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Tuesday, March 31, 2009

Reigning The Nifty-- 1st April,2009

Nifty Half Hourly Line Chart

Nifty Half Hourly Chart

Nifty Daily Chart

Yesterday I wrote,

"The half hourly charts shows the uptrendline of the rise from 2539. This has not been broken as yet and offers support at 2975-3003 levls for the day. One can go short on the break of this trendline with stop at 3055 which is resistance offered by down trendline from January highs."

Bullish Case
The trendline remained intact and the Nifty closed 42 points higher.The supports of this trendline is at 3009-3036 for tomorrow. The half hourly Line chart shows Nifty trading above the downtrend line from January 2008 highs, after successfully testing it on Monday. Supports this trendline offers is at 2947-2958. The Nifty is once again trading in a flag like formation, shown on 30 minute chart, which is bullish in an uptrend. Managed to close above the triangle formation on candle charts.

Bearish Case
Still trading within the triangle on Line Charts . The previous high of 3123 needs to be overcome. The January 2008 downtrend line needs to be scaled.Today's action was not robust enough to turn bullish . We will have to wait for a lot of confirmations.

Confusing , isn't it? No not my analysis , but the market action! Yes, we are at crossroads and the direction is not clear. So trade light and preferably via option spreads. Low profits but lower risks, which is important when we are at crossroads. Yes when we are crossing roads at crossroads it is better to wait and see whether the signal is Red or Green.

Take short trades if the uptrend line breaks down with stop loss at 3055. Take long trades on breakout from the flag formation with stop loss at 2950. All other levels are pointed out on the charts.

Happy Trading !!

Lakshmi Ramachandran

Monday, March 30, 2009

Reigning The Nifty -- 31st March,2009

Nifty Half Hourly Chart

Nifty Daily Chart

Teasing ! That is what the Nifty is doing. Teased the bears first and now the bulls. The triangle break out is false. The down trendline from January highs was too strong a resistance and Nifty has reacted strongly from there after touching it at 3123. Today's action was extremely bearish . Not once was there an attempt to rally. Supports on the daily chart are at 2866-2834. The 20dema is at 2863 and the 84 sma at 2834. This should be good supports.

Fibonacci supports are at 2900-2830-2762 shown on the half hourly chart. The 23.6% retracement level is already broken.. So if the 2900 levels which is 38.2% level does not hold, 2866-2830 should be good support as it has multiple support at those levels.

The half hourly charts shows the uptrendline of the rise from 2539. This has not been broken as yet and offers support at 2975-3003 levls for the day. One can go short on the break of this trendline with stop at 3055 which is resistance offered by down trendline from January highs.

Happy Trading !!

Lakshmi Ramachandran

Saturday, March 28, 2009

Reigning The Nifty --30th March,2009

Nifty 30 Minute Chart

Nifty Daily Chart

Daily Nifty Fibonacci Chart

The triangle breakout on thursday, 26th March was decisive with a huge white candle and a follow up buying on friday. This throws up a target of 3740 as discussed in the weekly update. But before getting too optimistic, we have to see the down trendline joining lower tops from January 2008 , scaled . This resistance stands at 3115 for Monday, 30th March. A series of resistances are there at 3147-3167-3240-3450-3740, all marked on the graph.

The oscillators have not shown any negative divergence and are showing strength inspite of being over bought. However huge negative divergences are seen on half hourly charts which may lead to intraday corrections. Moreover a rising wedge formation can be seen on the Line Chart, which is a bearish formation.

Immediate support is at 3035--triangle upper trendline .The fibonacci support levels are at 2987-2900-2833-2762.
Trade longs with appropriate stop losses as the time is ripe for a correction and don't trade short till a proper reversal is signalled.

Happy Trading !!

Lakshmi Ramachandran

Friday, March 27, 2009

Reigning The Nifty--- Week ended 27th March,2009

Weekly Nifty Chart

Last week I had mentioned that closing above 2812 would be bullish. The level was crossed on the first day of the week and there was no looking back. The nifty took a shot at the resistance of 3123 , which I had mentioned as the resistance offered by the down trendline from January 2008 highs, and closed almost at that level. All weekly oscillators are trading above their corresponding down trendline. This action is definitely bullish. This trendline is at 3070 for the coming week. So the close for next week should be above 3070 for further upsides.

The weeks action led to a breakout from the upper trendline of the triangle which now offers support at 3005. The height of the triangle is 740 points 3240-2500=740. Breakout point is 3000 . So target is 3000+ 740= 3740 .

The close of the week has also scaled above the trendline joining lows of January '08 and March'08 , which had been strong resistance since week ended 17th October '08. This trendline offers support at 2780 for the week.

If the nifty trades above the high of 3123 then next resistances are at 3147 and 3240 the previous two highs forming the upper trendline of the triangle. Fibonacci levels of fall from 4650 offer resistance at , 38.2%---3168, 50%--3450 and 61.8%--3740. The triangle target is 3740 which coincides with 61.8% retracement level. The 38.2 % level of the entire fall from 6357 is at 3830. So the 3740--3830 levels may be acievable but going beyond that level may be difficult.
Look to trade long if nifty does not break the 3070 levels with stop loss at 3000.

