what next????

hi,all..i am very much pleased the way indices have responded the major supports including 89 week Ema and some fibonacci ratios,,targets of 5158 and 17149 mentioned in the 17th april article were achieved in both indices yesterday,,and that too with huge volumes and very very positive market breadh at 2314:::1588,huge volume is certainly a very positive aspect of the current move ,suggesting that indices MIGHT have made stronger than most analysts expectations,,and any fall in coming days will be viewed as CORRECTIVE and termed as buying opportunity only...i hope happy days are here again..!!!!!!!!!!.important question now is what next???,,here in my technical observation i am trying to explain my views on ,,,the question ,WHAT NEXT????

1)i would like to take all of you a little bit back,,on january 12th when hardly any- one ever dared to mention about a top in indices and possibilty of correction,i wrote IN MY OPINION OUR MARKETS ARE RIPE FOR A DEEPER CORRECTION NOW THAN EVER BEFORE, and i mentioned about possibility of a correction of 3000-4000 points..when sensex was at 20827...the rest is a history,,mind you my article was sent to technicals@reutersindia.net and was published on my blog bhoom2tika@blogspot.com,,, now i want to point-out one important aspect of technical analysis,,when we learn the subject one thing we have to believe in is,,MARKETS ALWAYS DICOUNTS THE FUTURE...meaning markets moove in advance ahead of what is going to happen in the future...after when our markets fell heavily from mid jan to mid march period,,economic data started to come as if india inc. is slowing down,,gdp data of february were drastically lower and than suddenly inflation started to rise alarmingly,and GDP projections for fy -09 came down to around 8% FROM THE PICK OF 9-9.5% IN LAST TWO YEARS,,,WHY THEN ??? the indices made bottoms and rose around 3000 points from their bottoms???,THE ANSWER IS SIMPLE,, a 1-1.5% fall in GDP for the coming,, financial year was very well- known to the markets,,means 1-1.5% FALL IN GDP = 6000 POINTS OF FALL IN SENSEX....thats it,,,and markets bottoming out now means ,,no more worries for the economy in the medium term future !!!!!!!!!!!!!!!,
2)another point i mentioned in my jan-08 article was that the highs of the stocks that we are seeing now will not be seen for 6-8 months,,I WOULD LOVE to change the sentence a little,,although we might have
made a strong bottom,,in my opinion,the highs of jan-08 will not be seen in certain sectors for even 2-3 YEARS,,,WHY?? i can see a long term sideways correction in india in the range of roughly 15000-20000 points as in sensex...india is a great growth story but i think we need a PAUSE,,AFTER a 4 years long bull run,,so the contnuing correction would be prolonged TIME wise and no more PRICE wice...certain sectors will offcource go to new highs while sensex and nifty remains in the broader range...a look at the bse-auto index will clearly suggest what i EXPECT.
3)the current up move in indices have a few important points to be noted,,the moove looks tobe making an upward channel the slope of which is NOT very encouraging,,but actually supports my view of a long term sideways phase,, that i expect.,,the channel target in a short term in nifty around 5300 and around 17800 in sensex...expect some correction in the channle itself to take support at the lower end of the channel.
4) indices and so many other frontline stocks are on the verge ,(today being the last day of the month) of making a very bullish candle pattern on the monthly charts,,in most cases A BULLISH ENGULFING pattern,,the expection of a corrective move in the channel will be taking supports of the same monthly candle patterns.
5) last two weeks move in indices on the weekly charts is even better than all the past deeper corrections,,an indicator called PARABOLIC--SAR,,will generate a BUY siGnal called STOP & REVERSE. in the next week ,,and also a band of 3-5-8 weekly Ema is generating a copy- book style BUY SIGNAL..wekly charts now needs only 1-2 weeks sideways correction to generate buy signals in so many other indicators.
6) if indices remains in the channel my targets would be around 18500 and 5370 -5440 in sensex and nifty for medium term.......................enjoy bjn..Wednesday, April 30, 2008

a breakout??

