Wednesday, August 26, 2009

Confused correction!


Sensex looks to be in a complex 4th wave correction
The momentum is continuously decreasing
Avoid any long positions in this "sucker" rally
Global markets are not looking good, with Chinese market weakening everyday
DXY has given a good impulse wave up and should head for a big rally
Copper looks to have formed a major peak around 293
We maintain our negative bias as long as 15970 is not taken out


Hindalco is relatively very weak and the momentum is also downwards
We still maintain our negative views on Hindalco as long as prices do not break above 116 levels

Thursday, August 20, 2009

A crucial juncture!

Sensex has formed a Head and Shoulder pattern with neckline near 14700 levels. This level is providing a very strong support and needs to be broken for further negativity
The momentum is decreasing everyday but it is imperatve to get a price confirmation
It is amazing to see how not only the global equity markets but currency and commodity markets are moving in a range since past few days. Are we still decoupled???
Shanghai is dragging down most of the Asian pacific markets along with it and should lead the direction
Dollar index is moving in a range and should breakout soon in upward direction. This will be bearish for commodities and commodity stocks
We also observe 38.2% retracement level of fall has been reached in multiple markets like DJIA, FTSE 100, ASX 200, 61.8% level reached in Copper
VIX index also looks to have given breakout in upward direction
Baltic Dry index has already started moving down after completing 3 waves up. This cannot be a good sign
Different asset classes (Equities, Commodities, Currency) reaching crucial resistance levels at the same time isn't just a mere coincidence!!! Think about it!

Hindalco Vs. Dollar Index (DXY)
Hindalco looks to be forming a triangular pattern
For negative price confirmation, range of 99 -100 needs to be broken
Also note the close correlation Hindalco shares with Copper and inverse relation with USDollar
Copper (currently at 276) needs to break below 273 levels for some major correction
Reliance Industries

Our target of 1880 is achieved in Reliance!
We asked for initiating short position at 2000 with target of 1880 to 1900
MACD has given negative crossover and is below 0 line. If prices fall below 1870 one can initiate short position again as long as prices remain in the corrective channel.

Friday, August 14, 2009

Hindalco: A complex view!

Hindalco: As long as 116 high is not taken off we still maintain our downward bias
The short term target is revised to 86 looking at the Gann angles and Fibonacci retracement levels. Lets wait and watch!

Thursday, August 13, 2009

A "V" Turn

Sensex looks to be following Gann angles meticulously

The red and blue Gann lines are providing support and resistances for the move from March. The market is continuously loosing steam and for a major pull back the support of blue line needs to be decisively broken

Tuesday, August 11, 2009

Begining of a major correction???


Prices fall below 15000 making it imperative to adopt our alternate view as preferred
We can see RSI is very weak, it failed to even cross above 65 mark
As shown in previous blogs we have negative divergences in many of the indicators
Our first target on downside is 14200 where wave (1 or a) = wave (3 or c)


The alternate wave count treats this as an Expanded flat correction but the short term trend still remains down
If prices move back above 16000 we will review

Short Reliance at current price but with Strict stop loss of 2100. First target is 1880.

Sunday, August 9, 2009

Hindalco: A good Sell!

Hindalco: A very good inverse co-relation with Dollar index (DXY). DXY looks to have hit a major bottom. DXY shall turn up anytime soon and this will have bearish effect on Hindalco. Also the elliott countings are not showing good signals. OBV aand RSI shows negative divergence. Risk reward ratio looks acceptable.

Warning: Gann, Time cycles, OBV, Advance decline - Strong Divergence

All indicators are showing very strong negative or bearish divergence. Please be careful if you are long. My earnest advise: "Sell now and buy later". There will always be an opportunity to buy later even if we are wrong now!

Thursday, August 6, 2009

Wait and Watch!

Alternate Count

Today's fall was very steep, Sensex fall more than 400 points from its high in less than 15 mins
This can be wave (ii) of (3) but the fall look more impulsive than corrective
Important level to observe is 15,000. If Sensex breaks this level it will negate our preferred positive view and will point towards major downward correction
This can be the correction of entire up wave that started in March
15000 level is only 500 points away from current levels and Mr. Market will convey us its direction very soon

Tuesday, August 4, 2009

Rally continues but with slow momentum

The momentum is slowing down but we still have wave (3) and wave (5) of [5] to complete
We are looking at around 17000 for the rally from March to complete
Volumes are low and rally is loosing steam are all signs of 5th wave in progression
One can go long with strict stop loss at 15000. The best of rally is behind us
Nifty should have a target of 5100
The only concern is Dollar index (DXY) looks to be forming a bottom near 77 range
Reversal in dollar will pull down commodities and that will have adverse effects on global equity markets