Market review 27th July 2008 - after a forced break

Well, Blogger's heuristics and/or fuzzy logic thought this blog is a SPAM and the blog got locked out for the past 3 weeks. After two follow-ups, a manual review seems to have been undertaken and the blog has finally been unlocked. Must thank God for small mercies, the Google / Blogger staff for the huge mercy. I sincerely hope the logic would have been fixed by the Blogger team.

Coming to the Indian Stock Market, a lot has happened in the past 3 weeks since the last post, with a strong bullish phase, as indicated in the last phase followed by corrections. STIXi on its part has been performing admirably well. There was a phase during the upmove, STIXi was distinctly underperforming most of the front-line indices. Not any more, as evident in this chart.



On the weekly charts of STIXi, the trend is still positive, with both Stochastics(14,3) as well as Stochastics (5,3) remaining in positive zone.

However on the daily charts, some of the technical indicators are showing or about to show negative bias. The trend for the early part of the week is likely to be negative. Expect a flat-to-positive close for the week. Trend likely to remain range-bound with negative bias for the near to medium term.

Cheers and safe trading

STIXi technicals as of 04-JUL-2008

As of week-ending 04-JUL-2008, the weekly stochastics(5,3) of STIXi has given a Buy though the Moving average crossover has not happened yet on weekly basis. On the daily charts, we of the technical indicators have given a Buy, as evident in the attached chart. Expect the market to open positive and remain in the positive territory for the first 2-3 days of the coming week.

It is likely that we may see bounce-back upto 920.42 (STIXi 20D EMA). The 50% retracement of the fall from recent high of 1017.61 (on 17-JUN-08) to the recent low of 817.32 (made on 01-JUL-2008) will give STIXi an upside target of 917.47.

Cheers and safe trading.

Nifty Daily Technicals - end of 04-JUL-2008

Hello,
On 4th Jul 2008, though the Nifty closed just below its 5Day EMA, as can be seen in the attached chart some of the technical indicators on the daily charts have shown a BUY trigger.
Stochastics (14,3) and Stochastics (5,3) have shown an 'Buy' crossover. 12 Period ROC is showing an uptick, though still within negative territory. MACD is showing a small positive divergence, though still in strongly negative territory and no signal crossover has happened yet. RSI(14) is at 31.94.

So Monday's (7th July) opening is likely to be positive. The 'very' short term trend may remain positive and one may expect the Nifty to target its 20Day EMA, currently at 4288 or 4302. Resistance likely around 4100 & 4158 levels.

Further the downward sloping triangle formation appears to have (nearly) completed with its recent low at 3896.75 on 1/7/08. If true, there is a possibility of Nifty aiming for 4880, with strong resistances at 4572 (50Day EMA)/ 4761 (89D EMA).

Cheers and safe trading

STIXi, (Stox Indicus) Index for the Indian Stock Market completes 3 months

Hello,

I was away travelling, catching up with some long-lost friends, going back in time by some 20-23 years, on a quickly assembled Alumni meet. So, there was a break in publishing my posts.

Anyway, in a market hell-bent on travelling in a single direction, I don't think indices or charts would make much of a difference.

The STIXi values for the period 18-JUN-2008 to 30th June 2008 are available here --> Stox Indicus : STIXi values for 18-JUN-2008 to 30-JUN-2008

While I was away, on 30th June 2008, STIXi has completed 3 months of existence.

Over the past 3 months, STIXi has performed admirably well - Pat on my own back :-) as evident from this chart:

As of date, only SENSEX has managed to beat STIXi - that too very very marginally, and that too only during this current vicious fall.

During yesterday's fall, STIXi broke below its channel formation it had maintained for the past 7 weeks (since 13th May 2008).

Market Review

On 27th Jun 2008, Sensex had closed below its 144 Week EMA, as anticipated in an earlier post. Also, yesterday's Sensex close ended up retracing 38.2% of the upmove from the lows of APRIL-2003 (Yes! whole of 5 years+).

These only indicate worse times to come. The recovery is likely to be a long-drawn out process, going by the new-lows being made everyday. Any recovery is complicated by domestic political scenario, Oil Prices, Inflation, global tensions, FII liquidations etc. Sensex on the downside may find some support at 13220, 12627 or 11553 levels.