By god's grace, on jan 12 - I wrote an articale, wich was sent to even reuters, in which i clearly mentioned, " In my opinion our market is ripe for a deeper correction now then ever before, point wise it could well be around 3000 - 4000 points "..... What happend in last 3 months is now a history..." A city bank ceo had given a target of 25000 of sensex in first week of january...now he is revising it to 19000 for 2008...this tells everything....but iwrote another article on 13th march..i titled it BOTTOM..and i said " all in all in my opinion we are almost at the bottom.." i gave a cluster of supports around 14600 and 4480 in sensex and nifty respectively...i also said that dow has a strong reversal indication on weekly charts called positive divergance...on that day sensex was 15357 and nifty was 4623..dow had a low of 11750...after my article was written sensex made low of 14677 and nifty made a low of 4468 as on yesterday dow is almost 900 points up and with todays moove sensex would be 2000 points up and nifty almost 500 points....my subject technical analysis is called an ART in itself and the beuty of our art is in identifying turning points of major moooves...i think uptill now my art has worked perfectly admitting that precise points of reversal are known to the gods only who doesnot trade..!!!!!! but with we can be trading safely..for as long as markets run..in my opinion a close above 4971 and above 16500 around in nifty and sensex will pu our markets in medium term bullish mode ,,,with targets around 5158..and 17157 in near future..a close above 4971 will be followed by good news on fundamentals of the economy......enjoy..bjnaik. Thursday, April 17, 2008

divergance effect on DOW

YESTERDAY NIGHT WHEN I STARTED POSTING MY ARTICLE..bottom...dow was down 225 odd points,i felt the heat of it,but i said to a friend it must recover from this lows ,today itself,as there is a very very strong divergance in weekly stochastics,and vow!!!!!!!!!!!!! on bloomberg ,came the news from s&p, that it sees the end of writedowns..the devil of all the havoc is on the verge of getting disappeared,,,and suddenly dow started to bounce- back..i thought even a bearish hammer with some 50 odd points negative close would be an enough trigger for our markets..no,,it closed in plus..and i said to myself this is how technicals works...

bottom

there are fiew important things tobe noted about current technical status of our market...and dow...1}dow has given a strong positive divergance on WEEKLY CHARTS ..a divergance is a pure technical term which suggests that an indicator is DIVERTING itself from actual price action...2}as tomorrows market also seems to open low..it will give the same divergence in DAILY charts..for both sensex and nifty..3}there are certain fibonaci supports for sensex and nifty 4425,4429,4479....14966,14723,14673 ...4}one imp sensex high which should support is 14908..5}one important weekly moving average which has supported sensex since 2003..in every fall untill now.is 89 week ma..which is currently at 15198..this is a very very important trade decider for our current bull market.for nifty it is 4487....6} i have seen on sensex and nifty charts an imp daily ma has been giving a very good support ..it is 377 day{a fibonacci no} day ema for sensex its at 15606 and for nifty it is at 4606..7} an all important trendline on which our current bull run has been riding since it started..is at the same sensex levels where all above supports are lying at present ..15100 and 4480 ..8} weekly stochastic is in oversold zone with daily giving divergance ...this 2 periods combination as an interpretation works very well even on intraday charts..it should work in few days also..(9) with all these .i have seen over the years that market behaves on its own ,,,and as if its a living entity in itself..market never does which almost every participant thinks that he knows where the market will go....today you ask anyone..12000 for sensex is the most common target for everyone !!!!!..i think market will bounce back much before these commonly anticipated levels...all in all in my opinion we are almost at the BOTTOM...last but not the least..i have one very good observation on fibonacci retracements..after a fall when an index gets into accumulation or distribution phase that distribution phase normally ends at a point .which is the point that when u join the top and the bottom the accumulation zone lies at around and MOSTLY in between 38.2 and 61.8 zone..just have a look at the current accumulation zone 17341 and 18391 are two ratios if u take 14900 a probable bottom...and u can clearly see that sensex was clearly distributed between those levels before it broke down................................................................WITH BEST WISHES TO ALL....BHAVESH J NAIK. 21:11 13/03/2008