Happy Trading !!

Lakshmi Ramachandran

Thursday, March 26, 2009

Reigning The Nifty --27th March,2009

Nifty Half Hourly Line Chart

Daily Nifty Chart

Today's action must have left most traders breathless. The longs must have booked out early and the shorts must have sunk into a depression waiting for the markets to correct.

I wrote yesterday, "The half hourly chart shows breakout from a pennant, which is a consolidation pattern, signaling that the highs of the shooting star may be scaled. Moreover the resistance of 2970 has been overcome on a closing basis , clearing the path for the next target of 3147 which is the January 2009 top"

As anticipated, the breakout from the inside day pattern was on the upper side and has formed a large white candle.This action has also led to a brake out from the upper trendline of the triangular formation as shown on the charts. We have yet to see follow up buying to be sure that this breakout will not turn false like the breakdown from the triangle, earlier.

The half hourly Line chart shows breakout from the downtrendline connecting January 2008 highs with September 2008 highs. If this sustains then we can see an upmove of 1850 points .
The 'd' leg of the rectangular pattern has immediate resistance at 3090. If the resistance is honoured then we may see the 'e' leg down and a possible downward breakout. By looking at the Line charts we can gauge the real intentions of the market players as closing prices depict the "consensus" reached for the day. It helps us to get a feel of the market without the "noise".

The Oscillators have reached overbought territory on the daily charts. The oscillators on the half hourly charts have given negative divergence , but showing signs of moving up again.

Tommorow's action will be important as it is the last day of the week and any hesitation to carry over longs will bring profit booking , as the bearish overhang will still be lingering in the minds of traders.

Resistances are at 3090-3128-3147-3240 all marked on the charts. 3167 is the 38.2 % fibonacci level of fall from 4650 making it an important level to be crossed. Look for supports 2976-2982 which is today's low as well as the 23.6% retracement level of recent rise from 2539.

Weekly close above 2812 , as mentioned in my weekly post,
"the trendline joining January 2008 and March 2008 lows, shown by the dotted line , which has been stiff resistance since it was broken violently in October 2008, and the lower trendline of the triangle are both at 2812 for the coming week. So a closing above this level would be a bullish move , and a closing below this level would either have sideways moves or a fall."
will confirm bullishness for some time and higher targets.

Happy Trading !!

Lakshmi Ramachandran

Reigning The Nifty--further insight 26th March,09

Nifty 30 Minute Line Chart

The half hourly line chart shows the nifty moving in a falling channel since the beginning of the correction in January 2008. The height of the channel is 1840 points. The nifty is on the verge of breaking out from the channel. A decisive break would give a fantastic move of 1840 points. The level for today stands at 3018. So look out for the day's close above 3018 .

Happy Trading !!

Lakshmi Ramachandran

Wednesday, March 25, 2009

Reigning The Nifty --26th March, 2009.

Nifty 30 Minute Chart

Nifty Daily Chart

Today was an "Inside Day" meaning trade was within yesterday's trading range. This keeps the possibility of a reversal alive, as the high of the shooting star formed yesterday, has not been scaled. However, signs of bearishness which was so dominant since January 2009 are hard to find. The next month futures was trading at a 10 to 15 point premium for a good part of the day ! The 84 day SMA which i have been using as a long term indicator has been bullishly crossed once again , but this time the cross seems to be stronger and decisive. The stochastic is still in the overbought zone but has not given a sell. RSI(14) has not yet reached the overbought zone signaling more upsides are possible. The RSI has crossed the highs made in May 2008, which it was not able to cross since May 2008. Macd is strong above the zero line.

The half hourly chart shows breakout from a pennant, which is a consolidation pattern, signaling that the highs of the shooting star may be scaled. Moreover the resistance of 2970 has been overcome on a closing basis , clearing the path for the next target of 3147 which is the January 2009 top, of course provided the shooting star top of 3017 is crossed. RSI(6) -- which gives a good overbought / oversold indication in the very short term -- has started showing strength after reaching the oversold zone today morning.

So the possibilities of an upward move are quite strong. Resistances are at 3017-2040-3138-3147. the 38.2% retracement of fall from 4650 is at 3168.

Supports are at 2923-2914 lows of today and yesterday. Fibonacci supports to the rise from 2539 are at 2905-2835-2780-2724. The level of 2771 where the nifty took support last week coincides with the 50 % retracement level at 2780 . So expect the 2771-2780 levels to be good support. However if this level breaks we may see 2540 levels.

Look for direction on break of 3017 and 2914 , the high and low of the shooting star formed on 24th March,2009.

Happy Trading !!

