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UPDATE : 17APR 2009

India and China need to cool down to avoid overheating. There are signals of that appearing on momentum indicators.

However, the DOW halting closely below its crucial resistance at 8132 looks positive. But FTSE is little away from its crucial resistance zone 4070-4085. The technical picture is negative until these given resistances are surpassed. The economic data and earnings of major corporates, especially of the financial institutions needs to be watched these days.

The outlook and levels given in stocksweekly are still relevant. Trade accordingly.

UPDATE: 16APR 2009

Sensex got repulsed at its 200dma 11335. But Nifty moved well above our given mark 3451. Sensex needs to move above 11335 to corroborate that it would be headed towards 12500 levels in the weeks ahead. As per the momentum indicators a correction was due in these markets. But the intraday movement suggests that these markets have been correcting on intraday basis as they dipped far too deep everyday before moving higher.

In the given situation, it is strongly a buy on decline market with stoploss as per the Stocksweekly . Fence sitters would have to wait for that correction. Existing longs are advised to book some profits at 11600 on Sensex and3675 on Nifty.

DOW has been finding it difficult to cope with the economic data. But if there is any good quarterly results from Citigroup tomorrow, would help it move above our given mark 8132. Until then!

Asian markets are also buy on decline.

Our Stocksweekly is still relevant. Trade accordingly.

Updates: 15Apr 2009

Market is giving more heed to poor economic data. Better earnings are being ignored. It would take some more time to restore faith in economy because the world economies suffered due to reckless acconting and regulatory procedures.

Watchout for more economic data in the days ahead.

Levels given in the Stocksweekly are still relevant. Trade accordingly.

As per the expectations, Asian markets are still in a far better position than Western markets. DOW has taken support tad below our mark 7757 which looks positive. But FTSE100 has breached the given support 3950 which is not a positive signal in the short term. But still they haven't breached their crucial support levels as per the stocksweekly.
Therefore, let us hope for a start of another uptrend from current levels in these markets. Yet, the overall picture reflects divergent ways for western and Asian markets in near to medium term. But still the macro-economic scenario in the developed economies would surely have considerable impact on the world economies as usual, particularly that of the U.S.

India and China are displaying a lot of strength. India did a volte-face yesterday and the bears were taken off guards. Some analysts have declared reversal of trend in these markets, implying that the bear market is over for these two emerging economies. But many long term bears would still be waiting for higher levels to be breached. The consensus is that a breach of 10950 would be a signal of trend reversal on BSE SENSEX.

Five wave up move is/should be drawing to a close in SENSEX/NIFTY and markets could start trending down for a correction anytime soon. But higher targets are intact as the stoploss is far too low from current level. It is a buy on decline market with appropriate stop loss depending upon risk taking capacity.
The levels given in stocksweekly are still relevant. Trade accordingly!

It is interesting to note that inspite of a 190 points cut in the DOW yesterday, the VIX(volatility index) remained in a cooling mode. This is in line with our expectation that the bulls are still in the charge of the markets. We had given a detailed outlook on VIX on saturday.

Technically, almost all the markets are still well above their crucial support zones. However, the FTSE100 is displaying more weakness as we have been anticipating in our outlook earlier. This index has formed three black crows pattern which is a very bearish signal. Still we can give it a benefit of doubt because Nikkei also had similar pattern on its weekly chart a few weeks ago but got negated in this rally.

The wave traders know that this is now a correction to five wave up move we had over the last three weeks. Uptrend is still intact until the given stoploss is triggered. But these stoploss marks are still far below from current levels. Some markets may just trend sideways before they start another bout of uptrend.

Given the bleak fundamental outlook, we are not out of the woods and long term is still very negative. Long term investors may not get overwhelmed by the ongoing positive trend.

Stocksweekly is still relevant. Trade accordingly!

The suggestion that heavy tax regime on corporates is not punitive but acts as a regulatory measure, sounds appealing because this measure would restrain the corporates from fudging their books -especially in the recent case of Satyam.
Even at g20, this point of view could find its mention in the consensus, if reached! Imposing more taxes on these financial institutions would be a better way to regulate them. It will serve another purpose of generating more revenue and mitigate the burgeoning fiscal deficit to quite an extent.

Technically, the markets have discounted all the negative news, including GM and unemployment. In fact, it is felt that the markets had written off GM as bankrupt long time ago. But this is not to say that we are out of the woods. It is purely a technical bear market rally, finally to trend lower and new lows are not ruled out in the months ahead. There is no significant indication of value buying so far.

Stocksweekly is still relevant. Trade accordingly!

GM issue could be one of the excuses for yesterday's correction but the analysts' view that the forthcoming G20 meeting would just end up as boondoggle -nothing useful- was the major cause!

Yesterday's decline in Asian markets was not accompanied by any big volume. It implies that the Asian markets are still willing to rise higher in the days ahead.

The DOW and FTSE also haven't closed below our stop loss levels so far. So, there is still some hope of support from there as well. Otherwise, the Asian markets, especially China and India are expected to have their own divergent way in short to medium term.
Stocksweekly is still relevant.

Economic data is coming out on expected lines -howsoever bad- and the stock prices were at very low levels for more than appropriate length of time. It would have been too much for the prices to stay at such low levels for such a long period. Therefore, the bears must have developed cold feet and started covering their short positions though, there still are sufficient short positions holding in an anticipation that this bear rally may not last longer.

SENSEX/NIFTY have moved higher above their recent highs and the MIs and moving averages are signaling a very positive outlook in the near term. In other words, the Asian markets are buy on decline.

Most of the markets have left gaps behind. Markets could reverse back so that these gaps may get filled in the days to come. Watch out for the weekly outlook this Sunday on stocksweekly!
In the meantime, long straddles in options is recommended at a nearby strike, for medium term. May/June series would be better for medium term set up.

(U.K./European markets are not showing any enthusiasm in this Asian rally. The European markets need to be watched for their impending weakness).

Charts suggest that INDIA and CHINA would be up for grabs at the slightest signs of recovery.

We are in a bear market rally though, U.S. and Europe are not showing any signs of enjoying this rally fully. They may remain in sideways mode with positive bias over the near term.
We should bear in mind that the world economy is not out of the woods and the given long term down targets in stocksweekly are still valid. Ride this rally with caution and later accumulate short positions at higher levels.

Stocksweekly is still relevant. Trade accordingly. Sensex could be headed towards 10000+ in the days ahead.