S&P 500 Futures on 29th August

Friends,

Yesterday there was a rally in US Markets - S&P 500 Futures rose to almost 1300 level. Looking at the Daily Chart of S&P 500 Future, I have two things to say :

1. The S&P 500 Futures could not manage to get above the rising wedge support line which was broken decisively on 19th Aug.

2. it is still well below 1320, the Fibonacci retracement of 50% of the high of 19th May and low of 15th July.

The above points do point to one thing - yet another suckers rally. All these rallies that we are seeing so frequently are fierce and fast - typical of Bear Market rallies. So I would maintain my view that the primary Bear Market trend is intact.

The one thing that is good for bulls is S&P 500 Futures are currently above 55 EMA.

Nifty and US Markets Today

Friends,

Just see my last post, there I told you I was worried for bulls and it came true. Another more important point is the today's Nifty Futures low was 4209, just near the 50% retracement I told in my last post. Now if bears have upper hand again, the next support for Nifty Futures will be at 4098 - the 61.8% retracement (see the chart in my last post). Below that it can be a journey towards lower low. Bulls need to defend this 4098 with all their might or they might become extinct for some time.

Looking at US Markets, the S&P 500 Futures are between 34 EMA and 55 EMA and there can be a big move in the days to come. The Dow Jones Futures are, however, above 55 EMA. The larger trend is still bearish in my opinion. I will be looking at 1260 very closely now, it is going to be an important support level.

Nifty Future Analysis as on 25th Aug 2008

As I posted here yesterday, Nifty Futures opened higher and started moving southward then eventually closing with marginal gains. Resistance was encountered at about the middle of 34 Period EMA and 55 Period EMA on the Daily Chart.

Looking at Fibonacci retracement levels, if we take the low of 16th July and high of 12th August, Nifty Futures managed to stay above 38.2% retracement level. However, the kind of move today shows weakness and next support comes at 4207, which is 50% retracement level (see chart above).

Another big worry for bulls is the volume of Nifty which is pathetic for more than a week.

For tomorrow the opening is likely to be affected by global cues and how US Markets close today and Asian Markets open tomorrow can have an impact on Nifty.

I am planning to present a few stocks for trading here (the ones which I recommend to my clients). I hope you friends will benifit from that.

Nifty and S&P 500 Analysis for 25th August 2008

Nifty Futures
On Friday, the NSE Nifty Future closed just below the 200 Period SMA on Hourly Chart. As I posted here earlier, during the day it tried to get past this 200 SMA but could not succeed and in my opinion this is not good for bulls.

Looking at the Daily chart, Nifty Future started a new down leg on 12th Aug and so far maintaining it. The EMA sequence is also bearish as 34 EMA (the red curved line) is below 55 EMA (the blue curved line). I am expecting Nifty Futures to open slightly up on global cues on Monday and then start moving downward.

US Markets - S&P 500 Futures
For the US markets, the S&P 500 Futures, it went past my expected level of 1285 and closed above 1291, just above the resistance zone (see the downtrend line) giving signal that bulls are still in the game for some more time. The latest uptrend line was violated on 19th Aug and on Friday it reclaimed it. The move on Monday is going to be crucial and only then we should look for the short term trend/direction.

The EMA sequence is bearish as 34 Period EMA(red curved line) below 55 EMA (blue curved line) but it managed to close above 55 period EMA which is again a cheering thing for bulls.

If S&P 500 Future manages to remain up, it is possible it tries to conquer the 200 Period SMA around 1340.

My conclusion is we should carefully track Monday's movement and decide accordingly. The Hourly Chart after two hours of trade on Monday should give some clearer picture for short term.

Nifty Futures Below 200 SMA on Hourly Chart

Friends,
Today I post my view and analysis of NSE Nifty Futures based on the Hourly Chart. The one thing I noticed during the trading time was in the last hour Nifty Future tried its best to save the 200 Period SMA but failed and closed well below it.

If you notice the chart, Nifty Future has been maintaining well above the 200 Period SMA since 22nd July when it first crossed it. As I have already expressed in my previous posts, I expressed my doubts about the up move that had taken all bears by surprise when it reached around 4600+ levels.

The question is what now? Well, as my past experience tells, there should be one attempt at least to regain the 200 SMA (around 4300 now) and then the further course of action should be taken.

