustainable close above 4550).

JAPAN NIKKEI (8694): By moving little higher last week, this index seems to have made some more room for a sympathetic decline with the expected decline in the world markets. It is likely to decline towards 7600 in the short term, where buying pressure could emerge. (Though unlikely in the near term, a sustainable close above 9600 is needed to make things positive for itself in the short term).

HONGKONG HANGSENG (14554): It is also likely to breach its recent lows at 14400 levels. Then it would be headed towards 11000 levels with some midway support in 13000 region. (Short term negativity is mitigated only on a sustainable close above 17150).

CHINA SHANGHAI (1931): Its dependence on exports to western markets is weighing heavy on this market. It is likely to breach its recent low level at 1800. Then its medium term target would be 1700 and then 1600.

GOLD: Moved below the psychological support at $800 and our stop-loss triggered. More likely to remain subdued in short term. A breach below $740 would help take out support at $700 and this would drag it lower towards $600 in short to medium term. Long term target of $1000 and then 1200 is still intact unless $500 is breached.

EURUSD: Loitering at lower support levels. Breach of 1.325 on the downside would offset more weakness in Euro and move further down towards 1.30 and even 1.25 in near to medium term. A close above 1.355 could bring some relief in the short term.

CRUDE OIL: Some buoyancy is expected in the near term in view of the OPEC meeting scheduled next week. Medium to Long term down target is $50.

ECONOMIC DATA: Needless to say that the U.S. economic calendar(below) would be watched every day for all the negative news rather than the positive ones. It is so because positive news in the recent past did not turn the tables rather the slightest negatives caused sharp cuts in equity markets.

TRADING TIPS 20OCT TO 24OCT 2008

2008-10-19T13:02:00.002+05:30

RELIANCE(1306): Opinion is negative with sell mode.
Things do not look encouraging for this stock in short to medium term.
Immediate resistances for the week would be 1433, 1478 and 1523 but the signals are pointing towards more downside. A close above 1478 is needed this week to turn things positive for itself in the near term though, medium term would still remain negative until gives a close above 1850. A close below 1248 would be fateful for this stock. Then it would be headed towards the band between 950-850 medium to long term.

SBIN(1419): Opinion is neutral with positive bias.
Some negative divergence is starting to appear in momentum indicators but it still has sufficient strength left to maintain its 1250 levels on closing basis. Immediate supports are at 1400, 1348 and 1181. But a close below 1348 would imply that it could remain sideways between 1200 and 1600 for a few more weeks. On the other hand, a close above 1590 would take it to 1800 levels in medium term. Existing longs should hold with stop at 1250. Fresh longs be initiated only on a close above 1590 or on a rise from lower levels of 1250.

INFOSYSTCH(1203): Outlook is sideways within a range of 300 points.
Quarterly results were up to the expectations that there is still sufficient steam left in this counter though, for a long term perspective. But for near to medium term it is springing up mixed signals on the charts.
Immediate support is at 1182 and then 1040. But it should keep closing above 1100 levels to remain neutral and buoyant. Otherwise, a close below 1100 would drag it lower towards 950 levels. On the upside 1415 would be its upper range for short term.

WEEKLY INDEX OUTLOOK: 13OCT TO 17OCT 2008

2008-10-12T18:26:00.002+05:30

S&P CNX NIFTY (BSE SENSEX)

Near Term and Medium Term, both are very negative.

3620(11503) Resistance. Surpassing this resistance would be a great achievement but...?
3510(11262) Resistance. Inability to move above here would be a cue to remain short.

3280(10527) Current levels.

3000(10000) Support. But a psychological support only.
2940(9700) Support. A short term trough is likely at this level. Though unlikely in near future, a close below 2900 would raise doubts over recovery in the long term.

2600(8800) This level would be in the reckoning in case the above support does not hold.

GLOBAL WATCH LIST: 13OCT TO 17OCT 2008

2008-10-12T18:17:00.001+05:30

WORLD MARKETS
(Please watch out carefully for the words like Near, Short, Medium and Long term etc. Misreading of these words can cause wrong speculation. Every care may be taken to understand the deliberately worded phrases below. A cursory look at these levels would not help).

U.S. DOW (8451):
Near Term:Resistances for the week are 8815, 9100 and 9400. Surpassing the second resistance would bring some relief for near term and a move towards 11000. Inability to do so soon would keep it under immense pressure to break the recent low at 7880.
Medium Term: A close below 7880 level would drag it lower towards 7000 levels where strong buying for long term could take place. But in the event of a close below 6940 would have much serious impact on recovery in the long term.

U.K. FTSE100 (3932):
Near Term: Resistances are at 4041, 4093, and 4145. Inability to move above 4093 would keep it under pressure to break the recent low at 3874.
Medium Term: In case of a close below this recent low of 3874, this index will trend towards the Year 2003 low levels of 3400 to 3300 where buying for a long term perspective could take place. On the other hand, a close below 3300 support would drag it towards 2900 levels.

JAPAN NIKKEI (8276): Likely to move down towards the Year 2003 low point at 7600. The count of resistances for this market are meaningless at this juncture. Expect some buying pressure at this lower level.

HONGKONG HANGSENG (14797): Inability to move above 15800 in near term would keep this index under pressure to breach the recent lows at 14400. Then a failure of support at 14000 would drag it lower towards 11000 levels.
In case of a failure of 11000, the medium term supports below 11000 levels would be at 8300.

CHINA SHANGHAI (2001): Holding on to its support at 2000 is not a positive sign. A close below 2000 would drag it to 1800 levels again. China's heavy dependence on exports to the Western countries, particularly the U.S. is a story in itself. A close below 1800 would drag it towards 1500 in medium to long term.

