Reliance Industry (RIL) Technicals : Showing the direction?!?

Reliance Industry (RIL) is considered as torch bearer for Indian Stock Market, and it is, without much doubt. After the recent crash RIL recovered on 9th April onwards, earlier than the market, and NIFTY followed it. On 17th April RIL showed high of 2714, but closed in red at 2640.

Thereafter, RIL remained strongly between 2600-2700, even during the continuous fall in NIFTY for six consecutive trading session from 2nd May to 9th May, and eventually RIL slipped below 2600 on 9th May.

Thereafter it tried to recover with the market, but gradually it has been slipping beyond 2500 and on 30th May it went to the low of 2390 and closed at 2403, showing weakness in the trend.

Last two falls were with greater volume, almost double, than average trading days. Increase in volume suggests that people inclined towards the current trend. So in a down day more volume shows that there was large sell of than average and it is also negative indicator. People who have been holding the script since some time sees no upside in near future thus start selling off.

Such attitude is clearly reflected in Chaikin Money Flow (CMF) indicator . On 30th May RIL generated largest negative bar on CMF in its recent history, which shows people are distributing (selling) the script.

Accumlation/distribution line is very clear. A/D line is sliding since 21st May and eventually has gone in negative territory , after more than six weeks it has gone in negative territory, lastly it was in negative on during third week of March’08.

Interstingly , MACD lines have been sliding down since 9th May, earlier than all other indicators, and with negative histogram. MACD 20 line is now in negative territory.

NIFTY Technicals : Bear’s Delight

As everyday passes NIFTY shows more and more bearish indicators.

A. First bearish reversal , Three Black Crows, was generated during 1st week of May .

B. Again Three Black Crows Second indicator appeared of during on 22-23-26 May

C. Today (29-05-200 candle showed bearish engulfing pattern, and the mood is confirmed by the amount of (E) volume which is higher than average. (However, the reason for such high volume can be assigned to the settlement day)

D. Today 20 Day EMA (Red line) has crossed under 50 day EMA (Blue line), which indicates downturn.

F. MACD has been in negative with negative divergence.

G. Accumulation/Distribution indicator clearly reveals continuous intense distribution.

NIFTY : Climax reached

Today NIFTY reached to the climax after the ongoing tussle between bulls and bears and ended the suspense of last four weeks. This time also the chart has generated Three Black Crows indicator as previously did between 1-3 May. But this time the force is greater bears appears in complete command of the situation. All other indicators are clear as crystal going negative .

Midterm chart also appear bearish as CMF (Chaikin Money Flow) shows distribution all the way and RSI (Relative Strength Index) has failed to reach anywhere near 70, let alone above it.

Tata Steel (TISCO) : Showing strength

Tata Steel (TISCO) is moving up smartly. The chart shows very good bullish sign. The price is very well above the 20 days EMA which is at 818. MACD shows sharp upward move with consistent and positive histogram. Chaikin Money Flow (CMF) shows strong continuous accumulation and which is leading Relative Strength Index (RSI) just a tick above 71 which is bullish indicator. Presently the chart of TISCO is showing a classic bullish chart with all positive indicators.

Price movement also shows great support around 800. Now as it is nearing 900 it is facing resistance and perhaps consolidate a bit, but is more likely that it may cross 900 level on next trading session as bulls has much more force than bears at this level.

NIFTY or roller coster?

Roller coaster is what NIFTY has been in last one month and I have been enjoying the ride. I am not trader at heart and do not participate in the daily/short term activities. But being a Gemini the volatile and chaotic situations gives me thrills and excitement

The NIFTY chart is pleasant to eye, at least for short term. On 2nd May it touched to psychological height of 5299 and closed in red. Infact, the bearish trend was indicated a day ago on April 30, but there was no other indicators so that red closing was not significant. On side note, Candle Chart showed red bar on 2nd May , however OHLC showed green , perhaps therefore candle chart showed more clearly about the trend reversal.

That after 2nd May , for five consecutive days were bears delight. However, it noteworthy that during these six red days the fall was gradual and not sharp as expected. So, either bears were weaker than expected or bulls did not give up easily and fought back without giving much ground.

