Hi,
Last week was crucial for me with respect to catching market movements.
One for the reason that 3500 was my last calculated lvls for the nifty this month(can verify with SB archive at icharts :) my official record book and my earlier post http://niftyswings.blogspot.com/2009/04/so-whatz-next.html). Well not claiming anything big but yes by all my logical reasoning and retracements theory I reached on that lvls and was anticipating correction on the wake of Q4 earnings. And yes we've corrected twice from that lvls and I was also looking further downside retracement but the first correction caught my eye and its a complete brainwasher for me. Honestly speaking last week gave me a new insight regarding market and I'm sharing the same.
Nifty Retracements - Can it Do again.
Fibs retracements are amazing and the key to master them is tweaking lows and highs. So earlier when nifty retraced for the first time by 23.6% I dared to say that that was just a profit booking retracement and not a trend reversal, how I concluded that??? Just past observations and my fib experience which I really love by heart. Now Same thing happened at the end of this week. Nifty corrected by 23.6%. So if the saying goes true by this time that History Repeats Itself, we can see upmove from here. And ofcourse the next day we indeed got the bounce from 23.6% retracement lvls but failed to sustain (coz of profit booking, nobody wants to loose profits at the end of the week -another nifty trivia). And closed above yesterdays days low. So I'm still eyeing opportunity for the next week and yes reasons are many, not only fibs but also hopes of RBI rate cuts, Global news flow which is expected to be positive, and still some time left for Q4 earnings, atleast till then we can see some swift movements upward.
Check this graph and see if we can make out similarities out of these moves.
Global Indices
Interestingly its a time for breakout everywhere. Oops did I make an offensive comment which defies all logics given by big guns all over. Whatever be the case analyst are divided most of the time. I've read ET articles and its the same story everytime, half will say boom and half will say bust. But neither of them can be true and one has to win despite of all pros and cons. So my sixth sense or understanding supports what is going on currently and I got to overrule the logic that recovery can't be so fast despite of poor performance. As market has a tendency to discount all news in advance say some 6-7 month ahead or even larger. So possibly things will improve with a period of time, but best rational thing is to go by charts and watch for breakouts.
Now coming to Dow Jones, see the charts it has successfully managed to stay above 8000 mark, atleast the last two candles says so. In my earlier post I've thought of it as Accumulation period of say some intermedciate period and it seems it going nicely. So who am I to frecast ahead of trend that its all fake or bearish, let them break key levels downside and then make the fuss. Till then we can safely move with market isn't it. So clearly dow holding nicely its upper levels which is supported by the profits by its banks. In my earlier post I've talked about Wells Fargo bank which posted profit a bit early than expected (first it was hard for me to believe coz of Fair value concept which gives freedom to banks to value its toxic assets as per their wish) and other two major banks Morgan stanley and Citi group declared profit. Now not going deep into the citis type of earnings and all the concepts the fact is that American Banks have joined the spree of declaring profit and that's holding the market, atleast for a time, and the charts will tell how prudent their earnings are. Some major stocks like Google is also doing well so all n all its a boom boom thing for the american bourses.
SNP Outlook
Just Check this out
http://blogs.stockcharts.com/chartwatchers/2009/04/daily-ema-combo-turns-positive.html
Now this is the stuff to ponder, I read John Murf's blog in which he advocated SNPs breakout. Now I don't need to tell how good he is at charting than anyone else, but surely with his experience and explanations it can be concluded that SNP is set to breakout and if it does it is expected that Dow Jones and Nifty will follow suit. So to sum up its party time all over and if not we know what we got to do, right......
:)
Hope you loved reading it.
Happy Trading.
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