As forUS Markets, the S&P 500 Futures, there are two levels that I am keenly interested in :

1. 1272 - If it manages above this number for few hours, then even a touch to 1285 is possible in very short term. (At the time of writing this post, it is at 1275 so some hope for bulls)

2. 1285 - This is where the Daily Resistance is. If this number is conquered on a closing basis, then only bulls have any outside chance of regaining momentum.

S&P 500 Futures - Rising Channel Breaks Down

I told you friends there is a rising channel forming in S&P 500 and the future charts (Daily) for today shows it has been broken. Such patterns are generally continuing patterns of previous larger trend, which is Bear Trend for both the S&P 500 and Dow Jones Industrial Average of US.

Following are my observations:

1. The support line of latest uptrend has been breached and it needs to close above 1280 for S&P 500 Futures today to be in uptrend.

2. The EMA sequence is still bearish and today S&P 500 futures are trading well below the 34 period EMA, which is below 55 period EMA.

3. The RSI is above 50, which means it is still not in technical oversold zone.

4. The ADX is indicating somewhat oversold situation so a small bounce back is also possible.

My conclusion is the US markets have finished their up frenzy and now it is an all new leg of downside. However, I will wait for today's closing and see if there is any sign of it going in upward direction.

Nifty Breakout was Fake?

Friends,
When all analysts were singing the breakout song, I doubted it (see this and this ) and then the confirmation of my doubt came true when I saw big divergence between Nifty and Nifty Futures and now we see it happening, the indexes both Nifty and Sensex collapsed yesterday and today.

Look at the Nifty Futures Daily Chart, the Main Downtrend Line is firmly there and the latest Uptrend Line has been breached decisively. This has confirmed my earlier view that we are in a primary Bear Market and the rallies that are there are just countertrend ones.

Also, for US Markets, the primary downtrend has resumed today again, as I was expecting last week.

Happy Trading and All the Best...

S&P 500 as on 15th Aug 2008

Friends,
In my last post I thought S&P 500 Futures could go to 1350 at most as it was the 200 Period SMA and 61.8% retracement of the previous downtrend but it did not. In fact it retraced from about 50 % retracement level and also the the ascending triangle that was forming is no more - there is a rising channel now. In order to remain in game, the bulls need to conquer 1350 as soon as they can otherwise it can lead to new lows. The support of the uptrend is at 1272 today.

The resistance of downtrend line (not shown in the chart) is also holding and today can be another test of that line.

Disclaimer: My "analysis" here is analysis in letter and spirit and should not be taken as "trading advice". Trading in Stock Markets is full of risks and one should consult professional advice before initiating any trade.

Outlook on 15th August

Hello Friends,
After two days of absence I am here again. Well, I have a history of "mis-titling" and today is no exception as the title of this post may be ambiguous for some people. Why? well, for Indians 15th August is more a proper noun than a date - its the Independence Day ! and the title is - outlook on 15th August, which may also mean outlook on independence day !!! Now, when I have started talking about it, let me put some real outlook of mine on the specific day. It was a historical day when fate of Indian masses transferred hands from the British to "our own men" and we became "Independent" (really?). Being an Indian I am happy to be free and independent. Congratulations to all fellow free and independent Indians.

Now, let me come to some talk about the actual meaning of the title - the outlook as on 15th of August 2008. Looking technically I warned people here in my last post that there is a divergence in Nifty and Nifty Futures and going ahead we may see further downside. Yeterday you saw the drama unfold somewhat.

As for fundamentals, I am very confused these days when I see and here people saying some real absurdities. Some say market has "significantly" bottomed out ! Some say the crude is falling and it means stocks will rally now ! For those bottom seekers my only advice is fundamentally the bad days for economy have just started and there can be worse days ahead. In my humble opinion, this time it is going to be longer duration of trouble before economic growth takes off again.

For the crude "is inversely proportional to" equities believers I have only sympathy. Those morons do not understand the simple fact that crude is falling as the demand is slowing down because of lesser economic activities and how can possibily the equities rally in an ongoing slowdown (recession in some parts of world)? Some of my friends who comment on markets have termed these rallies as "suckers rally" and I think they are absolutely right.

Yesterday I received a mail from my respected Mr. Rameshraja who has a very good understanding of Technicals and fundamentals of stock markets and runs a trading calls service at icharts.in (www.icharts.in is a charts provider site and I also use its charts for my posts here). He gave a very good reason for possible downside ahead as banking sector is very weak. I always take his words seriously and in view of that I can safely assume some real bad days for bulls ahead.