Gold: Existing short term long positions may keep a stop loss point at $800. Wait until the next call because some money from this precious metal seems to have moved towards equity markets on Friday.

EUR/USD: The USD could find support around 1.33 against EUR. But USD is expected to grow weaker in the long term.

CRUDE OIL: It is still in a primary downtrend. A breach of $70 on downside would take it towards $50 in medium to long term.
This weakness in oil prices and cooling of inflation could help India to recover the losses early comparatively.

TRADING TIPS: 13OCT TO 17OCT 2008

2008-10-12T18:14:00.001+05:30

RELIANCE(1528)
On closing below 1700 it didn't take much time to touch the lower levels of 1500 last week.
Near term trend in this stock is down.
In near to medium term it can edge lower towards 1310 with midway support at 1450 levels. Its negativity of short term is mitigated only on a close above 1800; but seems unlikely in the near term due to the prevailing sentiment.
Though, not likely so soon, if it gives a close below 1300 then the levels of 1000 would come into the reckoning.

SBIN(1352.5)
This stock has been bravely working hard to maintain its support levels. It stuck to its bastion in spite of a decline to 1181 on intraday basis. Keep holding the longs until it keeps closing above 1250 levels for the targets of 1570 and 1800. Resistances would be at 1400 and 1450.

INFOSYS(1225)
Made an intraday low at 1040 and recovered to close above its long term support at 1100 levels. Now it could be charting an upmove in the short term towards resistances at 1332, 1422 and 1512. Inability to move past 1332 and 1422 would be a signal of impending weakness for the long term.

WEEKLY INDEX OUTLOOK: 06OCT TO 10OCT

2008-10-05T16:18:00.005+05:30

S&P CNX NIFTY (BSE SENSEX)

4180(13500) Resistance. Though less likely in very near term, a close above here is required to turn the sentiment positive for near term.
4070(13200) Resistance. Failure to surpass this level would be a cue to remain short.

3818(12526) Current level. The index hovering just above crucial levels of 3800 and 12500 is a negative sign. A fall below here looks imminent.

3715(12135) Support.
3650(12000) Psychological support levels.
3450(11200) Possible target on a breach of support 3715(12135) above.

GLOBAL WATCH LIST: 06OCT TO 10OCT

2008-10-05T16:15:00.003+05:30

WORLD MARKETS
U.S. DOW (10325): Currently in downtrend. A close below 10200 would bring the next near term target 9750 into reckoning. Supports on way down would be 10100 and 9900. On the upside, resistances are at 10760, 10900 and 11000.

U.K. FTSE 100 (4980): Currently in an uptrend, but again faces the formidable resistances at 5420 and 5465. Since it breached its crucial support at 4850 last week and made a new low at 4671, technically it is more likely that it may not hold this new low and head towards 4300 support level in near to medium term. Inability to surpass the given resitances would be a cue to remain short.

JAPAN NIKKEI (10938): More likely to move down towards 10500 or lower in near term. Supports are at 10800 and 10600. Upside is capped around 12300 levels in near term.

HONGKONG HANGSENG (17682): Just poised at its support amid negativity, and likely to head down towards 16300 and 16000 levels in near term. Upside is capped at 20000 levels in near term.

CHINA SHANGHAI (2294): This market was on holiday the whole last week. It may wake to the prevailing weakness worldwide and follow suit. It is poised tad below resistance 2300. Supports are at 2115 and 2000. Failure of support 2000 would again drag it lower to 1800.

ECONOMIC DATA
The focus has shifted to the economic data especially, the GDP growth and Interest Rates; quarterly earnings season besides Trade Balance. The U.S. data for housing and employment would be keenly watched every week(see calendar below).

EUR/USD The volatility in EUR/USD is obvious due to the recent developments in the U.S.
No clear pattern is visible but it needs to breach 1.44 to cause weakness in the USD.

GOLD faced weakness due to the strength in USD. But gold would remain the favourite of long term investors in whatsoever weakness. Buy with stop at 800.

CRUDE OIL could remain subdued. A breach below $90 would drag it to $70 in the medium term.

TRADING TIPS: 06OCT TO 10OCT

2008-10-05T16:13:00.001+05:30

RELIANCE (1761)
Supports are at 1683 and 1647. Resistances would be 1960 and 2110.
A big deep cut last Friday itself speaks volumes about its negativity increasing week after week. In the short term it may rebound from any of the supports mentioned above, but a breach below 1700 itself would open the lower "medium to long term" targets of 1500 and 1300.

SBIN (1484)
Strangely, this stock tried to remain in an uptrend most of the time. Yet, it needs to surpass the levels of 1527 and1620 to head towards 1700 and then 1850. It has supports at 1460, 1440 and 1419. But the support at 1300 levels would be considered the last hope of short term traders. Accordingly, the traders may trade long in this stock (stop loss 1250) if and when the markets start moving up; more so above 1620.

INFOSYSTCH (1390)
Its quarterly results are due on 10th Oct this week. Weakness is apparent in this stock chart. It has resistances at 1500 and 1600 levels. A close above 1500 could bring some hope for the near term but...? Watch out for an options strategy for this stock by next Thursday on updates.

WEEKLY OUTLOOK NSE/BSE: 29SEP TO 03OCT 2008

2008-09-28T15:13:00.008+05:30

Short Term Trend: Negative bias. Needs to close above 4325 to turn short term positive.
Medium Term Trend: Negative. Needs to close above 4725 to turn med term positive.
Long Term Trend: A long term correction is underway in finally a bull market.

