[Today, I am just writing my views without much data. Will improvise with data points to add to views going forward.]
Very very interesting times...
Clearly the street is divided - I think there are more bears actually.
We have had few panic like sessions (96% down A-D in stocks & up / down volumes). We have had few people recommend shorts evven after nifty fell by 500-600 points in a couple of weeks.
People (traders / analysts) are quite convinced that market will fall below 200 dma and go much below it.
So, i would say we bounce from here, and then go sideways till budget.
Post-budget, we will probably fall a little and then start a fresh uptrend from March.
The risk to this is with the huge rally in Dow today (assuming it lasts till close), we gap up tomorrow and there is a frenzy buying by retail again - saying that 'yay! we bounced from 200 dma and tok support there' and then we close lower than open tomorrow.
So, a lot depends on how bullish the sentiments turns to.
For the last 2-3 weeks, in economic times & moneycontrol, all questions asking about whether nifty will go below 4500 before budget (or similar questions) have had a 2:1 ratio in favor of downside. So, my view that we will bounce a lot.
Ofcourse, if we show a follow through day, and ideally a 2nd follow through day & strong leadership to confirm the 1st one, then the uptrend will be stronger and could lead to good upsides due to so many bears around.
Tuesday, February 9, 2010
Wednesday, December 3, 2008
Are we heading down soon?
Attached are 3 month daily chart of the 2 primary indices.
While Sensex did follow-through on 26th Nov, nifty (^NSEI) hasnt. And there are already 2-3 distribution days. There is no leadership either.
Also, I am counting day 1 of rally as Nov 21, although we didnt make a new low since Oct 27 - reason is we had 7 continuous down days and we had a new lower close in sensex, though not a lower low.
Some days - like today - NSEI ended marginally in red, while SENSEX ended marginally in green - but I am counting in both the indices this as a distribution day - since volume was much higher, so it seems to be more of churning going on.
Only 31 stocks (including 3 GOLD ETFs) out of 1300 stocks on NSE exchange satisfy the following property:
While Sensex did follow-through on 26th Nov, nifty (^NSEI) hasnt. And there are already 2-3 distribution days. There is no leadership either.
Also, I am counting day 1 of rally as Nov 21, although we didnt make a new low since Oct 27 - reason is we had 7 continuous down days and we had a new lower close in sensex, though not a lower low.
Some days - like today - NSEI ended marginally in red, while SENSEX ended marginally in green - but I am counting in both the indices this as a distribution day - since volume was much higher, so it seems to be more of churning going on.
Only 31 stocks (including 3 GOLD ETFs) out of 1300 stocks on NSE exchange satisfy the following property:
- They have relaive strength (calculated over the last 1 month *AND* over the last 6 months above 80.
- They closed above 50 day SMA. (In most of these cases, 150 / 200 SMA is above 50 SMA and in most cases, these SMA are moving downwards.)
Only yesterday 298 scripts out of 1230 scripts traded on NSE (24%) made a new 52-week low while only 1 made a new high. Today 166 scripts (13.5%) made new year lows, while 2 made a new high.
I am computing Marty Zweig indicator tool too (whether avg of advancing stocks ratio and up_volume is above 90% or below 10%).
Since October 1st, this number was below 10 on 4 occasions: 3.005 on 6th Oct, 6.23 on 10th Oct, 8.55 on 15th oct followed by 3.26 on 24th oct.
The only 90+ day was the shortened trading day of Diwali 28th Oct (trading was on for only 1 hour that day, so I am not counting that.)
Infact, we have NOT had a single >90 or <10>This will change at some point - I think it will change in the next 5-7 days and I think that would be on the downside since we have no leadership and no accumulation days. Distribution days however are adding on.
Meanwhile, US has logged on a weak-ish follow-through-day. Lets hope no distribution day shows up today or in the next week. Also note that the FTD in US came right after a 9% down day - and the volume was only 6-10% higher than previous day.
-Sumeet
Monday, December 1, 2008
US in recession for a year already!
Ya, as I had said to some of you in my private talks - that we will soon hear - after US elections - that USA has been in recession for a year. And now that information is officially out. Politics!!
On the same note - now that Chidamabaram is out of Finance Ministry in India, we may soon hear some revalations here too. Or we may have to wait all the way until a new government.