Lakshmi Ramachandran

Tuesday, March 24, 2009

Reigning The Nifty--25th March,2009

Nifty Daily Chart

The Nifty rallied well since open of markets raising hopes of making a higher top. Though it surpassed the earlier minor top at 2970 which was resistance for quite some time now, the close could not conquer the same. The day's candle has formed a shooting star pattern which is bearish . A shooting star has
  • a long upper shadow which should be at least three times the real body
  • a small real body towards the lower range of the price action
  • a small or no lower shadow
  • price should have been in an uptrend
Only a close above the high of the shooting star will nullify it's bearish effects. So shorts should keep stops at the high of the shooting star.

The stochastic has started moving down from overbought territory signaling that prices are no longer closing near the upper range and a reversal may be on the way. The RSI(14) has still not reached overbought territory but has turned flat. Tomorrows price action should confirm whether the bearishness of the shooting star is for real.

Fibonacci supports to the rise from 2539 are at 2905-2835-2780-2724. The level of 2771 where the nifty took support last week coincides with the 50 % retracement level at 2780 . So expect the 2771-2780 levels to be good support. However if this level breaks we may see 2540 levels. Lets not think of further levels now. One day at a time is sufficient.

Resistances are at 2970-3017-3040-3145. 3145 is trendline resistance ( marked on chart) and 3147 is previous top. So this should be stiff resistance.

If still having longs then keep strict stop loss at 2900 and if short then stop loss at 3020.

Happy trading !!

Lakshmi Ramachandran

Monday, March 23, 2009

Reigning the Nifty -24th March,2009

Daily Nifty - Fibonacci levels

Nifty Daily Chart

On the daily chart, Nifty has sailed through the upper trendline of the falling channel. Now next major resistance is the upper trendline of the triangle at 3045. If this resistance is overcome on a closing basis, the nifty may be able to breakout from the downtrendline joining lower tops from January 2008 highs. Resistance from this downtrendline is at 3160 for today.

Macd has moved above zero line which is a positive . The RSI(14) is moving up strongly and has not yet reached the over bought zone. The stochastic is in overbought zone but staying above the 80 level showing strength.

The Nifty has retraced just about 23.6% of fall from 4650 from lows of 2250 . The fibonacci chart shows major resistances of which 3147 is an earlier top as well as the 38.2% retracement level of fall from 4650.So watch out for this level.

We can be positive on the markets with strict stop losses till we get enough proof of a sustained upmove .

Happy Trading!!

Lakshmi Ramachandran

Preparing for action-23rd march 2009

Nifty Half Hourly Chart

I had mentioned in an earlier post that the rise from 2539 was rather too steep and so we could expect sideways movement. That is just what the Nifty did in last two days moving between 2771 and 2822 and closed midway . The half hoursly chart shows a breakout from a pennant, which is a consolidation formation. So one can remain long with a stop loss of 2770 or 2740.

Lakshmi Ramachandran

Sunday, March 22, 2009

Technicals for 23rd March,2009

Nifty Daily Chart

The triangle breakout seems to be under threat as the nifty, though just marginally, has closed above the lower trendline of the triangle. The 2807 levels is really important now. Trading above or below it will be the decider for taking positions. It is the intersection of the the lower trendline of the triangle and the upper trendline of the recent channel in which the nifty is trading since January 2009.

The two dojis formed in the last two days shows waning upward momentum. Also the upper trendline of the channel has proved stiff resistance and inspite of good momentum since bottom at 2539, the breakout from the channel failed. Momentum indicators also show weakening before reaching oversold levels indicating the rally was just a corrective one.

Resistance is at 2845-2850 which is 50 % retracement levels of fall from 2970 to 2539 and 2850 is resistance of trendline , shown in green in the chart, joining January and March 2008 lows. If this resistance is crossed then we have next resistance at the 61.8% level at 2920 and the earlier top at 2970. So a host of resistances to overcome.

Fibonacci supports are at 2766-2724-2690-2652.

By the way the 84 SMA on daily charts which I have referred to earlier as a stiff resistance to upmoves is at 2816. Trade via option route if you have to as direction is not clear. Also settlement week has its share of excess volatility.

Happy Trading !!

Lakshmi Ramachandran

Weekly Nifty Technicals --20th March,2009

Weekly Nifty Chart

Last week I concluded,

The past two weeks candles have formed an "Inside Pattern". So we could look for direction on the break of the high at 2764 and low at 2539.

The nifty traded towards the high of the range mentioned above , during the week , and closed above 2764, at 2807. The RSI (14) is moving up after showing positive divergence. MACD too has been in buy mode since 26th December,2008. The Nifty therefore, seems to show some strength on the weekly charts.The breakout though, is not very impressive as the resistance of 2806 has not been crossed convincingly.

We must remember that we are in a bear market and wait for the confirmation of a higher top higher bottom confirmation before getting very bullish. The resistances are, 2812-2836-2970-3020-3123 all shown on the charts.