value buying

hi ,all...whoever went through my views would have been experiencing a stunning experience,in last 3 days.responding precisely what i wrote,(but ,too fast ,even for my thinking)sensex and almost all indices,came back to the 200 day m.a.,and look how they were supported yesterday,in my opinion,we would have bottomed out,,and should we enter a mid-term sideways face,a smart pullback rally should start in a day or two.,on of important view i have on yesterdays market,was the lows most of the f&o and active midcap stocks made,for us technicians,mass --common man is the key,in studying technical analysis,now , who sold on at yesterdays lows??.,,,take a glance at few stocks and their price range for last 4-5 days,,,,
1)rnrl 220 .... 79
2)rpl 230 ..... 106
3)jp hydro 125.....55
4)alok tex 100....46
5)rel. capital 2700...1310
6)chambal ferti. 80 .....31
7)wwil 84......35
now ,compare those un realistic range,,,and this list is endless...but poses a terrible picture..at first glance it seems as if indian economy is getting bearish signal in advance...BUT... my question is ,who sold at those lows??? was it he???, my common man??? ...the answer is simple but a sure one...NO NO NO ...THOSE STOCKS WERE SOLD BY BROKERS...OR BY EXCHANGES ON BEHALF OF BROKERS.. as those stocks were kept as a margin fund for the exposure given to the SPECULATOR IN F&O, in my view the mass was infact rushing with cheques and demand drafts...as fast as he can to buy at those cheapest levels...so al in all ..what am i saying??? market is going to bounce back very sharply,,,it can and should form some accmulation price- patterns,,,,different from stock -to -stock.., taking some time ..but its a great opportunity to enter the great india growth story...as always deep cuts like this has proven in past few years....history will repeat itself ..here too....bhavesh naik ....23-01-08 8:15 am