If you are an investor - a person who wants to build wealth by investing in assets then my advice is buy gold and a lot of it. The only good asset at this time is GOLD. And what a golden opportunity this is as for few days GOLD has fallen to very attractive levels.

I will update my Technical Analysis very soon... till then enjoy.

Big Divergence Nifty vs Nifty Futures

Friends,
I did not post my analysis yesterday for Nifty. The reason is I got two different views for Nifty and Nifty Futures. Yesterday, Nifty showed a breakout but the futures did not. Here I present two daily charts - identical, of Nifty (on the right side) and Nifty Futures (on the left side). Just look at the charts and see how big is dichotomy between the futures and spot.

For Nifty, the following can be said:

1. Nifty is well above the Main Downtrend Line - Line 1 and the Previous Important Support Line - Line 3. (I have just not plotted Line 2 for obvious reasons)
2. EMA sequence is bullish for Nifty, 34 Period EMA is above 55 Period EMA.
3. Volume of today (down day) is more.

For Nifty Futures, however, the following can be said:

1. Nifty Futures are still below the Main Downtrend Line - Line 1.
2. EMA sequence for Nifty Futures is bearish, 34 Period EMA is below 55 Period EMA.

However, for both of them, the Current Uptrend Line is holding.

Conclusion:
This dichotomy has spoiled the party for bulls and looking at Nifty Future, bears must be the happy lot. This can be an ongoing consolidation but my view is not that bullish, at least till the time Nifty Futures also show clear breakout. The FIIs are again heavy sellers for today and DIIs negatively neutral. I will put my bet on more downside and a possibility of new lows unless Nifty Futures also go above Line 1.

S&P 500 Futures Daily Chart 11 Aug Analysis

Hello Friends,

Once again I am here with my analysis on S&P 500, but first my apologies to post so late. Its a hectic schedule these days and I hardly manage to do some important things on time.

Let me come to the point. I am analyzing S&P 500 Futures based on Daily Chart. What I see is it is facing stiff resistance after a vertical rise in the end of last week. Well, last week was a roller coaster for US Markets, we saw all the drama and suspense accompanied with the obvious thrill.
I told here in my previous post that S&P 500 getting resisted at 55 period EMA and a triangle is forming. Today, it is marginally above the 55 EMA but if we draw a downtrend line from the 19th May high and join 6th June high and extend it, we get the line of intermediate downtrend. Currently S&P 500 is struggling below the line and my guess is it could fall from here and may be it retests the hammer of 15th July. If that's not the case and we see a consolidation and then a breakout, we may possibly see it going to as high as 1350 ! the 200 Period SMA.

Nifty Analysis on Daily and Weekly

Friends,
Here I am again with my views and analysis on Nifty today and this week. I am using Nifty Daily Chart and Weekly Chart to find out what could be the possible course of action going further.

The Daily Chart
As I have been maintaining for last few days that Nifty is at a point from where the trend can change and we may get some clear direction. My emphasis was on the Main Downtrend Line - Line 1, which was holding firm before this week but now Nifty is right at it (actually slightly above it) and in fact, it breached this line for three consecutive days on an intraday basis. Today, the close is just above the line and it signals a possible change of direction. However, the Previous Important Support Line - Line 3 is still acting as a resistance and so far Nifty has not been able to close above this line. The Secondary Downtrend Line - Line 2 has not maintained resistance and Nifty is well above it for the time being.

The Current Uptrend Line -Line 4 held firmly and Nifty did not breach this line even on an intraday basis. There is a channel forming on Nifty, if we join the highs of current uptrend, a parallel "target" line is forming. I will use this line as target for longs (if a confirmed upside is signaled properly).

Following are my views depending on above observation:

The upside potential
If the past two days can be called consolidation and If Nifty manages to go up further, it might be a breakout, which can lead to a test of 200 period SMA, which will be near the channel target line (Line 5). This way 5000 on Nifty can be a possibility in next few weeks.

The downside potential
Having said the above, I have my doubts on further upside for following reason - the volume of Nifty is not supporting price action.The second thing is the rising channel can be a continuation of prior downmove. In fact, even in the month of March, one such channel formed and when it broke down, there was a massive fall. If Nifty fails to sustain here (as falling volume and the Shooting Star on 6th Aug is suggesting) there can be big downside ahead.