Looking deeper at these resistances, I find that, the trendline joining January 2008 and March 2008 lows, shown by the dotted line , which has been stiff resistance since it was broken violently in October 2008, and the lower trendline of the triangle are both at 2812 for the coming week. So a closing above this level would be a bullish move , and a closing below this level would either have sideways moves or a fall.

Supports are at 2700 which is the week's low and 2592 which is the support of trendline from October lows , which if broken could take us to the triangle targets of around 2000.

Wednesday, March 18, 2009

Nifty Technicals for 19th March,2009

Nifty 30 minute Chart

Nifty Daily Chart

The resistance of 2800 -2840 which I mentioned yesterday has proved difficult to overcome. This keeps the triangle pattern breakout alive and valid. The rise from 2539 has been very steep. So a sideways movement is possible for some time. The 2800 - 2820-2840 is very strong resistance . Failing to cross may trigger a fall. The 20 dema support is at 2728. The daily oscillators have not shown any weakness as yet.

The 30 minute chart shows the nifty resisted exactly at the upper end of the falling channel in which the nifty has been trading since January,2009. The uptrendline of the recent rise meets the 23.6% retracement level to offer support at 2768. The other fibonacci support levels are at 2724-2688-2653.

Booked out of all my longs since I will be away for the next two days. So will be back with my analysis on Monday, 23rd.

Till then,

Happy Trading !!

Lakshmi Ramachandran

Tuesday, March 17, 2009

Nifty technicals for 18th March,2009

Nifty half hourly chart

Nifty Daily chart

The target of 2806 was hit and as anticipated, correction set in. The level of 2800-2806 has multiple resistances . The trendline joining January and February peaks ----3147 and 2970 offers resistance at 2832-2838. So a successful breakout from the 2805-2840 levels is necessary. Till this level is taken out, further upsides are difficult to come.

The nifty has taken support at the 23.6% retracement level of the recent rise from 2539. The other fibonacci support levels are 2705-2673-2640.

My startegy would be to go long once the 2805-2840 levels are overcome decisively. Else, if the nifty rebounds from any of the support levels , then one can go long with appropritate stop loss, as the short term trend is up, and breakout from 2805-2840 can give good upsides of around 200 points.

Happy Trading !!

Lakshmi Ramachandran

Monday, March 16, 2009

Nifty Technicals for 17th March 2009

Nifty Half Hourly Chart

Nifty Daily Chart

I had mentioned that the channel break target was 2795. The nifty hit 2782 almost reaching the target. All indicators point at continued uptrend. The daily MACD has given a buy and other daily momentum oscillators show strength .

The four month triangle from which the nifty broke out, has now become resistance at 2790. The 61.8% retracement level of fall from 2970 is at 2800. The 2790-2800-2806 levels is stiff resistance. Intra day momentum indicators are oversold. So watch the action at those levels for any reversal /correction.

On any correction, fibonacci supports are at 2726-2690-2660-2631.

The red coloured trendline on the half hourly charts, shows a neckline forming of a probable Head and Shoulder pattern . So watch out for the forming of the right shoulder.

Happy Trading !!

Saturday, March 14, 2009

Daily Nifty

Nifty Daily Chart

The Nifty has decisively broken out of the falling channel that it was trading in since 16th February, 2009. The target for this is 2795 which coincides with the resistance offered by the lower trendline of the triangle from which the nifty broke down on 2nd March. 2806 has been stiff resistance since 18th February. 2800 is the 61.8% retracement of fall from 2970. This makes the 2800-2806 level extremely important to surpass for further upside. So we will have to watch the 2806 levels very keenly. Once this is taken out , resistance will be met at 2840 and after this acheiving 2970 will be a cakewalk.

Supports are at 2605-2575-2539-2503 all marked on the chart.
Fibonacci retracement levels of the rise till friday from 2539 are at 2682-2655-2633-2611.

Stop loss levels can be raised to 2600 levels on longs. Corrections can be used as buying oppurtunities as of now as there is a mildly bullish bias.

Happy Trading !!

Lakshmi Ramachandran

Weekly Nifty

Weekly Nifty Showing Positive Divergence

Nifty Weekly Chart

The weekly nifty chart have developed positive divergence in the RSI(14). The Stochastic too has shown a slight divergence , though not as pronounced as in the RSI. This may see an uptrend for sometime. We already have the bullish harami range break on the daily charts to give more weightage to this expected upmove.

This week's candle has taken support exactly on the trendline drawn from October lows to the low of 2539 made last week, making this trendline an important support going forward. The past two weeks candles have formed an "Inside Pattern". So we could look for direction on the break of the high at 2764 and low at 2539.

Supports and resistance for the week have been marked on the chart above.

Happy Trading !!

Lakshmi Ramachandran

Friday, March 13, 2009

Upward trending channel

Nifty Half Hourly Chart

I have been able to draw a new upward trading channel on the 30 minute chart. The resistance is at 2650-2660 and support at 2567-2575. With world markets on a good rally we too should be able to sail through the resistance points. Further resistances have already been discussed in my earlier post.

Happy Trading !!

