MarketGyaan: November 2009

NIFTY Daily Chart (INVERTED)

It is good written in one of TA book that If you want to buy stock in bull market you need to do just one thing. You need to inverse the chart and ask yourself one question whether you will sell now if answer come "No" then you should not buy that stock and if answer comes "Yes" then you should buy that stock.

Why I am telling you all this things? it is to explain you that why the current level is not comfortable to buy stocks. You can see yellow ellipse which is 20 DMA crossover 50 DMA which is bullish sign in Inverted chart. You can also see RSI below that chart it is also making higher lows (on inverted scale) which signs the reversal of trend anytime soon. I am not trying to anticipate anything in stock market either not advising any short position.

I am personally uncomfortable to buy stocks at current levels I would rather prefer to wait for some good correction of 20% - 25% from current levels. Now levels I am watching are 4953 and then 4890. If these two levels breaks then 1st stop comes around 4700 and finally if 4700 breaks then expecting the entire current trend will get reversed significantly.

Now want to give some input on Nikkei (Japan Index) it has potential to correct and rally well before world markets do, which has been seen in history also. Nikkei started correcting from 31st August 2009 which is still going on. Now it is coming in oversold territory and expected to move sideways till other markets get corrected.

According to Elliott Wave analysis the Major 5 Wave cycle of S&P 500 ended at 1576 and fallen in 5-3-5 formed. first 5 wave downside completed at 667 and 3 wave corrective is about to complete around 1114 so soon the 5 wave down to retest the low of 667 will start.

Coming to Dollar lots of talks happening on its bottoming out or not. Many analysts are still pessimistic on Dollar, the scenario I look same as it was at the time when S&P 500 reached 667 when many analyst telling about more downside in it. Now I don't understand how can one country can afford deflation of their currency, certainly this is for boosting US Exports but in the long run this will create more serious problems for US govt and if US is in problem it will screw whole world with its problem like what happened in 1929, 1970,2000 & latest 2008.

Now coming to astrological dates 1st to 5th December may come as reversal time for stock market, 1st week of January 2010, then 15th to 20th February 2010. Now keep watch on these dates as it can trigger some correction in days to come.

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