The Weekly Chart

Looking at the Weekly chart, the Main downtrend line is still holding (although it was breached on intraweek basis. The 50 Period SMA on weekly Chart is almost where the 200 Period SMA on Daily Chart is. If there is a Breakout, we can see that level.

Conclusion

All throughout the week I "hoped" for some clear direction but still I can not see it. As for my own view, 4615.90, the high of 6th June (the Shooting Star Day) if taken out, then it can be all over for bears.

Disclaimer: My "analysis" here is analysis in letter and spirit and should not be taken as "trading advice". Trading in Stock Markets is full of risks and one should consult professional advice before initiating any trade.

Friends,

Nothing new to share about Nifty or Sensex. My view is still the same that was yesterday (read my last post). And read all the words as it is... Hopefully, I may get some idea tomorrow...

Nifty Still in No Man's Land

Friends,
See the chart. See what I was saying yesterday. The only thing that bulls needed was a close above today's one. BUT, they failed (see red circle). See how bad the closing for today was, it ended up being a SHOOTING STAR and see the volumes !!! even higher volumes??? what does it mean? does it mean the volumes for buyers were higher? OR does it mean the sellers sold heavily after initial upside?
Well, to take into account, FIIs are net buyers to the tune of Rs. 1815 Cr today !!! (covering their shorts or net buyers?) and see the DIIs are net sellers (booking profit or selling at good time?) to the tune of Rs. 804 Cr !!!

Confused??? so am I. But one thing is not confused - the trend line Line 1. Even today Nifty could not manage to close above the Main Downtrend Line - Line1. And for the time being, Line 3, the Previous Important Support Line is also holding firm.

If it does not happen this week, then chance for bulls to turn things around completely will fade, that's what I think.

S&P 500 Analysis on 6th Aug

Dear Readers,

S&P 500 Futures Hourly Chart suggested a Breakout yesterday which I mentioned in my post if it remains above 1262-65. Now, I must tell you the bigger picture - looking at Daily Chart, the picture is not that pretty. The reason is I see an ascending triangle forming and S&P 500 Futures are continually getting resistance at 55 period EMA (see the right most red circle).

Rising wedge, channel and triangles are mostly continuation patterns and so, as you can make out of the other two red circles I have drawn, this ascending triangle can also prove to be just a continuation of previous down move. I would keep a close watch on the support line of this triangle, once it breaks, then lower lows can be seen.

Let us watch what happens this week...

Nifty on a Breakout?

Friends,
Today Nifty gained a almost two and a half percent with better than previous seven days' volume. Is this a breakout? are those days of Bear Market over? Let us see how it shows up on daily chart.

As we can see, Nifty rose to close above 4500 with good volumes and almost penetrated the Main Downtrend Line - Line 1 and the Previous Important Support Line (which is acting as resistance now) - Line 2. Lot of people have already termed it as breakout and are now betting that the Bear Market is over, but, as I have been maintaining it in my past posts, the Main Downtrend Line - Line 1 is still holding. Let me conclude my observation :-

The things favouring bulls:
1. Nifty is above the Secondary Downtrend Line - Line 2.
2. The volumes of UP days are better than the DOWN days for some time.
3. The Current Support Line - Line 4 is maintaining.

The things favouring bears:
1. Nifty has still not crossed Line 1 and Line 3.
2. The FIIs have been selling almost continuously and have sold more than
Rs. 1400 Cr in last three days.

Conclusion: I will still wait for the close and consolidation above Line 1. My idea that this week we may see a clear direction looks to be setting up.

Disclaimer: My "analysis" here is analysis in letter and spirit and should not be taken as "trading advice". Trading in Stock Markets is full of risks and one should consult professional advice before initiating any trade.

S&P 500 took support near 1245

Friends,
As I mentioned yesterday (see my last post), the S&P 500 when not managing to be over 1262, fell to 1253 and breaking that it almost kissed 1245, which I mentioned as next big support. After that, as of now, the S&P 500 futures have rallied back to retest 1260ish levels again. It's a vertical upmove and as I always say a vertical upmove should not be trusted too much. If it consolidates above 1262-65 for some time, then there can be a trustable upside.
I did not put any chart, but looking at hourly chart, the upmove is being restricted at 55 period EMA and 200 period SMA (around 1260).

Lets wait and see today's move.

