india markets hit the bottoms

technical analysis demands,certain evidence which CAN suggest that the prevailing trend has been reversed,,,markets so many times produce such mooves that a technician starts believing that the end of the current phase is very much near,but market fools him,such things happen so many times during a strong trend that at one stage he just stop looking at such reversal signals and just wait for the LATE BUT CONFIRMED reversal signals,and he argues that ,,let the market itself say that its turning !!!!!!!....infact ,nothing wrong in such an attitude,but...at present the whole world market and india in particular is producing such signals that ,,,,,clearly suggests TO ME me that ...theres a very very high probabilty that sensex and nifty had seen their respective bottoms at their lows yesterday....such strong bearish trends cant reverse their course all of a sudden and overnight,,there will be some pattern formation on daily charts ,there will be abottom testing,there may be another small leg of downward move to produce positive divergance for the rsis and rocs ...a 3-6 months consolidation phase will be there........and as bottom formation in general phases out sector wise..some weak sectors will be seeing still lower levels in the medium term future,,but most of the active and fundamentally stronger stocks have seen their bottoms as on yesterday..
as we all know, psychology plays the most important role in markets,and at the pick of a typical top or a typical bottom the greed & fear factors reaches there extreme,,although there is no measurement for them...by just collecting news paper clips,,video clips of tv shows for one week..and watching both in a silent room can give a clue..in my opinion the fear factor is at its best now than ever before !!! fear among who ?? ,,a day trader is in its greep,an investor is out of the markets,,,infact selling his holding at current lelvels... there is redemption pressure on mutual funds.,an economist draws a gloomy picture....govt. auhorities at last accepting that yes we may be in recession{read mr.bernanke}..and the whole media..is in the bear hug......the picture is exactly reverse of the one which we saw in jan-08.....remember my words the long term india story is quite intact,,find out a country in the whole world thats been growing in the recent decade {after china} with a gdp of over 7%...so,this is the BEST TIME TO INVEST IN INDIA.
BJNAIK.17 October, 20083:47:08 AM

time to INVEST

HI, ALL...today morning , we are going to see one of the worst opening for even our markets, and having seen such turbulance times on many occasions, and having studied daily ,weekly, monthly charts i suggest to buy following shares, with an investment point of view, with a target of 30-40 % return within a time-span of 3 months....we will check opening prices of these stocks tonight.
1} bharat forge
2}bombay dyeing
3}guj alkalies
4}guj mineral
5}hinduja ventures
6}jp associates
7}micro inks
8}neyvelli lignites
9}ranbaxy
10}rel. petro
11}sterlite

technical analysis

what a turbulant period we are as a participents of stock-markets watching through !!!!!...learned masters of the great subject technical analysis,,like john murphy,adwerd & maggie,steve nisson,martin pring,,and most others illustrated the effects of human psychology and especially greed and fear in details in their master works,, years back on the stock market behaviour and vow !!!!!! we are watching these factors working live...erosion of wealth of common investor on such a massive scale is really very very sad..a speculator who trades blindly and against the trend can easily loose his entire life time savings in only a few days,,like these...i have been taking a class recently to teach technical analysis to a few young generation traders since last 20 days, beyond general technical analysis i gave importance to greed & fear and the real psychology of markets in last few days,,the impact of my teaching was so good that they virtually stopped trading in the manner they were used to ...and all in their own words saved atleast 2-3 lacs of rupees....hates off to the great subject !!!!!!!

