I TOLD YESTERDAY THAT "IT WAS SEEN FIRST TIME THAT AFTER DISCOURAGING PEFFORMANCE BY INFOSYS TECH. INDIAN MARKETS MOVED UP FAST. AS SENTIMENT DAMPENS AFTER INFOSYS RESULTS THEREFORE YESTERDAY RALLY WAS SHORT COVERING RALLY OR GENUINE UP MOVE. THIS WILL BE CLEAR AFTER CONFIRMATION OF SUSTAINABILITY ABOVE 200 DMA."
AS 15-04-2009 RALLY FOR SHORT COVERING THEREFORE WHOLE RALLY RETRACED ON VERY NEXT DAY ie YESTERDAY.
I ALSO TOLD YESTERDAY THAT "AS IT HAS BEEN OBSERVED MANY TIMES THAT BEAR MARKET RALLIES REVERSED BACK AFTER TESTING 200 DMA THEREFORE THIS LAST CONFIRMATION IS MUST FOR ASCERTAING BEGINING OF BULL MARKETS THAT INDIAN MARKETS ARE SUSTAINING ABOVE 200 DMA OR NOT."
AS I SUSPECTED SAME HAPPENED THAT INDIAN MARKETS REVERSED BACK YESTERDAY AND CLOSED BELOW 200 DMA.
I ALSO TOLD YESTERDAY THAT "I WOULD LIKE TO ADD IT SPECIALLY THAT AFTER YESTERDAY SHARP RALLY SUFFICIENT INTRADAY SELLING AND SELLING PATTERNS ON DAILY CHARTS ARE MUST FOR REVERSAL OR CORRECTION OF MARCH 2009 PULL BACK RALLY."
I AM SPECALLY MENTIONING IT TODAY THAT FROM YESTERDAY DOWN MOVE THIS CONCLUSION SHOULD NOT BE DRAWN THAT ONLY FROM YESTERDAY FALL MARCH 2009 RALLY HAS REVERSED. ALTHOUGH YESTERDAY DOWN MOVE WAS WITH GOOD VOLUMES BUT MORE BEARISH PATTERNS ON DAILY BASIS AND MORE INTRADAY SELLING PATTERNS ARE REQUIRED FOR THE BEGINING OF DOWN MOVES. AS PER MY VIEW INDIAN MARKETS WILL TRADE SOME MORE SESSIONS NEAR 200 DMA AND WHICH SIDE OF 200 DMA WILL SUSTAIN FINALLY ON THAT SIDE GOOD MOVES WILL BE SEEN.
1- IF SUSTAINS ABOVE 200 DMA THEN WILL RETRACE 2008 CRASH
2- IF SUSTAINS BELOW 200 DMA THEN WILL RETRACE DEEPER MARCH 2009 PULL BACK RALLY.
200 DMA IS MOST CRUCIAL AVERAGE BECAUSE IT GIVES CONFIRMATION TO LONG TERM TREND. AS PER MY VIEW INDIAN MARKETS WILL HOVER NEAR ABOUT IT SOME MORE SESSIONS BEFORE CATCHING FINAL DIRECTION.
MARCH 2009 RALLY IS GLOBAL RALLY LED BY US MARKETS THEREFORE GLOBAL MARKET MOVES AND SPECIALLY US MARKETS SHOULD ALSO BE WATCHED CAUTIOUSLY. DOW JONES WAS TRYING TO CROSS 8000 MARK FOR THE LAST 14 SESSIONS AND IT CROSSSED IT YESTERDAY VERY MUCH CONVINCINGLY AND WITH INTRADAY BUYING PATTERNS. EXCEPT THIS OTHER US AND EUROPEAN INDICES ALSO CLOSED IN GREEN WITH GOOD BUYING PATTERNS.ASIAN MARKETS ARE ALSO POSITIVE TODAY MORNING THEREFORE SENTIMENT IS STRONG TODAY MORNING.
ALTHOUGH INDIAN MARKETS CLOSED AT LOWEST LEVELS WITH SUFFIENT LOSS YESTERDAY BUT TODAY GLOBAL CUES ARE POSITIVE AND MARCH RALLY HAD BEEN STRONGER THEREFORE SENTIMENT IS NOT DAMAGED TODAY MORNING. AFTER STRONG MARCH 2009 RALLY INDIAN MARKETS ARE NOT PREPARED FOR CORRECTION AT THIS MOMENT BECAUSE ONLY ONE DAY(YESTERDAY) SELLING IS NOT SUFFICIENT FOR CORRECTION AND MORE SELLING IN INTRADAY CHARTS AND SELLING PATTERNS IN DAILY CHARTS ARE REQUIRED FOR CORRECTION.AS RESISTANCE DEVELOPED BETWEEN 3460-3510 YESTERDAY THEREFORE CONSOLIDATION REQUIRES TO CROSS THIS RANGE. INDIAN MARKETS WILL TRADE FIRST IN YESTERDAY RANGE (3360-3510) AFTER GREEN OPENING TODAY AND WITHIN THIS RANGE WILL PREPARE FOR NEXT MOVE.200 DMA IS AT 3420 TODAY AND IT IS BETWEEN YESTERDAY RANGE. AS PER MY VIEW INDIAN MARKETS WILL PREPARE WITHIN YESTERDAY NIFTY RANGE FOR NEXT MOVE AND BREAK OUT OF YESTERDAY RANGE WILL GIVE CERTIFICATE TO BEGING OF BULL PHASE OR CONTINUATION OF BEAR PHASE.POSITIONAL TRADES DECISIONS SHOULD BE TAKEN EITHER AFTER BREAK OUT OF YESTERDAY RANGE OR AFTER ACCURATE ANALYSIS OF INTRADAY CHARTS WITHIN THIS RANGE.UNTIL MARKET IS WITHIN THIS RANGE TRADING DECISIONS CAN BE TAKEN ACCORDING TO SENTIMENT OF A PARTICULAR MOMENT.
GREEN CLOSING IS EXPECTED TODAY AFTER POSITIVE OPENING. RANGE BOUND TRADING WITHIN YESTERDAY RANGE WILL BE SEEN TODAY.
(LALIT KUMAR DHINGRA)
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