S&P CNX NIFTY/BSE SENSEX
4320/14400 Resistance
4180/13800 Resistance. Inability to move above here would be a cue to short sell.

3985/13102 Previous Close

3775/12500 Support
3700/12350 support

CONCLUSION
The latest positive development in Indo-U.S. nuclear deal may also bring some cheer to the markets this week. But also keep a watch on resistance areas besides global trend - especially the Asian markets and FTSE.

(It will be a four days week; 2nd Oct being Gandhi Jayanti).

GLOBAL WATCH LIST: 29SEP TO 03OCT 2008

2008-09-28T15:10:00.003+05:30

WORLD MARKETS
U.S. DOW (11143): Faces Resistance at 11400 and 11750. Reversal from/below any of these levels would keep the down targets of 10000 open with a short term support at10600 levels. Though very unlikely in the near term, it ought to give 2-3 closes above 12150 in order to reverse the current primary downtrend.

U.K. FTSE100 (5088): Faces formidable resistance zone between 5350 and 5420 in near term. Surpassing this zone, it could move up to 5500 and perhaps 5650 but... noticeable weakness prevails! Medium term supports are at 5050 and 4850. Failure of 4850 would be ominous for this market.
Though highly unlikely in near to short term, it ought to give sustainable closes above 5800 to weaken its current downtrend.

JAPAN NIKKEI (11893): Short term uptrend faces resistances at 12400 and 12750. Supports are at 11600 and 11300. Failure of supports would pull it down towards 10000 in medium term.

CHINA HANGSENG (18682): Faces major resistances at 19000 and 21000. Supports in the short term are at 18500 and 16200. Failure of second support, though less likely in the short term, would be ominous for this market.

CHINA SHANGHAI (2294): Immediate resistance is 2300 levels, then major one at 2440. Supports would be at 2115 and 2000. Failure of 2000 would drag it to 1800 levels again.

GOLD, OIL & CURRENCIES
Gold($878): remains in a range below $920. Since it is consolidating below this crucial breakout level and investors also looking for a safe haven, it is more likely to move above $920 in near term and resume its upward journey towards its long term target of $1200. Crucial supports would be 825 and 800. Only a close below 800 would turn things negative for it.

Crude Oil($107): made a false move towards 120 last week to move down below 110, finally.
It has four levels of 90-100-110-120. It could whipsaw 100-110 levels this week. Breakout from outer ranges would determine the future course. But fundamentally, it is more likely to remain subdued due to the slowing growth. Long term targets are $70 and below.

EUR/USD(1.4587): USD is in a short term downtrend but the U.S. bail out plan could cause buoyancy in it in the near term and may touch supports at 1.44 and 1.43 and even 1.39 perhaps, causing weakness in EUR. But in the long term USD is likely to weaken and head again towards 1.60 against Euro. Weakness would be confirmed when 1.5 ceiling is broken on the upside.

TRADING TIPS: 29SEP TO 03OCT 2008

2008-09-28T15:06:00.002+05:30

RELIANCE(1963)
There is a hope until it holds 1900 levels. Existing longs may hold with a stop at 1890 for targets of 2040 and 2145. But the fresh longs may be initiated only on a close above 2150.
On the other hand, a close below the given stop loss would drag it to 1700 levels again. Medium term negativity is mitigated only on a move above 2400, which looks unlikely soon.
A long straddle(buying call and put of same strike) of strike 1950 is suggested. It costs around Rs.15000/- per set up.

SBIN(1435)
A stock, in howsoever strong uptrend, is bogged down by the prevailing pessimistic mood. Now, this week if it fails to move beyond 1500, it might also not hold the support at 1400. But as said earlier in previous weeks, it has a strong support above 1300 levels also.
A long straddle of strike 1440 is suggested. It costs around Rs.23000/- per set up.

INFOSYSTCH(1447)
It has more resistances than supports in the near to medium term. The rough idea is that it will have to move above 1675 to turn things positive for itself but...it seems very unlikely in view of the prevailing downward momentum in this stock. However, a failure to move above 1500 this week would drag it down towards 1300( medium to long term targets could be 1200 and 1100).
Short selling opportunity is possible according to the outlook above. Sell on rise with stop at 1521. Derivative traders can initiate a setup by selling futures and hedging that with a call option of 1500 or whichever nearby strike looks appropriate.

Nifty Futures' trading calls, if any, would be posted on updates from time to time.

The F&O calls given here are comparatively safe bets. But please note that only savvy traders need to trade in derivative calls because the trader herself has to track the set up, finally. It requires a lot of hard work to extract profits from F&O. A crude approach can cause considerable financial loss.

WEEKLY INDEX OUTLOOK: 22SEP TO 26SEP 2008

2008-09-21T20:45:00.004+05:30

Short Term Trend: the recent upswing does not mitigate the woes of ongoing downtrend immediately.
Medium Term Trend: has turned negative.
Long Term Trend: a correction is underway in finally, a bull market.

NIFTY(SENSEX)
Resistance Band between 4300 to 4350(14300 to 14450):
It is an important resistance band which needs to be surpassed soon. A reversal from this band would pull the markets down to previous troughs at 3800(12550) again. However, a move above here would be a positive sign and may help overcome the important breakout level at 4560(15100) to turn things positive for near term. Outlook would be updated on a close above this band.

4245(14042) : Previous Close

4090(13535): Support
3980(13145): support

3800(12500):
It is the Lower target in the event of a failure of the Resistance band above. A close below this would project targets of 3640(12000) in near term; and also lower ones of 3000(10000) in medium term.