Dow Jones and S&P 500 Futures on 4th Aug 2008

Friends,
Last time when I posted my analysis about S&P 500 on 1st Aug I emphasized on 1260 - 1262 as important levels. On Friday, it remained near that mark and closed just at 1260.
Looking at current Hourly Chart of S&P 500 futures, the signal is down as it is trading well below the 200 period SMA and 13 period EMA. For any upside to be seen it needs to remain above 1265 for few hours. If it continues to go down, the next support is at 1253 and then 1245.
Looking at the Dow Futures Hourly Chart, the situation is even worse. As we can see here the 13, 34 and 55 period EMAs are below 200 period SMA and that signals a quite bearish attitude. Dow Futures need to remain above 11380 to show some strength. As of now, the downside is more in sight.

Nifty Analysis - Weekly and Daily Charts

Dear Friends,

So I am here with the Weekly Chart (Long Term) and the Daily Chart of Nifty. My observation based on the charts are following:

The Daily Chart

The Daily Chart of Nifty made me recall the previously well mentioned lines - Line 1 - The Main Downtrend Line, Line 2 - The Secondary Downtrend line, Line 3 - The Previous Important Support Line. In addition to that I have drawn a new line - line 4 - The Current Uptrend Line.

Looking at these lines, the current position of Nifty looks like it is at the resistance of Line 2. If this is breached, there is the possibility of Nifty touching Line 1, which is very important resistance as it has not been breached even on intraday basis for this entire Bear Market which started in January. The level comes at around 4530-50.

The support of Line 3 (around 4510 for Monday) is also acting as a resistance and the interesting point is it is nearing Line 1, so the resistance becomes even more powerful.

The Current Uptrend Line - Line 4 is steep and will hold only if the buying is sustained with the same vigor that has been so far in the latest upmove. For that, a close above 4285 (which also happens to be 34 Period EMA) is what bulls should take care of, failing which this line will be violated and more downside to 4150 levels can also be a near term possibility.

The Weekly Chart
I have drawn the Fibonacci lines on the Long Term Nifty Weekly Chart. We can see Nifty went to very near to the 50% retracement level in past weeks. If it breaches it in coming weeks, the next weekly support comes very deep around 3000 level. However, one thing to note down is for two consecutive weeks volumes are impressive.

Conclusion: I strongly hope this week is going to tell us some direction, however, there is all the possibility that we may have to wait even more.

Disclaimer: My "analysis" here is analysis in letter and spirit and should not be taken as "trading advice". Trading in Stock Markets is full of risks and one should consult professional advice before initiating any trade.

Weekend Fun - The Iraq Deal and Dubai

Before posting weekly analysis of Nifty and US markets, let me share some fun. First, I put here this link - The Iraq Deal when you read it what comes to your mind? sound economics? first ruin a country charging it with WMD (weapons of mass destruction) and then sell the same country "weapons of not-so-much mass destruction".

The second thing is one paragraph from an e-letter I get. This is by Bill Bonner of The Daily Reckoning. Read the following piece:
Dubai has inflation at 22%. Dubai, by the way, is
a bubble. It has only .02% of the globe’s population. But it is home to
10% of the world’s construction cranes and seems hell-bent to prove to the
world that there are bigger fools than Americans – as if that needed
proving. It now has the world’s only 7-star hotel...and the world’s
tallest building too. In the harbor, it’s building a series of artificial
islands in the shape of a map of the world.

The gods must be watching...and getting ready to teach Dubai a lesson.
What would it take to kick Dubai in the pants? A lower oil price...

I hope it did make u chuckle...

S&P 500 Hourly Chart analysis

Friends,

In past few days we have seen stock markets showing good up movement globally. I am presenting here my analysis based on Hourly Chart of S&P 500 Futures, US.
Looking at the S&P 500 Futures Hourly Chart, I have come to the 1260 level as most important. Following is the summary of my analysis:

1. The EMA sequence is still positive but the price is below 55 period EMA and sustaining there.
2. The 200 period SMA, which is at about 1262 can support it. So far it is maintaining above it.
3. It is well below the 38.2% retracement level of the latest upmove and now the next support is 50% retracement level which is at 1260.
4. 1260 is important in another way also as it is 13 period EMA on Daily chart.

Conclusion: If S&P 500 Futures take support at 1260, then the upmove can resume, breaking this level, it can go down to 1253 (the 61.8% retracement) and below that it should be very dangerous for bulls.