Lakshmi Ramachandran

Thursday, March 12, 2009

Nifty Analysis for 13th March,2009

Nifty Daily Chart

The breakout of the " inside day" happened only intra day. Profit booking came in on every rise. The Nifty corrected exactly from the 38.2% levels of fall from 2806 to 2539 levels. To look at the positive side, the lows of the day was not violated.

For tomorrow , immdediate resistance is at 2630-2650 and immediate support at 2575-2555-2539. The 20dema is at 2710. Other resistance and support levels are shown on the charts.

If manages to trade above 2630 level we can expect a rise upto 2785. If one is already long, then a stop loss of 2540 which is the low made on the first day of the harami pattern, would be appropriate.

For fibonacci levels, refer to the chart posted yesterday.

Happy Trading !!

Lakshmi Ramachandran

Wednesday, March 11, 2009

Magnified Action

Fibonacci levels

Nifty 30 minute chart

The immediate resistance support levels is shown on the chart. If 2600-2640 levels which has multiple resistances , is crossed convincingly, then one can go bullish with a stop at 2550. But if breaks 2550 then we could continue the fall with supports at 2485-2500. This level will give good support .

Happy Trading!!

Lakshmi Ramachandran

Bullish Harami

Sensex showing Bullish Harami

After going back to my textbooks --Steve Nison's Beyond Candlesticks, I have concluded that, the pattern of the last two days trading on the sensex , is a bullish harami, which is the candle charts version of an inside day of the bar charts.Though, in case of a Harami only the real body (range of open and close) of the second candle needs to be engulfed by body of the first candle.

As per Nison, the colours of the candles forming a Harami Pattern, can be white/white, white/black, black/white and black/black. (Please note, white is an upday and black is a down day). Their bullish or bearish nature depends on the preceding trend. Harami are considered potential bullish reversals after a decline and potential bearish reversals after an advance.No matter what the color of the first candlestick, the smaller the body of the second candlestick is, the more likely the reversal. If the small candlestick is a doji (doji is a candle with open and close almost the same), the chances of a reversal increase.

Because the first candlestick has a large body, it implies that the bullish reversal pattern would be stronger if this body were white. The long white candlestick shows a sudden and sustained resurgence of buying pressure. The small candlestick afterwards indicates consolidation. --courtesy (I was too lazy to write it on my own) To come back to the sensex,

  • the candle of 6th March (first day) was a long white candle ,
  • with higher volumes than the candle of 9th March(second day).
  • The second candle is completely engulfed by the first candle.
  • we are in a downtrend from a long long time

So thursday's trade will confirm whether we are starting a rally which may sustain for sometime. Please let me know your views.

Lakshmi Ramachandran

Tuesday, March 10, 2009

Inside day

Dow Chart "Inside day" Breakout
as on close of trade, 10th March

Nifty Daily Chart, close 9th March

Sensex Chart showing "Inside Day"

Monday , 9th March was an "Inside Day". I am showing this on the Sensex charts as it depicts the candle chart patterns better than the NSE's Nifty charts . It is best known to the NSE why the open price is always shown the same as the previous day's close. So, I have used the sensex charts wherein the "inside day" is clearly visible. The nifty chart too shows monday's trading as an inside day .

I repeat, (I had already defined it in an earlier post), an Inside Day is a day that has a lower high and higher low than that of the prior day.Simply put, the high and the low of the previous day are not violated. Inference of this is, the market may be catching its breath before another up or down day. It could be indecision between bulls and bears . Or, it may be hesitation by the market players who are wary whether the current trend will continue .

The "inside day" can become quite powerful when it occurs during a long-lasting trend, and can therefore signal a reversal. Could this be applicable now? We cannot say till confirmation of other signals and the breakout direction. At the time of writing this post, On wednesday,11th March, the Dow, on 10th March, has already broken on the upside and the stochastic has broken its earlier high and is in buy mode. We have the advantage of seeing whether this has follow up buying or a false breakout, as today is a holiday in our markets.

For trading purposes, the close of the inside day does not matter. The next day "coiling" is important . The trade is to be taken on the break of the range of day one, whether upside or down. For the nifty the levels for thursday are at 2626 on upside and 2539 on the downside. So wait for the breakout to occur and trade accordingly.
Happy trading !!
Lakshmi Ramachandran

Sunday, March 8, 2009

Magnified action

Nifty 30 minute Chart --1

Nifty 30 minute Chart --2

The head and shoulder target which I have been writing about, was achieved , bang on. Normally, after a target is achieved, a pullback can be expected. Nifty retraced 34% of the fall from 2806. Chart 1 shows the fibonnaci levels of fall from 2806 in red and fall from 2970 in blue. See how 2642 and 2704 may turn out to be stiff resistances as fibonacci levels coincide.

Chart 2 shows supports and resistance of downward trending channel in which the nifty is moving.

Trade light and with stops as the markets will be closed for two days.

Happy Trading !!