In view of the prevailing circumstances in the markets world over, there is no specific observation this week. Watch out as the picture unfolds day to day. Just keep a watch on updates every day.

GLOBAL WATCH LIST: 22SEP TO 26SEP 2008

2008-09-21T20:42:00.002+05:30

Efforts to change the fundamental picture has not changed the medium term outlook for the markets. All the trends are still in downward mode and needs lot of efforts to surpass multiple resistances ahead. Alternately, the markets shall have to hold the supports, which is again very doubtful amid this atmosphere of selling due to fear. Everything is at the height of uncertainty in the markets. It is a short-term-traders' and scrapers' paradise but the long-term-investors' hell!

WORLD MARKETS
U.S. DOW(11388): Faces resistances at 11580, 11790 and 11870. Supports for the week are at 11070, 10940 and 10815. It needs to break the ceiling above at 12130 to reverse the prevailing downtrend. Otherwise, the tendency would remain to trend down towards 10000 levels.

U.K. FTSE100(5351): Resistances are at 5377, 5420 and 5650. Though very unlikely, it needs to break the ceiling above at 5800 to turn things positive for itself. Supports for the week would be 5106 and 5045. Failure of 5045 would drag it lower to 4800 levels again.

JAPAN NIKKEI(11920): making an attempt to move towards 12300. But more likely to move down towards 10000 levels in days ahead. Supports on way down would be at 11700, 11625 and 11550.

CHINA HANGSENG(19328): Faces resistances at 19525 and 20840. Reversal from any of these resistances would drag it lower towards the supports at 18000 and 17440. Failure of second support would drag it lower to 16000 levels.

CHINA SHANGHAI(2075): Faces resistance at 2220. Though unlikely, it needs to move above 2380 levels to turn things positive for the near term. Supports are at 1970, 1935 and 1906. Breach of 1900 would drag it lower to 1800 once again.

INDIA BSE SENSEX(14042): Faces resistances at 14300 and 14450. Supports are at 13500 and 12550.

CURRENCIES, GOLD & CRUDE
Near term is very unclear in the face of sudden changes taking place fundamentally.

EUR/USD may remain range bound between 1.39 and 1.50 in medium term. But there would be a lot of focus now on the movement of USD in weeks ahead.

GOLD is expected to remain in a range between $820 and $920. A firm breakout on either side is needed. However, buoyancy is expected as investors search for a safe haven.

CRUDE OIL is also expected to remain in the range of $90 to $110 this week.

In the changing scenario of financial landscape, it would be watchful period in terms of various economic data. The focus now would be on Inflation, unemployment and quarterly earnings in weeks ahead. Keep a watch!

TRADING TIPS: 22SEP TO 26SEP 2008

2008-09-21T20:37:00.001+05:30

RELIANCE (2055)
Faces resistances at 2070 and 2144. A reversal from any of these levels can pull it down again towards 1765. Short sell on reversal from any of these levels for the targets of 1900 and lower.
Buy only on a close above 2150 for short term target of 2250 and perhaps 2375 also.

SBIN (1566)
It is still in an upbeat mood. On surpassing the near hurdle at 1639 it could achieve targets of 1700 and 1760/1770.
It is still a buy on decline up to 1435 levels with short term trading stop loss at 1400 and short term investing stop at 1300.

INFOSYSTCH (1625)
Faces resistance band between 1650 and 1700. A failure to surpass this band this week would be a cue to short sell it for targets of 1500.
The volatility in US dollar has upset its billing structure and its quarterly results are awaited anxiously early next month. However, it still remains the pride of Indian IT sector among others as well.

NIFTY FUTURES
Please trade according to the levels given in Weekly Index Outlook and/or as per the calls posted on UPDATES from time to time, if any!

Please Note:- The details given above are mainly to acquaint you with near to medium term trend in the stocks. But as the picture unfolds every day, fresh calls, if any, are posted on the updates.
Therefore, you are requested to keep a check on updates every day. Moreover, one should also trade in tandem with the prevalent market sentiment.

Wishing You a Happy Trading Week!

WEEKLY INDEX OUTLOK: 15SEP TO 19SEP 2008

2008-09-14T15:15:00.006+05:30

Short Term Trend: Sideways with negative bias.
Medium Term Trend: Sideways with positive bias.
Long Term Trend: A correction is underway in finally, a bull market.

NIFTY
4560 Resistance. Now it requires a lot of positive sentiment to surpass the level this week.

4420 Resistance. Reversal from this area would be a signal for moving down to previous lows.

4380 Resistance. Inability to move past here would pull the index downwards in near term.

(4228 CMP or previous close):Reversal up from this zone would keep the higher targets of 4700 and 5000 in play for near to medium term.

4200 Support. A breach below here could cause frustration among the bulls in short term.

4115 Support. The index could make a foray little below 4100 also. But as long as 4100 is held on closing basis, the hopes of trending upwards soon would remain high.

CONCLUSION
Uncertainty is the buzz word for the week. It would require a lot of 'booster' shots now to propel the markets beyond upper resistance. Negative divergence in Asian Markets and conversely some positive divergence in Western Markets is a dilemma. It is a tug of war but more in favour of Asian weakness, perhaps!

GLOBAL WATCH LIST: 15SEP TO 19SEP 2008

2008-09-14T15:10:00.003+05:30

WORLD MARKETS
U.S. DOW(11422): seems to have built support at 11000 for near term. Faces resistance at 11550 and 11700 levels. Short Term is sideways with negative bias. Medium Term is unclear until it moves out of 11000 and 11800 range. Long Term is still bearish.
(Only a failure of 11000 on downside would drag it lower in medium term).