-SS
On the same note - now that Chidamabaram is out of Finance Ministry in India, we may soon hear some revalations here too. Or we may have to wait all the way until a new government.
-SS
We had a weak follow through day and now a distribution day on Sensex
Sorry for not being regular and not updating the site for the past few months. Was caught on the wrong side in the July rally, but have made very good amends since then and I am now almost up YTD from April now (its really tough to be counting exactly!).
Anyways, back to my take on markets:
I didnt have a really strong view for the last 10-15 days. We overdid the rally from October lows by bouncing as much as 40%+ in 5-6 days on not so great volume. So, at that point, it was tempting everyone to short and then we overdid on the down side by falling for 7 days continuously. So, we have been range-bound for most of November.
Back to december, I still dont have a very clear view, but I will state some of my observations.
The original rally started from Oct 28. It gave a follow through day (FTD) on Nov 4th. The sad thing was a distribution day immediately followed the FTD and so the rally immediately became weak. Besides that, it had already come up 40%+ in 5-6 days.
On 14th november, the 3rd distribution day on nifty, i counted the market rally as over. Since then, we have neither gone up much nor down much.
A new rally started from 21st Nov. (Note that we didnt really break the previous Oct lows and so some people may say that the previous rally from Oct is still on.) It has NOT YET given a FTD day. Counting the 1st day and until now, we have had 1 accumulation and 1 distribution day - clearly no trend whatsoever on low volumes.
On the Sensex however, we have had 1 FTD on 26 Nov 08 and so that makes it 2 accumulation days (including FTD) and 1 distribution day. However, the FTD only had 7% more volume than previous day.
This rally looks more likely to fail than succeed - but a clear direction can appear only on breaking 2500 on closing basis and in that case, there is a STRONG chance of going to my final targets for the indian markets - 1800-2000 range on NIFTY.
Few stocks have meanwhile looked strong, but not too strong yet: NTPC is one of them.
I have reshorted all original shorts about 10 days back and they are giving me minor profits at this time - we probably will have another 1-3 distribution days before we break 2500.
Based on analysis of previous bear markets, I believe we will make it to 3500-3700 range atleast once (maybe twice) in the next year (2009). But, we will not cross 3700-3730 in 2009, no matter what. Ofcourse the market view is so bearish that not a single person agrees with me that we will goto 3700.
DONT GO LONG yet. Market is too weak right now.
Mutual Funds: I reviewed many of them and they are all very well placed. High cash levels. Stay invested in the good funds. Continue SIP. In addition, I am planning to buy a bit extra below 2500 nifty (only mutual funds), and then average down with higher amounts to invest until 1600.
Futures: I hope to go long in nifty futures from 2000 and average down (pyramid) until 1600 (no SL) and will then hold for 3500-3700. Very risky, and it is indeed going to be very rewarding if it works.
Anyways, back to my take on markets:
I didnt have a really strong view for the last 10-15 days. We overdid the rally from October lows by bouncing as much as 40%+ in 5-6 days on not so great volume. So, at that point, it was tempting everyone to short and then we overdid on the down side by falling for 7 days continuously. So, we have been range-bound for most of November.
Back to december, I still dont have a very clear view, but I will state some of my observations.
The original rally started from Oct 28. It gave a follow through day (FTD) on Nov 4th. The sad thing was a distribution day immediately followed the FTD and so the rally immediately became weak. Besides that, it had already come up 40%+ in 5-6 days.
On 14th november, the 3rd distribution day on nifty, i counted the market rally as over. Since then, we have neither gone up much nor down much.
A new rally started from 21st Nov. (Note that we didnt really break the previous Oct lows and so some people may say that the previous rally from Oct is still on.) It has NOT YET given a FTD day. Counting the 1st day and until now, we have had 1 accumulation and 1 distribution day - clearly no trend whatsoever on low volumes.
On the Sensex however, we have had 1 FTD on 26 Nov 08 and so that makes it 2 accumulation days (including FTD) and 1 distribution day. However, the FTD only had 7% more volume than previous day.
This rally looks more likely to fail than succeed - but a clear direction can appear only on breaking 2500 on closing basis and in that case, there is a STRONG chance of going to my final targets for the indian markets - 1800-2000 range on NIFTY.
Few stocks have meanwhile looked strong, but not too strong yet: NTPC is one of them.
I have reshorted all original shorts about 10 days back and they are giving me minor profits at this time - we probably will have another 1-3 distribution days before we break 2500.