12th May was D-day, and bulls were pushed to the level 4914, it was bottle neck situation , but bulls reiterated strongly and recovered some of the ground lost on previous day. On next day, bears put more force but positively the lower level was 4944, higher than previous 4914. On 14th the bulls started from 4958, where it was left on the previous closing and marched and closed at 5012, just above the previous days opening of 5009, as if challenging the bears.What happened thereafter in two days on 15th and 16th showed clear strength of bulls.

Ofcourse, now as the level of 5200 is approaching, bears are ready to sho(r)t back. Now level of 5300 is crucial and required to be conquered, but bears will not give up easily. All indicators are turning into positive, except the Chaikin Money Flow (CMF) which is disheartening. CMF is still in distribution mode, of course histogram is decreasing with positive divergent.

Have you danced ?? Hugged anyone ?? Do it now and here !!

NIFTY : End of tug of war?

After the crash which started from 10-01-2008, market showed recovery from Mid-March and went up. In 1st week of April’08 showed uptrend on the chart but with some doubts.

But there after it started rallying down within first three trading session of May’08 chart showed bearish reversal with Three Black Crows. As the reliability of this indicator considered high, I was expecting some solid sell off with loss of 100-150 in one day. However, the marked slided lazily , mimicking the uptrend and confusing the experts and analysists .

Now, all indicators confirm the bearish mood (well, indicators were saying loudly, but I kept fingers crossed :). EMA 20 (red line) is downword, volume are at daily average (ideally it should be decreased during phase). MACD line crossover , with negative divergent (and in negative too ) in histogram. William R% indicated nose dive from overbought to oversold.

One can expect a technical re-bounce , but more down side will be there. Check this example.

NIFTY indicates bearish reversal : Three Black Crows

I have been enjoying recent market volatilities as they provide me good opportunities to buy stocks at lower valuation , and such volatility makes interesting chart patterns which I enjoy studying and analyzing. So, please dont take my views too seriously.

NIFTY , has been closing on lower side for last three trading sessions and on the candle stick chart it has appeared as Three Black Crows. Three black Crows is considered as the bearish reversal particular when the price has been in continuous uptrend, which is the case with NIFTY.Ordinarily one black candle indicate the interference in bullish trend , second black candle confirm bearish mood, perhaps by the way of profit booking and third consecutive black candle make the reversal obvious.

Recognition Criteria for Three Black Crows:

1. Market is characterized by uptrend.
2. Three consecutive long black candlesticks appear.
3. Each day closes at a new low.
4. Each day opens within the body of the previous day.
5. Each day closes near or at its lows

Therefore, in short term market move to lower levels. However, large selling pressure is not expected as there no negative news. Perhaps  traders may want  wait till new bullish signal appears on the chart.

More readings on Three Black Crows.

• http://www.fxwords.com/b/bearish-three-black-crows-candlestick
• http://www.leavittbrothers.com/education/candlestick_patterns/bear/three_black_crows_bearish.cfm
• http://www.candlesticker.com/Cs74.asp
• http://www.optionsoutlet.com/stock_ebooks/candlesticks/bullish_3blackcrows.html

Bharat Bijlee (BBL) : Consolidating

Bharat Bijlee (BBL) has been consolidating for last 3 weeks between narrow range of 2100 to 2200. Last three sessions were showing some  uptrend with slight rise in price.  It is making very interesting chart pattern for break out. However, it is not necessary that consolidation is always cause breakout towards upside. The direction of the break out is decided by the the quality of future news/result or circumstances.

BBL also shows two spikes in the chart where volume have jumped much greater than average daily trading with  , which perhaps can be assigned to inside trading, as the results date is approaching near.  MACD and RSI indicators also show clear and consistent upward trend, one can expect a good break up in the price with  good jump in the price.

Tata Tele (TTML) waiting to jump

On 15-04-2008 TTML started making strides from 28-00 and went upto 37-00 (about 33%) in 6 trading sessions with good amount of volume. Thereafter it has been resting ,because of profit booking, between 37 to 35.60 nicely. Perhaps , it will make another stride from here to somewhere above 40.