U.K. FTSE 100(5417): did not breach support at 5100 levels. Now seems to be headed up towards 5600 levels in near term. But it is a cautious optimism because a reversal from current levels can drag it lower towards 5100 again. Long term is still bearish.

JAPAN NIKKEI(12215): Just hanging above its crucial support of 12000 which is more likely to be breached. A fall below 11700 would push it down towards 10000 in weeks ahead. Weakness persists!

CHINA HANGSENG(19353): Has a support at 19000 levels. Breach of this support will pull it down to 16000 levels in days ahead. Selling pressure continues.

CHINA SHANGHAI(2080): continues to move down towards 2000 levels in the near term. It is the most battered among the lot; it peaked at 6100 just last October; a whopping 4000 points cut.

CURRENCY
US dollar(USD) gained strength as it breached 1.43 level against Euro(EUR) and touched the levels of 1.39. It is currently at 1.42 and is likely to remain buoyant in the medium term. Faces resistance on the upside at 1.44 and 1.50. It could head down towards 1.30 or lower against EUR in medium to long term, causing more weakness in Euro and other currencies. This strength in USD causes weakness in Gold and Crude oil.

CRUDE OIL
Crude oil price is buoyant due to hurricane Ike. Later, it is likely to breach $100 firmly and enter into a primary down trend. But, as said earlier, it may just cause a momentary jubiliation in the markets because this primary down trend would be a confirmation of slowing economies.
(Emerging economy like India benefits from this fall in crude price in the long run eventually).

INFLATION
Still a major cause of concern for all the economies, particularly the U.S. and the U.K.
Indian inflation figures are signaling some cooling down but... keep a watch!

GOLD
Breached the crucial medium term support at $ 770. Now the next target and firm support is at $ 700. Yet, a breach of this support would take it to $650 in weeks ahead.
All non-agricultural commodities are under pressure. But this could be of help only in the jugglery of inflation figures.

ECONOMY
Inability to find solutions soon to Lehman Bros' (a financial institution of repute) woes is a pointer towards the uncertainty of overall financial health.
Anyway, amid this rising inflation, the U.S. FED interest rate decision scheduled for Tuesday would be an important date!

Indian IIP(industrial production) numbers declared last Friday were more than satisfactory but the markets ignored that all as selling pressure continued. This is an indication of prevalent fear and uncertainty about growth in the economies all over.

TRADING TIPS: 15SEP TO 19SEP 2008

2008-09-14T15:06:00.002+05:30

RELIANCE(1933)
Signs of weakness are emerging in this stock and is also poised above the crucial level of 1900. A close below 1920/1900 would imply more pain in the offing and it could move down to 1700 levels in near term.
However, on sustaining above current levels or above 1900 would keep it buoyant with resistances at 2100, 2150 and 2200 in the near term. Trade accordingly.

SBIN(1514)
It is still the sturdiest among the lot from trading and short-term investing point of view. Short term traders could buy it on declines at support levels around 1450, 1420 and 1400 with stop loss placed at 1390. Short term Investors' stop is 1300. Targets would be 1650 and 1850 in near to medium term.

INFOSYSTCH(1644)
It made a big, long red candle on the charts last week turning things iffy for this stock. Now it has a laborious task of moving past the levels at 1800 to turn things positive for itself. On the way up, it has resistances at 1700 and 1740. Go short if fails to move above 1700 this week.
Supports would be at 1600 and 1580 levels in the short term. Breach of the second support would be an indication of impending weakness in the offing.

NIFTY FUTURES
Please trade according to the levels given in Weekly Index Outlook and/or as per the calls posted on UPDATES from time to time, if any!

Please Note:- The details given above are mainly to acquaint you with near to medium term trend in the stocks. But as the picture unfolds every day, fresh calls, if any, are posted on the updates.
Therefore, you are requested to keep a check on updates every day. Moreover, one should also trade in tandem with the prevalent market sentiment.

Wishing You a Happy Trading Week!

"WEEKLY INDEX OUTLOOK": 08SEP TO 12SEP 2008

2008-09-07T09:01:00.006+05:30

Short Term Trend: a breakout from either side of the prevailing narrow range is expected amid a likelihood of high volatility this week.

Medium Term Trend: sideways with positive bias. Global trend may prevail upon all, lastly.

Long Term Trend: a long term correction is underway in finally, a bull market.

NIFTY

4650: Resistance/breakout level and a probable target 'if' the trend turns adequately positive.

4565: Resistance zone and target.

4525: Probable Target.

(4352 CMP)

4265: This support may hold if the slide down is gradual. But may not hold a sharp fall. It is also a probable reversal area for markets.

4200: This support may hold amid sharp fall. A probable reversal area also. Short term traders may remain cautious about the market sentiment at this level.

4100: Medium term remains positive until this support holds. Stop Loss for LONGS.

BSE SENSEX

15550: Resistance/breakout level and a probable target 'if' the trend turns adequately positive.

15230: Resistance zone.

15120: Probable target.

(14483 CMP)

14200: This support may hold amid a gradual fall. But a sharp fall may breach it. It is also a reversal zone for the markets.

14000: A crucial support and a reversal area as well. Signs of weakness emerge below this level.

13700: This support may hold amid a sharp fall. Stop Loss for LONGS.