Based on analysis of previous bear markets, I believe we will make it to 3500-3700 range atleast once (maybe twice) in the next year (2009). But, we will not cross 3700-3730 in 2009, no matter what. Ofcourse the market view is so bearish that not a single person agrees with me that we will goto 3700.
DONT GO LONG yet. Market is too weak right now.
Mutual Funds: I reviewed many of them and they are all very well placed. High cash levels. Stay invested in the good funds. Continue SIP. In addition, I am planning to buy a bit extra below 2500 nifty (only mutual funds), and then average down with higher amounts to invest until 1600.
Futures: I hope to go long in nifty futures from 2000 and average down (pyramid) until 1600 (no SL) and will then hold for 3500-3700. Very risky, and it is indeed going to be very rewarding if it works.
Wednesday, July 23, 2008
US and India comparisons
US - World's earliest democracy. India - World's biggest democracy.
US - there is a housing reform bill. India - there is a banking/insurance reform bill
US - tax rebate package - to boost economy........ India - farmers relief
US - elections. India - elections
US - Fed not raising rates as expected........ India - RBI raising rates, but slower than expected / inflation rise.
US - real int rates -ve ... India - real int rates -ve
US - markets still not recuperating much... India - market is 20% up from the recent lows
US - there is a housing reform bill. India - there is a banking/insurance reform bill
US - tax rebate package - to boost economy........ India - farmers relief
US - elections. India - elections
US - Fed not raising rates as expected........ India - RBI raising rates, but slower than expected / inflation rise.
US - real int rates -ve ... India - real int rates -ve
US - markets still not recuperating much... India - market is 20% up from the recent lows
Monday, July 21, 2008
Vote of Confidence and Market?
I continue to be bearish and am very suspicious of the current upmove - triggered by global rally, oil fall, expectations of UPA winning vote of confidence.
Long Term: bearish: will change only if nifty can go above 5200 or when it forms a longer consolidation base. Or when New High vs New low ratio changes to +ve.
Intermediate Term: bearish: can change if nifty goes above 4360-4400. This acted as temporary support before markets fell 10-15% (and some stocks, as much as 30-40%). This should act as a resistance zone and as a good SL. So far, market has not even attempted to go close to this number. It recently made a top @4180-4220. So, that will also act as a resistance zone and it will be difficult to break above it.
Short Term: bullish. Short term the market has already bounced up 300-400 nifty points and it still appears to be bullish due to oil cooling off and govt. probability of winning vote of confidence without the LEFT. However, oil cool off - whether it is only short term is a question and $130/bbl is not really low. Also elections in 4 months or 8 months should nt matter much. Infact, I think earlier elections are better for the markets - as there will be a clear direction sooner in that case. So, i think govt winning VOC may be bad for the market - but I am an amateur in this area.
Stocks showing great strength: SBI, ICICI, RELCAP, BHARTI (I am shorting these with the view that they will fall much more as the underlying fundamentals have not improved any bit and the deterioration is yet to even stabilize)
Stocks showing weakness: ALL stocks in all sectors, including the erstwhile leading sectors IT, Metals.
Targets:
Nifty futures: 2500 or lower - long term
Nifty futures: 3500 intermediate term (+/-50)
Nifty futures: 4200 immediate short term (+/- 20) and max seems to be upto 4400 (+/-50).
I am still 80% cash: 20% equity.
All my equity holdings have now been hedged - since I am new, my hedging may not be so good. But I am learning this.
Long Term: bearish: will change only if nifty can go above 5200 or when it forms a longer consolidation base. Or when New High vs New low ratio changes to +ve.
Intermediate Term: bearish: can change if nifty goes above 4360-4400. This acted as temporary support before markets fell 10-15% (and some stocks, as much as 30-40%). This should act as a resistance zone and as a good SL. So far, market has not even attempted to go close to this number. It recently made a top @4180-4220. So, that will also act as a resistance zone and it will be difficult to break above it.
Short Term: bullish. Short term the market has already bounced up 300-400 nifty points and it still appears to be bullish due to oil cooling off and govt. probability of winning vote of confidence without the LEFT. However, oil cool off - whether it is only short term is a question and $130/bbl is not really low. Also elections in 4 months or 8 months should nt matter much. Infact, I think earlier elections are better for the markets - as there will be a clear direction sooner in that case. So, i think govt winning VOC may be bad for the market - but I am an amateur in this area.