a quarter ends with positive techno-funda factors...take a note

in todays article,i am trying to present my thoughts on fundamental projections of india economy based on techniacal analysis of our indices.before looking at technical position of sensex and nifty,i would like to draw attention to the fact that since mid-july our indices started to deviate from the world indices,especially the asian inidices quite dramatically..i as a student of the great subject of technical analysis have been learning one very very important so called golden rule of the subject ..MARKETS DISCOUNTS THE FUTUE.. i have read this one sentence time and again in almost all the great books on the subject,and i do believe and i always express my thoughts on technical picture keeping this in mind.the deviation of our indices from other markets from mid -july onwards ,now as on yesterday if one observes charts of world market indices, its easy to find out that only 4-5 indices have not broken the july lows,,and india is one of them..this is clearly the net effect of the deviation process started from mid july.now the question is ..that weather this clear strenth shown by indian indices is the indication of great strenth of indian economy as well ???..i am here trying to have an answer of this question using my way of doing technical analysis.their are very very clear two possibilities of where our markets are headed..its not that they are either going to go up or down...the answer of what lies ahead depends upon a trading range breakout and in my opinion the breakout will be coming very soon ,perhaps within next 2 months..
i here would like to note some fundamental developments in last 2 months,
1} oil coming down from 147 usd to less than 100 usd and looking to its weekly charts i think its headed much lower ,atleast in the medium term future, india is among very few countries where lower commodities price ,especially is a boon to its economy....inflation must come down in the medium term..so the interest rates may also have topped out.
2} reliance industries ,the giant of indian companies announced last week the driiling of oil and gas from the KG-BASIN has been started ,and one important ALMOST UNNOTICED ANNOUNCEMENT from mukesh ambani was that within 18 months from the start ril will be able to produce 40% of indias total oil demand per year,,as on today, indian oil import is 1/3 of its total import and should be roughly more than 50 billion usd...{was 44 billion usd in 2006},now just take out 40% out of this amount which will ultimately be REMAINING IN THE COUNTRY ITSELF....i am not an economist but my commonsense suggests me it will have a huge impact.
3} clearance from NSG and neuclear deal with the USA ...it will take more than 5 years for the real impact of this factor ,but the different sorts of news that will follow in coming months ...like a new nuke deal with france or germany or any other country,,,than news that indias old nuke plants actually getting uranium from other countries and news that a certain company announcing building of nuke plant ...and so on ..will surely have positive psychological impact on investors..
4}THE USA in last few months seen quite a few of its major financial companies collapsing starting from bear sterns to fennie and freddy ,to the giant lehman and wamu followed by wachovia.....none of the indian banks have any MAJOR IMPACT OF THIS SORT .this shows atleast upto this day that theres no direct impact of subprime crisis OF USA in india.
these are the few fundamentl changes took placed in last months,their positive impact is yet tobe felt on the markets in a big way..more on technicals today evening.but would love to mention one technical aspect of yesterdays close ,was that yesterday a new quarter was ended,and quarterly charts of SBI,HDFC,ONGC...only a few of more..is showing quarterly bullish canlestick patterns suggesting trend reversal on quarterly basis !!!!!...simply put..only a day after the US markets closed down collapsing the most after 1987..some of the indian major are showing signs of bullishness...quite unbelievable.. but thats true...as the saying goes on charts speaks..we have to hear them...........................
bjnaik.

a strong bounce back from supports

on 24 th august i wrote here that if next 2 weeks markets are unable stop the loosing streak we are sure to see july lows,,,which are offcourse very very strong supports for india markets,yesterday i posted an article suggesting that we may first see a bounce upto 4200-4300 and 14300 levels,than we may get supports at 3790...12500 levels,,,i also said that the strenth in sbi .larsen ,ntpc and monthly structure of reliance suggests that the july lows will be giving strong support to our markets ....but what a moove in just two days,!!!!!!!!,today it touched 3799 amidst strong bearishness the world over..i do not think any one would have given a thought of such a strong and mighty bounce back..but thats markets for you,,a strong double bottom formation on daily charts.just a day left in the week,if inflation figures can give pleasent surprise,,tomorrow too this rally can get extended which will form a weekly hammer pattern in indices and also in some major stocks so who knows ....we again may have seen a very very strong bottom.perhaps much stronger than when these levels were hit in july-08...and remember to have a glance at india charts and compare them with the world market charts.

what lies ahead for india markets ??

