UPDATE

(Rajandran)

This Post is for those who Believe in Simple EMA Trading System

Before going to the picture EMA Traders will agree a concept that

IF 13 EMA > 34 EMA > 55 EMA THEN = BULL MARKET

IF 13 EMA < then =" BEAR">

A BULL MARKET WILL CONVERT INTO BEAR MARKET IF 13 EMA < 34 EMA This is
the first sign of a real Bear Market.

Ok Now Coming to the charts. Charts shown below is a 3 Year nifty weekly chart.

For Clear Picture click on the above chart

Some Observation

The Above Chart can be divided into three phase

1)BULL PHASE
2)BULL to BEAR TRANSITION PHASE
3)BEAR PHASE

1)During the BULL MARKET EMA's 13, 34 , 55 are acting as a good supports on weekly basis and the pattern 13>34>55 remains steady till the end of BULL PHASE

2)DURING THE TRANSITION PHASE i.e 13 EMA <>

3)AND BEAR MARKET CONFIRMS when 13EMA > 34 EMA > 55 EMA where 13,34,55
will act as a strong resistance this remains steady till BEAR MARKET PHASE

Current Scenario

Normally Supports or Resistance will Hold those resistance levels for a maximum
period of 2-5 Weeks.

Current Scenario Shows that 13 WEEK EMA is acting as a nice resistance for the past
3 Weeks and looks like nifty is in a deep trouble here around this zone.

And My recommendation is to remain short until nifty breaks 3113 Levels.
on closing basis. Any Violation of these supports will lead nifty towards 3250-3300-3500 levels where exactly 21 EMA and 34 EMA could possibly meet the Nifty Weekly Candles.

And for those people who are still having confusion with recent sure in US Markets on 02 JAN 2009. Here is a picture for you....

Chart Shown here is a Weekly DOW CHARTS with oversold RSI Levels

For Clear Picture Click on the chart

There is once again problem for dow with 13 WEEK EMA. Also check out the MASSIVE
Rise in RSI which shows that sell of is clear in one or two days in DOWJONES . Also Earlier too dow respected 13 EMA Resistance as shown in the charts.

Looks Long Term Investors should stay away at this level as the upside looks capped.
CASH is king should be the best strategy at this level.

Dear Friends,
· A majority of the analysts in the recently concluded Cnbc Tv18 Poll believed that an immediate market bottom is in place and in 2009 we are unlikely to break 2253. I believe one can trust the outcome of the poll. Wait a minute; before one becomes overtly bullish we closed yesterday 35.25% above October27th lows· I have always maintained that bear market teaches discipline and timing. A good trader is always tested in a bear run as compared to a Bull move. Below is the excerpt from one of my posts on Niftyviews for week starting 27.10.08.

· “ For nifty I still maintain that 25XX for me is a Bottom in Nifty. Technically we might break the same on Monday. But I will try and start deploying my remaining cash now as the next big trend to play out will be on upside. Kindly be cautious, as I might be terribly wrong. I don’t like averaging portfolio or stocks. If I add some stocks it will be only because I like the story over a period of time. I wont buy any of the downtrodden stocks like Unitech, Dlf or Parasvanth, the primary reason being that I am still negative on them. The only reason why I will start buying now is because the smart money is now moving in and not moving out. I might be wrong here but I am sure I wont be terribly wrong here.”

· As of now I am in the camp, which believes that the bottom for 2009 is in place. I have my own reasons that the bottom wont be broken unless we see worse macro economic situation for a continued time horizon going forward. I have mentioned it a number of times before that, I was surprised by the intensity of the fall below 3500.We made a bottom of 2253 much below anyone sane had anticipated. At the same time Nifty is now hovering at 3046 levels. There are reasons why I believe that the conditions that lead to the fall have improved. There is a belief that the worst of Sub prime crisis is behind us. In India the liquidity problem has improved dramatically. With liquidity I mean the MIBOR has eased considerably from 20% points to 5% yesterday.

· I wont be positional short in this market unless the pivots are broken. I will be truthful with my analysis; Nifty has not behaved like a classical bear market from 2505 to 3111 odd levels. The answer to the question might lie in the fact that this was the worst bear market in recent decades. So why should one have a problem if the rally is not a classical bear market rally. When one under performs in downside, It can obviously outperform in Upside.

· Companies have a precarious habit. Some of them always need capital to grow, as there internal resources are insufficient to meet the scale of their business. Most of these companies have been butchered in the recent mayhem. I have noticed something peculiar, which I ought to share. Etc Networks and Titan industry have recently raised funds via private placement of debentures. I believe this might be one of the major sources of funding to many more companies in future. It might be one of the major reasons for the credit crunch to ease.

· I am not sure where we are heading as of now. As always two schools of thoughts emerge. One suggests a range bound trading in the broad 2910-3250 zone. The other suggests an upward breakout of the converging triangle with a target above 3500. I am not Bullish on Nifty till Unitech, Suzlon and Reliance power is a component in Nifty. At the same time one needs to have a cautious stand going forward.

· There is too much hue and cry being made for the small cap rally. Even Murphy will agree, with a 90%+ erosion from all time Highs in a year. Small cap rally was always due. I was never a fan of penny chaps and I wont ever be one.There is immense value in some Midcap/Largecap stocks even at cmp. But then I have always looked beyond the large cap stocks to invest in where the companies are like perpetual bonds growing year after year.

· I had shared one investment idea recently on Gillander Arbuthnot and company. I like the 191 years old Kolkata based company as it is just like a Sovereign Government Bond with a High dividend yield and an added appreciation clause. The company was listed in Kolkata stock exchange and got listed in March 2006 in BSE. It is a part of Gd kothari (Nephew of G.D Birla.)Group and has four basic business segments namely: - Tea, rental income of Gillander House, Textiles and engineering division. Do note I have investments in the equity of the company that are long term in nature.

· Coming to Nifty we have closed above 20dma and 50dma post September 09,2008.We need a three day closing above the same levels to see next round of short covering. I believe midcaps/largecaps and not small caps might lead the next round of rally, if any. Above 3161-3241 next cluster of resistance is at 3551 odd zones. One more factor worth watching out is the IIP numbers along with the results season. Have a great trading week.
·
·
Nifty support-2912,3020 ( BELOW 3020 WILL TAKE SMALL SHORTS WITH SL AT 3055)

Nifty resistance-3113( old resistance zone),3245

forecast

In the Chinese almanac - Astrology, 2009 is Yin Earth Ox Year or Ji Chou Year, which is earth element. Yin Earth 2009 Year commences at 0050 on 4th February 2009 and 4th January 2010. Ox is the second sign of the Chinese zodiac. In the Chinese Astrology, each year is made up by two Chinese characters, one called the Heavenly Stem and Earthly Branch for the other. The Heavenly Stem for 2009 is Ji. 2009 is called the Yin Earth Ox.

2009 the Heavenly Stem is Earth, is not Metal & Metal is finance, so Government will implement new ideas, trying new concepts or policies to rescue the Bombay Stock Exchange and National Stock Exchange. Investors confidence is not so good so the will be more cautious and practical. Stock Market will be showing major ups and down during February 2009, Please be careful between 8^th January 2009 and 14^th February 2009. This period may damage Stock Market. However, for long term investors 2009 will be good year. We will see some improvement in Metal sector during 2009. Ox symbolizes Bullish Trend so second Half of 2009 will come up with some good news for Stock Market. February 2009, April 2009, July 2009, and October 2009 , these months will come with bumps for Stock Market 2009.