Weekly markets analysis for week ending 21 august 09

Weekly markets analysis for week ending 21 august 09

finally the 2nd week of august ended following 2 massive falls on the previous thursday & friday. At one time it generated the fear that nifty may straight head towards 13th july low of 3919 as part of the larger flat formation when operators on wednesday pulled nifty down to fall below critical support at 4380 to even touch 4360.well that was it, the bulls who were silent observers till 4360 came back with a bang and hammered the bears out of shape by forming the great copy book hammer that catapulted nifty to 4610 levels very next day on thursday. Friday followed up with a routine range bound flat that may continue till monday.
Although the week ended on a +ve note compared to its previous week, yet niftys weekly high of 4619 could not cross the previous weeks high of 4731 and at the same time breached previous weeks lows of 4464 to fall till 4360, finally rising to close at 4580 higher than previous weeks closing of 4481. So unless nifty moves up further from present levels to cross august 1st weeks high of 4731, nifty may rot within the 100 point range of 4620 to 4522 till such time a break out or break down takes place for a bigger move in the direction of breach. An upside decisive break out of 4620 with good volume can pierce through the previous weeks 6th aug intraday 3 black crows, to new highs above 4731 & a decisive breach of 4520 on the down side can see a stone like fall to cover the entire gap following the hammer of 12th aug till 4444 magic levels.
Another interesting feature to be noted is that, indian markets are lagging much behind other world markets when compared with weekly closings. This weeks closing of sensex & nifty were much lower than highs of june and july 09. All most all the indices of the world had this weeks closings higher than highs of both june and july 09.us, brazil, entire europe & australian indices had this weeks closings higher than june & july highs. Even japan, korea and hong kong too had a closing higher than both june & july highs. Even china after such massive falls closed above june highs so was with singapore. Sensex and nifty which closed the week at 15411 & 4580 are still much lower than june highs of 15600 & 4693 & july highs of 15732 & 4670.so seeing these facts & figures & comparing with those of other world markets, unless the things really turn pretty bad , there is every possibility of indian markets shooting up towards 2nd half of the coming week to breach june & july highs to move towards much higher levels. The effects of scanty rain fall and bird flu have been fully digested by the markets & there are signs of much improvements in this regard. However, the adverse astrological impact which the us markets will be grappling with during the coming week may be the only dampener during the week ahead to stall any speedy progress in indian markets.