correction

DEAR FRIENDS......, I have been giving technical calls for the matkets to you,some of you are new clients, and some of you are with me since 2005,i am writing this and presenting all of you with charts of sensex and some scripts ,to enable all of you tobe very much on the safe side, for all the periods in the market.let"s discuss something about charts and the markets....first. aceept one thing that the market (as a whole) ,is like a living entity,,no one ,,remember no one can say anything about it ..with 100% accuracy,as it behaves in its own way..at its own speed....second...no operator ,no fii, no other institution..can affect the market for TOO long,some of them can trigger some movement,or can have some impact for few days but no t for very vey long periods....THIRD. there are thousands of harshad mehtas or ketan parekhs..in todays indian market.....what does all these mean???? ...it means that,,technical analysis is the only answer for really really profitable trading...coz.it can find out where an operator is getting active..or it can find where some institutions or fiis are buying or selling..and it can give u PRECISE ENTRY AND EXIT POINTS...my experience with almost all my clients and all the traders in general is that they do not have coreect entry---exit points.,,since india is a great growth story and we are in a great bull-run ,the traders who enters at a high price have been able to survive,even after loosing 10-15 % off their buying price coz..UNTILL NOW even after crashing 1000-1500 points markets have bounced back and the than higher buying price have again been reached...but ..as i am presenting bse-sensex chart with this article...one can see in the chart that there have been crashes after which sensex have picked up nicely ,,for a new highs...but u can see in the charts of bse-auto,,bse-it,,and bse- cement are in bear phase from now ..or ATLEAST. in a corrective phase..which to me suggests that the whole market may enter into a sideways phase for 6-12 months,after.. around budget time...will talk during our discussion ..why???..later.but my point to all of u is ...if sensex crashes 2000-3000 points from say 22000 levels ..AND DOES NOT RECOVER FASTER AS IT USED TO DO..what wiil be about u???..especially if you will have entered at a higher level ..and without stoplosses???
remember one thing that i am not bearish on the indian markets,but we have suddenly reached at such a height that nobody...except on person who is a master in neo-wave analysis,who predicted 20k+ for sensex way- back in 1998,his name is vivek patil.i do follow the wave theory too,so this level of sensex is no more surprise for me..AND I DO BELIEVE THAT WE ARE BOUND TO REACH NEWER HIGHS,,,EVEN 50000 .!!!!!..YES 50000!!! FOR SENSEX IS ALSO POSSIBE, but it will take long period to reach upto that height,,,but my purpose to warn all of you now is that..in my opinion our market is ripe for a deeper correction now than ever before..point- wise it could well be of around 3000-4000 points ,but my worry is the TIME it will take to correct ,it will be a SIDEWAYS correction,during which we will not be able to see the buying price..if bot at higher levels..for 6-9 months or even much longer...WHY AM I SAYING THIS?,TAKE A LOOK AT SOME FUNDAMENTAL REASONS,1)national election due next year..2)US economy seems to be in some serious trouble...GOOD FOR INDIA IN A LONG RUN....BUT for the short to intermediate term..it will surely have impact on our fundamentals..3) do not forget the partial unwinding of P-NOTES,it has still got around an year...but who will wait untill the last date?? 4)in the stock -market every participent must remember one important quote...HISTORY REPEATS IT SELF..remember what happened when a mega issue of reliance petro,got listed ,,the whole market went down heavily from the listing day,,,this time around its time of another reliance issue ,,which will be getting listed around end -jan- 08 5) budget period is always a crucial period this year it will be a budget which will give something more to the COMMON-MAN AND THE FARMER and not to the business-man...... following are some of the technical reasons..
1)in our subject there are number of tools that we use to analyze the TREND of the market ,one is 200 day moving average..its an average calulated every-day ..by taking last 200 days closing price,,its believed tobe a good tool to decide MAJOR TREND,if the index remains above it the trend is BULLISH ,while below the average the trend is bearish..200 day m.a. gives a good support whenever the market corrects,i am giving you the examples of how it has worked in the past few years ,after sensex entered a MAJOR BULL-RUN ,in 2003....i am giving u dates and the levels of sensex and the average...on the chart of sensex 200 day m.a. is plotted ,where u can see how it has supported sensex in the past,................DATE 200 DAY M.A. SENSEX
1) 04-04-03 3165 3130
2) 13-05-04 5174 5131
3) 29-04-05 5990 6154
4) 24-07-06 10022 9875
5) 16-03-07 12367 12316
6) 21-08-07 13983 13941
ALL of you can very clearly see these figures and can compare them with the sensex chart...look how every year atleast once sensex has corrected and got supported at 200 day m.a. my perception is that correction in sensex will start around jan -feb 2008 as on last friday on 11-01-08 the 200 day m.a. value was 16343 and sensex closing was 20827.. the correction which may last for few months and during next june-july(this is pure guessing..i.e. june -july) sensex will be supported by 200 day m.a.it will be for the first time in 2008 ,sensex will try to find support at 200 day m.a. ,
2) AS I MENTIONED EARLIER, HISTORY REPEATS IT SELF...our sensex has historically topped every 2 year
1) APRIL -98 4300
2)FEB -2000 6100
3) MARCH-2002 3800
4)JAN-2004 6310
5) MAY-2006 12350..............WE ARE IN 2008,I WISH HISTORY WILL NOT REPEAT THIS YEAR...BUT this is what charts tells us...REMEMBER ONE THING i ma not here to advocate a bear market ,i am just anticipating a signifaicant CORRECTION..
3) on the sensex weekly chart i have drawn a trendline which has given support to major correction 2004 onwards..its value this week is around 16500..sensex should come down and take support here..in coming months.
4) another important tool that we use is fibonacci no.s ,cant go into details of it now,,but one major fibonacci no. is 89..and week ending 25-feb -2008 is 89 th week from 16-06-06 the week in which sensex made a significant low..AND TOOK -OFF..its an important week where a major event is expected.
so ,i amm EXPECTING a major top,,it may happen ,,,it may not...we will have tobe prepared for this..i am also giving u a chart of bse-auto..where one can see how a sideways market can be...so nothing to worry for the LONG RUN, but from now-onwards every entry should be with tight stop -losses.
one more important point to note ,that,a market top does not happen on a single day..for indices it may have a top on a particular day...but for the broader market a top usually phases -out..group wise ...sector wise..over a period..with this thought ..my argument is that the process of topping out may ACTUALLY have already begun..cement sector have already been down quite a beat..auto sector too may have made a top..even bse -health care index also have formed a weekly bearish pattern..ALL IN ALL CAUTION IS THE KEY WORD......wishing all of you a happy earning experience with my charting skills..which is a gift of the great god..........................................................................................................
bhavesh naik..12-01-01.
cell::9925673239.

IMPORTANT NOTE: i am having a very very sophisticated software,and i have over the years developed such a system of analysis that,if there is no bigger correction .(.as i expect..).happens at all,than i will be surely giving all of you buying calls as usaual,,i will surely wait for the TECHNICAL EVIDENCE..that the anticipated correction is ON.....