as i wrote on 24th august,that next two weeks are crucial for the markets,if the downtrend is not arrested we may see a crash upto july lows...markets behaved as suspected ( not expected !!)..the news of nsg waiver for india could only make a lower top on the daily charts,and the week- end closing completed the lower top-lower bottom bottom formation,,despite good IIP numbers,,,followed by possible one of the worst news on usa financial crisis...lehmen gone...merryl taken-over and aig in deep trouble...played is roll in taking the indices very much near to the july lows..but having seen some strong value buying at lower levels..a question arises as usual whats next ??...here i am trying to explain a few possibilities..
1} the most optimistic possibility is that the indian markets may have tasted the july lows by remaing a little higher..nifty at around 3900...against 3790...and sensex at 13000 against 12500...in both indices and on both GAAPED DOWN days indices have succeded in taking supports at around 78.6% of the rise..{an imp fib level}...and infact on both days closed above this levels.now, there is a visible h&s topping pattern on both indices ..targets of which have been achieved..but the neckline of the h&S will prove tobe resistance for the next up move..at around 4280 and 14300 levels in nifty and sensex..using fibonacci tool we can resitance levels at 14316..{50 % of the entire fall} and 14332 {38.2% of the recent fall } for sensex...4284 and 4313..for nifty so , in my opinion as the resistance levels meet from three angles at around 14300 and 4300..we should first see these levels...remember as usual markets bottom out in unusual fundamental situations and india markets have clearly shown their strenth against its asian peers..compare the charts of hanseng with sensex and the picture will be very much clear...if the firts possibilty really turns out to be a reality,, we will than have to check what happens at the resistance levels..if we have hit the deck than naturally after giving some reaction indices will continue the upward journey.
2}a little bit otimistic possibilty is that indices will get resisted at the above mentioned resistance levels,and come back to the july lows..but their rally from yesterdays lows to around 4300 and 14300 will give a boost to the important indicators and they will generate a buy call creating positive divergances when indices hit the july lows{ breaking yesterdays lows}...thus creating fair chances of strong double bottom formation in indices,,,remember that july lows are the strong support levels...
3} the more pessimistic scenerio will be that indices will not even cross the 14000 and 4200 levels and fall back sharply to continue the lower top- lower bottom formations nad touch the last major supports at 11907 and 3610 levels..looking at the movement in certain heavy weight stocks ,like sbi ,bhel, larsen, ntpc...and most importantly looking at the monthly chart structure of reliance industries i DO NOT SEE our indices going below 11907 and 3610 in any circumstances..
also ,with this writing i am presenting a chart of nifty-1 minute ,a few days back..which seems as a copy of the longer term sensex chart..and i do favour a consolidation in indices around these levels i.e. betn. 12000-17000 for may be 2-3 years before breaking upwards..and as i have written on my blog about the advance mooves that reliance capital takes,, ahead of nifty..i am presenting an hourly chart of reliance capital and nifty as on yesterday ..it s clear that capital broke the monday high at the hour ended at 3:00 pm..and nifty will break the same level today morning..showing again that capital leads..and a weekly chart of capital is showing an inverted h&S pattern..if that completes ,who knows we may really have hit a bottom !!!!!!!Wednesday, ...bjn.

logic of big players and media

want to express my thoughts on logic of {sometimes very confusing and even seemingly funny logic},big market players and media........when oil was shooting up from around 110 usd levels,concerns were expressed that high oil prices will adversly affect the economy,,viz..high inflation-------higher interest rates----so higher cost of mony for the companies-----lower profits----slow down of the economy,,,oil reached 140s and fear gripped even the analysts...in the meantime oil started its southward journy---but within a period of 2-3 months the central bank tightened its measures,,,resulting in higher interest rates,,,so now every one said it will be a very heavy slow-down,,,economic figures responded this thought briefly during may-june..but bounced back smartly as per the figures released yesterday...now intersting things started to happen,,,oil tanks to 100 usd...a massive erosion of 47 usd per barrel in a short 2-3 months period,,,comments from media ???? economies world over are so much in bearish mood that they will consume lesser oil..so lower demand and lower price..naturally !!!!!!!!!....untill almost yesterday media expected the economy to slow-down ,,right ??? suddenlY the IIP data showed that they were much stronger THAN WERE EXPECTED !!!!!!!!!!...after the data were released the markets bounced back from their intraday lows very smartly...untill 2:45 pm picture looked quite rosy..that markets are welcoming good iip numbers...last funny act starts here...banks which were up smartly from their lows of the day..suddenly started crashing..and so were the indices....thoughts of big players and media ??? very very intersting.....now that economy has showed its so called underlying strenth ,,,the central bank CAN take more steps in the direction of tightening..ANOTHER HIKE IN THE INTEREST RATES..{economy is so strong it can withstand it}...and so more pressure on banks ..so they are tanking !!!!!!!!!!...intersting and funny ,isnt it ???

HOW THE NEW INDICATOR HAS WORKED IN LIVE MARKETS TODAY

HI,SEE THE 1 MIN CHARTS ATTACHED HERE,,,, OF NIFTY AND REL CAPITAL..ITS LIKE BELIEVE IT OR NOT...BUT WORKIN IN LIVE MARKETS,BOTH WAYS..CAPITAL BROKE THE MORNING LOWS A FEW MINS. EARLIER TO NIFTY.....NIFTY FOLLOWED WITH A CRACK...THAN CAPITAL MADE A DOUBLE BOTTOM REVERSAL PATTERN AGAIN FEW MINS. EARLIER THAN NIFTY...NIFTY FOLLOWED BY A RISE OF SOME GOOD 30 ODD POINTS.....................CAPITAL LEADS..