Stocks showing great strength: SBI, ICICI, RELCAP, BHARTI (I am shorting these with the view that they will fall much more as the underlying fundamentals have not improved any bit and the deterioration is yet to even stabilize)
Stocks showing weakness: ALL stocks in all sectors, including the erstwhile leading sectors IT, Metals.
Targets:
Nifty futures: 2500 or lower - long term
Nifty futures: 3500 intermediate term (+/-50)
Nifty futures: 4200 immediate short term (+/- 20) and max seems to be upto 4400 (+/-50).
I am still 80% cash: 20% equity.
All my equity holdings have now been hedged - since I am new, my hedging may not be so good. But I am learning this.
Wednesday, June 11, 2008
short covering bounceback?
I cant see todays bounceback any other way.
The stocks that had fallen the most - banks, realties - bounced up today.
Pharma kept leading up - Ranbaxy news showed up - which is very interesting and too much for a newbie like me to fathom. I own a lot of ranbaxy.
Too many people had told me that oil has topped - i dont like that view, yeah - that means - we are definitely in a bear mkt. Retail cant get it right so much on a top. :)
It will top someday soon - maybe another $10 single day gain will kill the rally.
My PMS - ASK and Religare - relationship managers told me that we are going to go up. No ways guys! I have asked for full redemption from ASK PMS now and not just the 70% cash I had there so far.
The bounce got perfect resistance at 4530-4550 - this area was a major support area and not being able to break it tells me bad things lie ahead.
More news have followed - RBI hiked repo rate ahead of scheduled meeting. Oil is back up 5$, so much for calling it a top. US indices are down 1.5%.
All this implies gap down and horrible day ahead. Looking forward to IIP data on thursday and Inflation data on friday - if we do bounce, and if we can break 4550 - highly unlikely with a gap down, we will meet resistance at 4620 and then at 4730. HIGHLY doubt the current rally to go past it.
Downside - I expect 4200 very soon - maybe even tomorrow or friday. Sorry for being such a sadistic guy, but too many people think they are smarter than the market and can ride agianst the trend. That is risky and injurious to your financial health.
The gap down will do no good to my order of redemption in ASK PMS, but I am going to force them to sell since they expect the "growth" folio of P/E of 4 (its not 4, but thats what they told me) to go up by 60% - ridiculuous!
I was going through a lot of charts and 90% (subjective ratio) of them are in horrible shape.
Short term target: 4200.
Intermediate term target: 4000 and then 3800-3850
Long term: 3500.
The stocks that had fallen the most - banks, realties - bounced up today.
Pharma kept leading up - Ranbaxy news showed up - which is very interesting and too much for a newbie like me to fathom. I own a lot of ranbaxy.
Too many people had told me that oil has topped - i dont like that view, yeah - that means - we are definitely in a bear mkt. Retail cant get it right so much on a top. :)
It will top someday soon - maybe another $10 single day gain will kill the rally.
My PMS - ASK and Religare - relationship managers told me that we are going to go up. No ways guys! I have asked for full redemption from ASK PMS now and not just the 70% cash I had there so far.
The bounce got perfect resistance at 4530-4550 - this area was a major support area and not being able to break it tells me bad things lie ahead.
More news have followed - RBI hiked repo rate ahead of scheduled meeting. Oil is back up 5$, so much for calling it a top. US indices are down 1.5%.
All this implies gap down and horrible day ahead. Looking forward to IIP data on thursday and Inflation data on friday - if we do bounce, and if we can break 4550 - highly unlikely with a gap down, we will meet resistance at 4620 and then at 4730. HIGHLY doubt the current rally to go past it.
Downside - I expect 4200 very soon - maybe even tomorrow or friday. Sorry for being such a sadistic guy, but too many people think they are smarter than the market and can ride agianst the trend. That is risky and injurious to your financial health.
The gap down will do no good to my order of redemption in ASK PMS, but I am going to force them to sell since they expect the "growth" folio of P/E of 4 (its not 4, but thats what they told me) to go up by 60% - ridiculuous!
I was going through a lot of charts and 90% (subjective ratio) of them are in horrible shape.
Short term target: 4200.
Intermediate term target: 4000 and then 3800-3850
Long term: 3500.
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