CONCLUSION
After a breakthrough at Nuclear Supplier Group (NSG) meeting our markets may rise upwards in early part of the week.
Amid this world markets' weakness our markets did not show any signs of panic last week. But keeping in mind the impending weakness all around us, we may not keep a pace different from others very much.
There could be bouts of high volatility in near term. It is yet to be seen as to which way we breakout because there are signals of more weakness from Asian markets besides the US and European markets.
So, as they say, it is a moment of cautious optimism! Yet,the favoured view would be that this nuclear deal euphoria may help the supports to hold this weak, if not the breakout above 4650/15550.

"GLOBAL WATCH LIST": 08SEP TO 12SEP 2008

2008-09-07T08:53:00.010+05:30

WORLD MARKETS
All the major stock markets seem to have turned weak except India in the short term at least.

U.S. DOW(11221): faces stiff resistance in 11400 zone. It could breach the support in 10800 zone and slide down towards 10000 in days ahead.

U.K. FTSE(5241): contrary to the outlook last week, FTSE100 breached its crucial support at 5300. Now it is headed towards support 5100. If this support is also breached then next support zone is 4800.

JAPAN NIKKEI(12212): has turned weaker and is unlikely to hold support at 12000. Then it is headed down towards 10000 levels.

CHINA HONGKONG, HANGSENG(19933): has also turned weak and could be headed towards 16000 if support at 18700 is not respected.

CHINA SHANGHAI(2202): was already very weak and has also broken its lower support at 2300 levels. Now it could be headed towards 2000 in days ahead.

INDIA BSE SENSEX(14483): stands apart among the lot here in terms of strength in the short term. But still in a range between 13700 and 15500. Breakout on either side would determine the trend.

CRUDE OIL
It is hovering below its crucial level of $110. Though very unlikely, a rise above $120 only would surely be a cause of concern. In the short term, OPEC meeting on Tuesday would set the tone for it. But in view of the slowing growth signals all around, it is likely to breach $100 level in days or weeks ahead, confirming a downtrend in the long term.
It may be noted here that the fall below $100 may not help stock markets much in the long term because it would happen due to fall in demand eventually, confirming the recession!

CURRENCIES
US dollar(USD) has taken the centre stage from Crude Oil. It has breached 1.43 level against EURO which is a confirmation of impending strength in USD in medium term.

GOLD
Gold prices are also weakening due to the rise in USD. It may remain sideways with $770 as medium term support. In not very long term, it is likely to move down towards $700 due to suspected deflation in some major economies.

ECONOMIC DATA
There are more signs of economic slowdown emerging from the US, as well as U.K recently. The continuous rise in unemployment in the US has turned all eyes towards its overall economic data.
On financial side, there are some plans to bail out their housing-loan banks but that may not mitigate the problems of rising unemployment and inflation. Pressure is on containing inflation by raising interest rates, and that could put a squeeze on liquidity which offsets slowdown in economic activities and rise in unemployment again.
The big event this month would be the FED interest rate decision on the 16th.

For educational purposes, the US Economic Calendar has been added at the bottom of this page. But it is not necessary for a lay trader to focus much on every detail.
( In the calendar, read 'Vol' as volatility caused and 'Cons' as consensus/expectation).

INDIA SPECIFIC
With signs of inflation cooling and the recent breakthrough at the Nuclear Supplier Group (NSG) meeting may infuse more confidence among the Foreign Institutional Investors (FII's) in India and more investment for long term may come in the due course of time. But the medium term trend could be dictated by the global markets situation only.
However, our markets may react very positively in the early part of next week. Yet, overall it is a moment of cautious optimism in the near term!

"TRADING RECOMMENDATIONS": 08SEP TO 12SEP 2008

2008-09-07T08:51:00.005+05:30

RELIANCE(2081)
It reversed from 2281 peak last week but is still holding above its crucial support at 2050. Inability to move above the zone between 2150-2175 in near term would keep it under pressure to move lower towards 1900 levels. But, at the same time a reversal from 2000-2050 zone would keep it buoyant with a targets of 2250 or higher.
No fresh long calls at the moment. Just hold the existing longs as long as it remains above 2050. Otherwise, go short on a close below 2050.

SBI(1520)
This stock could be considered for "short term investing" if does not close below 1430 this week. Then the targets would be 1700 to 1900 in weeks ahead. Investors can buy on declines with stop loss at 1300.
Short term traders can consider going long on reversal from 1430-1400 levels with a stop loss of 1400.

INFOSYSTCH(1712)
Peaked at 1805 last week and moved down in sympathy with the markets. But it still has a fair chance of remaining positive in near term to medium term. Investors keep holding the stock with stop loss at 1600.
Traders may look for an opportunity on a fall around 1675 levels with stop loss at 1600. Medium term targets are 1800 to 1875.

NIFTY FUTURES
In combination of expected optimism due to NSG clearance with very weak signals from world markets, it is yet to be seen as to how markets pan out next week.
Therefore, calls if any, would be posted on updates (updated once everyday in normal circumstances).

Please Note:- The details given above are mainly to acquaint you with near to medium term trend in the stocks. But as the picture unfolds every day, fresh calls, if any, are posted on the updates.
Therefore, you are requested to keep a check on updates every day. Moreover, one should also trade in tandem with the prevalent market sentiment.

Wishing You a Happy Trading Week!

WEEKLY INDEX OUTLOOK; 01SEP TO 05SEP 2008

2008-08-31T08:15:00.016+05:30

Short Term Trend: An attempt is being made to turn upwards.
Medium Term Trend: Sideways with some positive bias.
Long Term Trend: The ongoing correction is expected to continue in finally, a secular Bull Market.

BSE SENSEX
15000: Resistance & Target. (Current Range Breakout Level). Otherwise, a reversal back from here, or from below this zone could pull us down towards 12500 again. So, a close above here is needed to turn the near term sufficiently positive.
14800: Resistance & Target. A close above here could help us achieve the next target above.