Lakshmi Ramachandran

Daily and intraday charts

Daily Nifty Chart-1

Daily Nifty Chart --2

Check out chart number 2 first. Shows the trendline joining March '08 lows and July '08 lows. This trendline has been providing very good support since the Nifty managed to climb above it on December 15th,'08. The support provided by this trendline for 9th March is at 2416. The recently formed falling channel has support at 2505 which coincides with November '08 lows at 2503.

In conclusion, 2503 is very good support and break of this level should definitely find support at 2416. Only a break of this level will give rise to a free fall to October '08 lows and then melt towards 2000 which is the triangle breakdown target.

Resistances can be seen on the charts and has also been discussed in the weely analysis post.

Happy Trading !!

Lakshmi Ramachandran

Saturday, March 7, 2009

Weekly technicals

Weekly Nifty Chart

Weekly Chart Showing Latest Action

The triangle break is confirmed on the weekly charts too. The 50/200 ema death cross continued to get deeper. The trendline from bull market highs of 6357 is trending lower by the day and is offering resistance at 3234. The 20 wema is at 2991. Resistances are many in the path to reach these levels and i am not repeating the levels here as it is clearly shown on the charts. Supports are few, the first being at this week's low of 2539, followed by 2520-2503-2463-2252.

These supports should hold for the time being as fall has been continuing from 16th February, completeing 3 weeks. Since October lows, no fall has lasted for more than 3 weeks. Hence if the fall continues then it should be considered as a signal of weakness and so possibilities of breaking supports mentioned would be much higher.
The fibonacci resistances are at 23.6%-2642, 38.2%--2704, 50%--2755 (previously great support as neckline of the Head & Shoulders pattern), and 61.8% --2806 which was high of the right shoulder.In short climbing above these resistances will be difficult, but if conquered , will see upsides of 2970-3000 levels.

Thursday, March 5, 2009

Does the blog look better now?

Dear readers
please let me know whether this look is better than the one before
lakshmi ramachandran

No Whipsaws !!

Nifty Daily Chart

Nifty 30 minute chart

Today was a wonderful day with no whipsaws for a change . It was nice to sit back and decide when to take profits. I booked profits in another 25% of the shorts and am left with 50% which I have decided to hold till I get a reversal signal.

Technicals have played out well. The Head and Shoulders target as shown on the charts since a few days has almost achieved the target of 2535. The triangle target of around 2000 is yet far away. So we may see pull backs before we reach 2000.

Today , the support of 2571 was breached intra-day but closing was marginally above it. Lets see if it holds tomorrow. The next support is the November lows of 2503. October lows is only at 2253. So if 2503 is broken we could have a free fall !

The fall from 2970 has been within a falling channel shown on the daily charts. Support from the channel comes at 2520 and resistance at 2680. Nifty is reaching oversold conditions so keep tight trailing stops on your shorts.
Happy Trading !!
lakshmi Ramachandran

There can be humor in distressing times

What I read this morning : Ajit Dayal's article

An interesting news item in Business Standard: the government wants to create a symbol for the Indian currency, the Rupee.
Just like the US dollar has "$"; the pound sterling has "£"; the Euro has "€"; and the Japanese yen has "¥".
Apparently, India wants its own symbol for its currency because of India’s growing influence in the global economy. Also, the present abbreviation of the Indian Rupee is "Rs" and this is shared by those less important countries like Pakistan, Nepal, Sri Lanka, and Seychelles. "Which government in their right mind would wish to be associated with these banana countries? Certainly not Incredible India!" is probably the underlying theme emanating from the government here.