Weekly markets analysis for week ending 14 august 09

Although last week saw nifty cross the psychological level of 4700, it could not sustain above it & the last 2 days saw massive correction to fall from the weekly high of 4731 to week end low of 4464 to finally close at 4481 just above the critical 4477 support level. The fall was induced by met wizards who said that although july had a 95% of rain fall, august 1st week had 65% less rain fall. (oh, what a comparison? & next time dont be surprised to find a day wise comparison of rain fall with a day of this year to the same day of last year) this coupled with time & again repetition of the same, by some interested news channels who presumably had shorting interest, saw markets crashing by 254 points in nifty in just 2 days from thursday highs of 4718 to fridays lows of 4464.
Although the correction was due, but the lightening speed surprised many, as there were not much of fii selling nor internal fund selling & it was much of retail liquidation out of fear. This more than 5% fall in just 2 trading days brought down nifty on a week on week closing basis to close down by 3.3% compared to its previous week ending 31 july. So one can safely say that nifty took a well deserved pause after 3 consecutive weeks of mega rise from 13 july low of 3919 to 4th aug high of 4731.with this weeks closing, indian markets have under performed compared to rest of the world markets.
Comparing with previous weeks close, as per closings of all the indices on this fridays close, in us markets, dow had a 2% rise & had a consecutive 4th week of rise, s&p500 performed much better having closed above 1000 mark. European markets had a consecutive 4th week of rise, australia, brazil too had a consecutive 4th week of rise, among asian indices, japan had a consecutive 4th week of rise. Singapore after 4 weeks of rise corrected this week. Korea surprisingly had a 7th consecutive weekly rise. China after 7 consecutive weeks of rise, fell during this week, so also taiwan after 6 consecutive weeks of rise had a fall this week. It was only hong kong which like indian indices had a weekly fall after 3 mega weeks of rise but in case of hong kong the weekly fall was less than even 1%.so, indian markets having under performed rest of the world markets, may show a sharp rise much faster than rest of the world markets perhaps from this week starting 10 august only.
As was written many a times earlier, the cross over of 20 & 50 day moving average has a great tendency of pulling the indices towards it & as on friday 7th august, 20 dma at 4470 was above the 50 dma at 4413 & one could notice how nifty came down to touch 20 dma & one should not be surprised to see nifty touching or even breaching 50 dma to induce an overall bearish sentiment before the next sharp up move to shoot high above the last weeks high of 4731 to move towards much higher levels. Long term investors must make full use of such falls in markets to quietly add on to their long holdings gradually.
Stock market cycles are unique and the impact of met, corporate results etc have a temporary effect on it. Be absolutely sure that new bull cycle has started from 6th march 09 and has a long way to go & one should not miss such "once in a life time" opportunity. One may be surprised to hear next week that met conditions are far better than last week or govt has taken adequate measures to overcome the poor rain fall condition. In fresh long term bull markets, there will always be corrections & these corrections in most cases go beyond ones expectations to induce fear & bearish feeling as had happened between 6th july to 13th july or on 21 & 22 july or on 28 & 29th july but the markets kept on moving up & up & one should not be surprised to see markets moving up & up again. Because the markets had gone up much higher from july lows of 3919 and also had crossed july high of 4670, it is now correcting to retrace a portion of the up move from july lows & once this cyclic retracement is over one will surely see a much sharper up move to record highs of the year beyond ones imagination.
Although the savage fall during the last 2 days of the week has shattered the hopes of many bullish swing traders who fear that the previous swing lows of 4420 or 4380 may be breached, they must realize that except for the announcement on uncertain met, there are no other negative news & the met conditions are such that it can change overnight. This type of met announcements are nothing new & similar predictions were also heard during june also but markets moved up only. So the met impact will be short lived & the markets are likely to resume the bull run.

Weekly markets analysis for week ending 07 august 09

If one remembers the news letter during last week of may, it was mentioned that during odd years, june month had always made a higher high than the may month and july month was even higher than june month. Although nifty failed to breach the june highs of 4693,cleaner index the sensex decisively breached the june highs of 15600 to move up till 15733 to close at 15670.it is just a matter of time only for nifty to breach june highs to move up further. As per statistical data from 1997 till 2009, although this month of august also is likely to be a +ve month being an odd year of 2009 one needs to be a bit cautious during the later part of august.
Most of the world markets are on the up move having breached their earlier highs of 2009 during last week. Dow having breached the critical level of 9175 on an intraday basis has not yet been able to close above it. On friday it closed at 9171 & most likely will breach it decisively very shortly to move higher up to breach the next critical level of 9711 to move towards the magic 10000 levels in coming months. However there will be many heart breaking mid week or week end falls in dow to trim the other world indices who are becoming bulkier day by day. However markets will move up & up only over the long term with routine corrections in between.
The only threat looming large over the markets is the likely hood of a mid august crash to be induced by astrological factors. Although similar sinister planetary links between sun, jupiter, saturn, neptune & rahu have created havoc in stock markets earlier that delivered lethal blow to the stock markets, yet there are a number of occasions when almost similar planetary links have pardoned the stock markets with just a minor blip. In fact moon & sweet venus not forming a nexus with the sinister combination may mitigate the severity to a large extent. So, let us hope for he best and assume that the few days from second week of august till end third week of august pass off smoothly with just normal corrections.
Last friday, sensex making a new high for 2009 after crossing june highs of 15600 to reach 15733 without nifty making it to new yearly highs looks a bit fishy for all those who feel that since sensex has made it nifty should make it. This is is the real bull trap set up for nifty f & o traders who were half jolted when nifty crashed intraday on friday to sub 4500 levels to move up at the end of the day. Although nifty will ultimately cross the yearly highs of 4693,but not without more such intraday jolts. In any case, nifty having decisively crossed & closed above the critical levels of 4480 & 4538, most likely will move to much higher levels in coming days grappling with minor corrections in between. A decisive close above the critical level of 4693 with volume may infuse new hopes for the bulls.