Total Pageviews

Tuesday, February 1, 2011

All Downhill from here

Lets look at the count that I am concentrating now where the uptrend had started back in May last year.

Going by that count we are in the 3 of a C wave here. 1 and 2 are shown and the parallel lines shows the retracement from 1 to 2 which was a little less than 23.6%. Then started the 3rd wave. My favorite for this 3rd wave is that 138.2% extension of 1 , i.e 5135. Yesterday we went as low as 5410 to retrace back to 5507 and then today we opened up and touched 5561 which is exactly 38.2% retracement from 5410 low. So we can count it as the 2nd wave of this 3rd wave. So looking for more downside in the coming 3 days at least.  Also it looks like a bearish engulfing pattern appeared today.The market is also much lower than its 200DMA for the first time since June last year.

Added a couple of other classic technical indicators as well. On the above chart we see that the MACD is clearly showing downtrend.  The ADX (green line) is clearly moving towards 40 . Shows that the downtrend is only growing stronger.The RSI is at 30 but i think it has lot of room to move downwards.Expecting to slide along the lower edge of the Bollinger Band in this downtrend. Looks like its 2008 all over again for the Indian markets . At that time too the correction had started in January.

Another important result fo today :RELIANCE INDUSTRIES. The biggest stock in the markets has broken 900 . Shocker for a lot of people.Lets take a look at its chart too. I have to tell you this . I had never seen this chart . It had been trading in a range since the last two years.!!!!!Since it went up from  the March 2009 low .
Looks like that break down of 900 is REALLY REALLY crucial.

All this is happening in spite of the dollar going down .The Indian markets were related inversely to the dollar at least to the A point. This is what happens to a market when its TIME IS UP. I cant even imagine what will happen if  we see a massive dollar rally some time later in the year. For now , the BEAR HAT is firmly placed on my head.

See you down hill. Thanks.

No comments:

Post a Comment