In this age of doom and gloom I am glad to know that there is still someone in the halls of power who is thinking long term strategy here.
I mean, why waste time over coming out with a real stimulus package to kick-start the economy and make India stronger? Focusing on a symbol is the really hard work that needs to be done.
Why spend the five minutes it would take to prepare a statement that - even though election contributions in sacks of soiled notes are welcome from the real estate developers - the government has decided to allow the real estate developers to drown in their own overpriced and overbuilt land banks?
Why spend energy on announcing the results of the now-forgotten Raigad referendum against the Reliance SEZ - and admit that the SEZ policy in general was nothing but an act of piracy that would make the famed Somali pirates proud?
Hey, dumbo! India is a growing economic superpower and we need a symbol for our currency to, well, symbolise that. So, loosen up! And let’s get to work!
Symbols ‘symbolise’Symbols represent the ethos and culture of whatever they are supposed to symbolise. Sometimes the true meaning of the symbol only dawns on you much, much later.
For example, the US Dollar has the ‘$’.
For years I wondered what this symbol meant. Today it is crystal clear. The ‘S’ in the ‘$’ represents the "snake" - something you cannot trust. Something slippery. The two vertical lines from top to bottom represent a negation, the cancellation, and a strike off. In case you had faith in a snake, buster, and here are the 2 lines to cancel any trust you had. So the ‘$’ represents a currency you cannot trust!
It took the Chinese 20 years of slave labour to find that out. Now it has dawned on them that the trillions of ‘$’ currency notes they have are not really worth much. Hence, they are busy buying gold, oil, and raw materials with their excessive stash of US currency.
And whatever left over currency they have, they have given it to the Clinton Foundation. They refused to pay the DHL costs to send all those notes across. So Secretary of State Clinton flew down to pick it up. For obvious reasons this did not make the CNN Breaking News. The CNN reporters were too busy telling the world that China is a superpower and Clinton dropped by to beg China to stop bashing the currency - but bashing people was acceptable.
The Indian government, meanwhile, is using its stash of currency to proclaim to the world that we are a superpower. Slumdog won the Oscars. In the real world those who control the media are the true winners. And Bollywood has conquered Hollywood. Never mind that it took a jump into a pile of dunk to win over the hearts of the critics and the audience. Hey, we tried to appeal to the nicer side of humanity with "Gandhi" in 1983 but the world has changed - and we must change with the times.
Goodness is for the textbooks, while "badness" is what real life is all about. Ask those "Bummed-out Billionaires" - the titans of Wall Street and the CEOs. They cleaned out big time with their "badness" - and they get to keep their loot! The Chinese, Japanese, Russians, Indians, Saudis hold monopoly paper - the ‘$’. And we are paying security guards money to guard it.
The Americans are having the last laugh for sure. Their newspapers are full of articles of people losing jobs and money. Actually, this was a conspiracy. The CPI-(M) is about to release an election manifesto based on this: the American capitalists are enjoying a vacation (disguised as unemployment) paid for by the decades of slave labour of the labour class in China. Their Zionist allies in Israel are using rockets on the proletariat in Gaza to celebrate the victory of capitalism.
The Indian symbolBut this is serious stuff now.Bigger than Shilpa Shetty being an icon for cricket.Bigger than Big Brother and Indian Idol combined.
India needs a symbol for its currency.A symbol that typifies India and our "Indian-ness".
The catch in the symbol selection process, though, is that it needs to be replicable on a computer keyboard with a few quick strokes.
So that rules out a sack filled up with soiled notes. Much as that symbolises India, how do you capture that on a computer keyboard? An Indian invented "zero" but we forgot to invent the keyboard with the sack as a stroke-key.
We could choose "B" to show that Big Business dominates India’s economic policy making. But that would give the Birla’s the feeling that the "B" represented their power. And that would be unacceptable to all the other families. (As an aside - ever wonder why the mafia, drug cartels, and governments are all controlled by "families"? They don’t say groups, they say "families". Maybe it is the tradition of passing control from one generation to the next - within the same family. Like in the Congress Party?)
So, if "B" is out. How about "A"? No, then we need to have too many letters to explain which branch of the "A" we are referring to. Complicated, hence disqualified. Just as with "R" - you need to again specify which branch of the "R". You can merge companies and businesses to hide rumoured losses on oil futures but how do you tell one R from another R? Ah, how we yearn for simplicity and transparency.
That emotion ruled out "S" - it is simple but it also stands for Satyam - and we know how that ended up. More silence and more cover ups.
"T" for Tata is not an option because they don’t control anything. They were unable to control a personal desire to buy into a failing global junk car business so where is the question of controlling India?
The CPI-M would nominate "M" for Marxists. But that would then give the impression that the Zionist "M" for Multinational is ruling India. So there is a conflict there because it is the CPI-M that has ensured that India remain backward.
To be fair to them, they had initially suggested "C" to indicate that their masters in China controlled India because of the veto votes of the CPI-M in this exiting UPA coalition. But the Chinese refused - "who wants to be associated with a banana republic?" they asked.
Another option was "O". It is the circle of life - of birth and death and re-birth. It also represents the sum of the sincerity of our politicians which is "zero" and the "O" captures that. The "oh" captures amazement and shock - and India does elicit these emotions. If you add the small "m" after that, we get "Om" the sacred chant. And therein lies the problem.
The BJP had nominated "Om" but the fear of the Muslim back lash and the loss of the Muslim vote resulted in dropping this symbol of "shantih". The fact that the Middle East sent a strongly worded message that they would not sell oil to any country that had its currency as a religious weapon did not help. Remember these were the same folks who had threatened to stop pricing their oil in the snake-like ‘$’. Luckily for them they did not price in Euro - they would have got 20% less for their oil than they are now getting.
So, we are back to square 1 - but not to alphabet "A".
We still need a currency symbol that captures the ethos of India. And can be replicated on a computer keyboard.
And the winner is...So, I nominate "Z".I confess we do own shares in Zee TV for clients but that is not the reason.Z represents the sound of sleeping "zzz".What Indian politicians have done for decades.
Z also represents the emotion that is stirred when we hear our politicians speak. They will tell us what a great country India is and how we must carve out our rightful space in history. Meanwhile, they are carving out their rightful share of some shady deal.
Z also represents the most important agenda item on every politician’s list: how to secure a "Z" level of security assignment for their sacred bodies and for their families.
And Z stands for a person who is unable to stand up for anything. Like an "S" he is crooked, and bends easily.
And Z can also be seen as a palm on top of a table and a palm underneath the table and the diagonal line that connects them is the wire transfer to the UBS Bank account.
On the computer keyboard, the "Z" is near the shift button to show the "shifty" nature of this alphabet.
And Z also represents what can happen to a country if it is run by selfish, tin-pot politicians. We end up like Zimbabwe and a currency like the ZAR. Worthless.
But there is a certain positive finality about "Z".It is the ending of a sequence. It is the sign that enough is enough. We won’t take this nonsense anymore. And come April and May we will show you what we mean. It has boldness to it. A definite response, the last word. So, let’s use it - and use it well.
So, there it is: my vote and nomination is for a ‘Z".
As an aside...The Business Standard article went on to say that "The winning entry for the rupee symbol carries a prize of Rs 2.5 lakh but its designer would have to surrender the copyright to the government."
What will I do with my winning prize money?Invest in the Indian stock market - and in gold.And that is final.Z.