(Previous Close or CMP 14565)

14000: Support. But now, this could turn out to be somewhat weaker a support.
13700: Support! (Current Range Breakdown level). Bulls have a chance of speedy recovery until this support is respected. Stop Loss for short term LONG positions be initiated on a close below here.

NIFTY
4480: Resistance. (Breakout level). Read same as Sensex above.
4425: Resistance.

(Previous Close or CMP 4360)

4200: Support. This could also turn out to be a weak support now.
4115: Support! (Current Range breakdown level). Bulls have a chance until this level is respected. Stop Loss for short term LONG positions be initiated on a close below here.

CONCLUSION
Most of the world markets including ours, are trading sideways in a range with very little participation. Our range is from 13700 (nifty 4115) levels to 15000 (nifty 4480) levels. Therefore, we need to breakout of this range to make a decisive move in short to medium term.

But always remember that we are in a bear market and all the rallies have their limitation. Our current upside limit is 17000 for medium term. We are perhaps, trying to keep heart in a hope of some reasonable quarterly earnings next month. But the US (the UK also now) economic situation could keep playing villain for a longer time. Yet, the inflation and crude oil price could bring some respite for all in near future, perhaps (Please read the Watch List below).

Keep a watch on our daily UPDATES for fresh LONG or SHORT calls, if any. For the moment, we do not have any suggestion except that Existing short term LONG positions may be held as long as 13700(4115) is held.

WATCHLIST; 01SEP TO 05SEP 2008

2008-08-31T08:12:00.007+05:30

There is no use running after every news and look for a "kill" unless you are an insider.Tracking just this bare minimum, weekly updated watch list below should suffice to determine the future market trend. However, you can add news or info that are specific to the scrips you normally trade in. But keep it minimum possible.

WORLD MARKETS

U.S. DJIA (11544): Still consolidating in a range of 11200-11700. Immediate supports are at 11475 and then 11350. My favored view is that it could spend another week in sideways consolidation. Only a breach below 11000 levels would take to 10000 levels in weeks ahead -which seems unlikely soon. Upside is capped around 12000 levels in the short term.

U.K. FTSE 100(5637): Faces immediate resistance around 5730-5745. But the favoured view is that it could surge ahead to reach 6000 in days ahead. Supports are at 5550 and then 5475. Failure of supports can drag it down towards 5100 again.

JAPAN NIKKEI (13073): Faces resistance at 13120 and then 13230. Failure to move above here would drag it to 12600 and then 12000 levels.

CHINA HANGSENG (21262): Contrary to our view last week, it moved up across 21000 levels and is showing resilience. Surpassing of resistance at 21900 level would project higher targets of 25000 in days ahead. But a fall below 20800 would pull it down again.

CHINA SHANGHAI(2397): Had been able to maintain above 2300 last week. Needs to breakout of the range of 2300 and 2500 to determine a trend. It is the most battered among all the world markets but showing no signs of reversal either.

INDIA BSE SENSEX( 14565): Needs to breakout of the range of 13700 and 15000 to determine a trend.

CRUDE OIL
Though very unlikely, a move beyond $122-125 zone would again take it towards $150. But my favoured view is a reversal from this 122-125 zone to move down again to 110 levels after hurricane Gustav. Yet, a rising oil price graph could dampen the mood in markets next week.

INDIA INFLATION
The figures edged down a bit to 12.40 from 12.63 (tolerance level is below 6). Another down tick this week could bring a lot of optimism in the markets on Friday next. Any hope of inflation cooling down...is yet to be seen! Still the consensus is on uptick in interest rates in near future.

CURRENCY
US$ is unlikely to budge in near term; yet, remain range bound with positive bias. Oil will still play the main role in near term.

US DATA
Watching this on regular basis could be mind boggling unless you are a currency trader. But occassional peek at it is always useful. So, why not this week!
US markets are closed on Monday. They have Jobless data on Thursday. Hourly earnings, Nonfarm Payrolls and Unemployment data on Friday.
Also the UK-BoE and EU-ECB have interest decisions this Thursday. They also have inflation rising there. Lets see what these central banks have to say this time. Credit squeeze??

RECOMMENDATIONS; 01SEP TO 05SEP 2008

2008-08-31T08:08:00.005+05:30

The levels given here are applicable on "closing basis". So, plan your trades accordingly. Do not wait for a precise hit of target but square off well before targets without any heartburn.
We intend to give you the best possible outlook and strategy, but trading in markets is risky and we do not guarantee profits or take any responsibility for losses. Therefore, you may use your own discretion. Those who do not understand derivatives, may not trade according to our F&O calls.

RELIANCE (2136)
It edged lower to 2050 last week and bounced back. Now it could be moving towards 2175 or 2215 in near term. Failure to move past 2175 could pull it down to 2050 and 2000 levels again. Move above 2215 would take it to 2255 levels or higher. But it would still be a bear market rally with limited upside -a reminder to Reliance Fans! Trade accordingly.
The existing short term LONG positions may keep a final Stop Loss at 2050.

INFOSYSTCH (1749)
A narrow consolidation below its crucial resistance at 1750-1760 levels is a bullish sign. On a close above this band it could be the leader of the market in near to medium term.
Buy on a close above 1750 or on declines with a stop loss at 1635. Hold it for targets of 1800 and then 1875 in near term.

SBIN (1404)
Did not breach 1300 levels and moved up strongly on Friday. Now it could be headed towards 1500 and then 1575. Supports would be 1300 and 1250. existing LONG position may hold with a stop loss at 1250.