However there might be a technical pullback over the short term, because the market is oversold, but other than the 14Day RSI of STIXi (now at 22.56), the short-term buy trigger / trend-reversal are not yet visible on the charts of STIXi or any other front-line indices.

Brave-hearts and believers in long-term story of Indian growth trajectory would do well to start cherry-picking. You may keep the following in mind, when you do start buying:

• Buy a story you are convinced about
• Buy in small lots
• Most importantly do your homework on the scrip before you buy it.
• If your horizon is short term, stay away from the markets for some time.
• AVOID dabbling in penny stocks
• Do not buy on rumors.
• Take a diversified portfolio kind of approach, with some overweight on Pharma & FMCG for the near term.
• Remember to spread your investments over next 9-18 months. No one can catch the bottom-est of bottoms. So averaging over period during a bearish phase would help.
• If you are view is long-term, do not look at your returns on a daily basis.

Cheers

STIXi values for 16-JUN-2008 and 17-JUN-2008

• Date Open High Low Close
• 16/06/2008 1003.54 1031.95 982.68 999.37
• 17/06/2008 1001.23 1031.42 987.5 1017.61

Returns Since 01-APR-2008 (as of 17-JUN-2008)

• STIXi : 1.76%
• Nifty : -1.83%
• SENSEX : 0.45%
• CNX500 : -1.67%
• CNX100 : -1.82%
• Midcap50 : 1.46%
• CNX Midcap : 1.08%
• Nifty Junior : -1.80%

STIXi Technicals as of 17-JUN-2008

• STIXi has closed above 13Day EMA now at 1014.02.
• 20 Day EMA : 1027.98
• 21 Day EMA : 1029.46
• 26 Day EMA : 1035.03
• 34 Day EMA : 1040.16
• 50 Day EMA : 1059.1
• RSI (14) is @ 44.3945
• ROC (12) is @ -2.87479
• Williams%R (14) is @ -54.47

While no bullish moving average cross-over has happened, the stochastics (14,3) as well as (5,3) have not given a SELL yet for the current move.

The upmove has not been accompanied by STIXi volumes & turnover, which have been dipping strongly over the past 4 sessions. Profit booking appears to be taking place across the board, as nearly 50% of NSE EQ volume yesterday was outside of STIXi universe of 150 stocks, which was hovering around 63% till 4 days ago.

Cheers

Sensex Weekly Chart - Week starting 30DEC2002 upto Week ending 13JUN2008

As evident from this chart, the Sensex has closed below the 89Week EMA for the second time in the recent past and the 20W SMA as well as 21W EMA have closed below 34W EMA, which has not happened in the last 6 years or so.

So unless, we break above 15500 mark convincingly and close above 16480, we are headed for really tough times downwards, with an intial stop coming at 13890 levels.

In the first chart above, the 20W SMA when looked at alone is showing ominous signs of a H&S formation that is gathering momentum, with the shoulder-line at around 13700 levels, which is slightly below the current 144W EMA @ 14890. If this H&S comes to fruition, it is going to be blood-bath on the market and time-wise the bearish sentiment may continue for

Caution adviced. Cut your speculative positions. Weed out penny stocks from your portfolio. And take home your profits, if you are sitting on any still.

Cheers

STIXi Technicals as of 13JUN2008

STIXi continues to stay below all EMAs



And both Stochastics (14,3) and (5,3) have been indicating 'buy' for past 3 days.
And the 12-Period ROC is showing an uptick but still in negative territory, indicating bearish sentiment, and MACD is showing a divergence on the upside for past few days, but bullish signal line cross-over has not happened yet.

STIXi RSI(14) has made a higher-low and appearing to signal a 'Buy' in the short term while the Williams%R (14) is also indicating a Buy, but has not crossed over mid-mark.

However the mild BUY triggers have not been accompanied by a surge in STIXi volumes, though STIXi's share of volume and turnover in NSE EQ have been consistently moving up indicating action being restricted to select scrips of the entire universe.

While the next 1-2 days may be positive for the market, the medium term trend stays negative.

Cheers