Note: The Honest Truth is authored by Ajit Dayal. Ajit is a Director at Quantum Advisors Pvt Ltd and Quantum Asset Management Company Pvt Ltd.. Views expressed in this article are entirely those of the author and may not be regarded as views of the Quantum Mutual Fund or Quantum Asset Management Company Private Limited.

Wednesday, March 4, 2009

Technicals for 5th march 2009

Daily Nifty Chart

Though there was an attempt, the nifty has not been able to cross even the 23.6% retracement level of fall from 2806. Positive is , yesterday's lows held and held well throughout the day. The break from the triangle is into it's third day, confirming it's validity. On the pullback resistances are at 2658-2686-2709-2732 being the fibonacci retracement levels. Strong support is at 2572 and 2502. if these levels are held then we may see retest of the upward sloping trendline of the triangle.

The 84 period SMA which I have been following for ascertaining the long term trend , has been rising since last two days after continuously falling since february 2008 !!. Will keep an eye for a change of trend.

Happy Trading !!

Lakshmi Ramachandran

Tuesday, March 3, 2009

Bears enjoy the slide

Daily Nifty Futures chart

Yes I have been a bear since 2nd March, 10-30am, and though some anxious hours had to be passed due to the ranging trade for most of both yesterday and today , sticking to technical analysis sure paid off. Inspite of the ranging with a slightly upward bias till 2pm, I was confident the slide had to come, as nifty could just about rally above yesterdays close. However, to be on the safe side, I brought down my stop loss to 2700 (spot level) . This way I would breakeven or just about make money to take care of the transaction costs in case I got stopped out. But the enjoyable slide came. Booked profits in 25 % of my positions 15 minutes before close.

The nifty moved very much like yesterday , moving in a small range for most part of the day and then a fall in the last hour. Technical targets remain the same as shown yesterday. The stop loss for shorts can be brought down to 2700 from stop loss levels for tuesday at 2800.

Todays chart is the daily nifty futures chart which shows that the triangle pattern has conformed to the volume pattern too. Volumes should fall as the price moves towards apex point of the triangle and the downtrending line on the volumes shows just that.

Happy Trading !!


Monday, March 2, 2009

What now?

Half hourly chart

The nifty opened down 80 points leaving positional longs breathless. We should consider this as a gap opening at 2677-83 though NSE shows the opening to be almost same as yesterdays close. The gap could not be closed throughout the day's trade. There were not many oppurtunities intra day as the movement was between 2706 and 2690 -- just 16 points !! -- for most part of the 5 1/2 hours, thoroughly frustrating traders . The support of 2677 -- the bottom made last week held till the last 15 minutes of trade giving hopes to the bulls of a last minute pullback. It was only in the last 15 minutes that the support gave way stopping at 2659, almost at next support of 2661. Tomorrow this support too should give way as the trading today suggested bears were more powerful.

Now for the technicals--
If the support of 2661 holds we may see a pullback to 2730 levels which is the 50% retracement level of fall frm 2798 as well as earlier support level which held for all of last week.I dont ezpect more as conditions are really bearish

The half hourly chart shows another head and shoulders bearish pattern forming, with a downward sloping neckline. This will come into play if the neckline at 2645-2649 breaks giving us a downward target of (2970-2705=265 points) from the neckline which should be around 2650-265=2385.

The larger pattern -- symmetrical triangle forming since October 2008 lows has been broken giving a downward move of about 750 points to a possible low of 1995 to 2000.

So one can be safely short with a stop loss at 2800 -2806 which is the last minor peak made on 18th feb,2009 and is the high of the right shoulder .

Happy trading !!


Sunday, March 1, 2009

A Little More Insight

Symmetrical triangle spotted in the action over last seven days. In my obsession of heads and shoulders patterns almost overlooked it. Confirms confusion/tug of war between bulls and bears. Prompts me to make a deeper study from text books about symmetrical triangles. Will get back soon with it.