You must have observed that our stop loss levels are too far below the present levels. Keeping in mind the current overall trend, in the event of any fall, the markets have a good chance of retraction from lower levels (13700 of SENSEX and 4100 of NIFTY). In such a scenario, it is worth buying at lower levels and remain with the trend. Otherwise, wait for our calls (if any) from time to time given on UPDATES.

NIFTY FUTURES
We had given buy call in our Updates last Thursday. Keep holding on to those positions, and wait for our next bus to stop by you! In other words, recommendations if any, would be posted on UPDATES because there are none for the moment from us.

Wishing you a happy trading week!

WEEKLY INDEX OUTLOOK 25AUG TO 29AUG 2008

2008-08-24T12:02:00.006+05:30

Short Term Trend: Negative bias.
Medium Term Trend: Neutral.
Long Term Trend: A correction or primary downtrend underway in finally, a Long term bull market.

BSE SENSEX
Resistance 15120; and a probable target also. Near term turns positive above here. Otherwise, go short for targets of supports below, if reverses from here.
Resistance 14835; a probable target also. Go short for the targets of supports below, if fails here.

(Previous Close or CMP 14401)

Support 14000; a probable reversal area between 14000 and 13700; but signs of negativity also start below here.
Support 13700; hope for the bulls if this level is respected! close below here can drag markets to 12500 levels again.

NIFTY
Resistance 4525; and a probable target also. Near term turns positive above here. Otherwise, go short for targets of supports below, if fails here.
Resistance 4445; and a probable target also. Otherwise, go short for the targets of supports below, if fails here.

(Previous close or CMP 4327)

Support 4220; a probable reversal area between 4200-4100. Negative signs emerge below here.
Support 4100; Hope for the bulls until this level is respected. A close below here can drag markets to 3900 levels again and cause negativity for medium term as well.

CONCLUSION
Volatility is expected this week though, there is not enough participation to say very high. Markets' inability to show strength and Nifty closing below 4300 last week, seems to have turned short term trend negative and medium term neutral. In other words, both bulls and the bears are in a tug of war. The clearer picture for near term would emerge by this Friday, hopefully!

In the absence of its own agenda, our market seems to have been taking diktats from the US and the Asian markets(We might have our own agenda in the form of nuke deal and economic reforms in days to come). There was lot of optimism in the US markets due to falling crude oil prices and some soothing words from Mr. Warren Buffet -the greatest successful investor of our times. But the Asian Markets do not portray a hopeful picture in near to medium term. The euphoria of Olympics there might die down soon to remind the real picture of slowing growth. Similarly, the optimism in the U.S. could also be short lived because the housing market there has not shown any signs of bottoming out and the recession may confirm its presence in days to come.

Coming back to our markets again, we advise squaring off of the existing short term long positions with every rise as we expect markets to move up, "in early part atleast", this week, in view of the US optimism and falling crude oil prices (Please also see our watchlist for the week below).

Short to Medium term buying (cautiously) is recommended in the zone between 4250-4150 of Nifty. Stop Loss for all the Long possitions is a close below 4100.

We wish you a happy trading!
Please keep a watch on our daily updates every morning.

WATCHLIST 25AUG TO 29AUG 2008

2008-08-24T10:41:00.007+05:30

WORLD MARKETS
(U.S.) DOW (11628) Likely to move up towards the resistance levels of 11700-11800. But long term still remains bearish. On reversal, it would again head down towards 11000-11200 support band. Penetration of this support band would give it a landing at 10000 levels.

(U.K.) FTSE 100 (5506) rallied from its crucial support at 5300. Surpassing of resistance 5600, though less likely amid low volumes, would project a target of 6000 levels.

(JAPAN) NIKKEI (12666) breached its crucial 12900 level and now likely to move down towards 12000 in days ahead.

(CHINA Hongkong) HANGSENG(20393) breached 21000. Bearish connotations point towards a fall towards 17000 in days ahead.

(CHINA) SHANGHAI (2405) Continued bearish tendency can cause the breach of support at 2300 levels. Then headed towards 2000 levels in medium to short term.

(INDIA) BSE SENSEX (14401) is in negative bias in short term. If 14000-13700 support band is respected then short term uptrend may continue. But still in a primary down trend. It is a correction in a long term Bull market finally.

CRUDE OIL
Short Term Outlook: It reversed from the levels that we had expected in our UPDATES post of 21st August. Now it is again headed down towards $110 support. This support is also likely to be breached for a target of $100.
Medium to Long Term: Once the Beijing Olympics euphoria is over, demand for oil is expected to fall in China, the major consumer. This could help breach the crucial and technical trend deciding support of $100, offsetting the slowing of growth in China as well.

This falling crude oil price is only helping us to look sideways from the real problem i.e., the U.S. housing market. Falling oil price can not help much until housing bottoms out -the signs of which are nowhere to be seen, yet!

INFLATION
Recently there have been talks of some visible signs of inflation cooling down in the U.S.??
But here in India, it has surged up to 12.63 (tolerance level is below 6). Now economists are talking of its peaking at 14 instead of 13. Interest rates may be revised upwards if this situation continues. Credit squeeze?

CURRENCY
US$ weakened last week but may strengthen again. Crude and Dollar offsetting strength and weakness in each other, one by one!

INDIA SPECIFIC
Once the J&K tempers cool down, discussion of ecnomic reforms may hot up. But trade unions are also waiting for that moment to show their presence, though not being given special heed by the media. However, the Indo-US nuke deal may change the agenda for the markets by next month.

Wishing you a happy trading week!