Trend lines: What do they say?

The markets closed the week flat to end the month of August with a fall of 4.7 pc. Let us see what is in store for the month of September.Since, fundamentals do not change every day or every week to a very large extent, this week, I tried to capture the trend lines in 3 different time frames.1. Daily Timeframe:We are very close to breaching the down ward sloping trend line from 6093. Breach of this upwards means the whole down move may be over and...

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Settlement Week to drive the Markets

The markets had a sharp dip followed by recovery in the later part of the week to end at 0.7 pc down. The Rupee, Government Bonds and the markets all recovered towards the end of the week.1. The Equity Markets will have their monthly settlement on the coming Thursday. Many times during the time before settlement, markets move in opposite direction to how they have moved throughout the month. This is a thumb rule and need not be the case always.2. The Markets have over reacted and there could be some recovery towards the mean. The markets always...

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Who sold on Friday?

The markets tanked on Friday thus undoing the gains of the entire week in 1 week and closing the week a net 1 pc down. What led to this panic fall?1. The surprising part of Friday's fall was that there was no big gap down. In fact the market was trading mildly negative for some time. The usual suspects of FIIs have been blamed. The FIIs sold only 600 crores of shares and DIIs bought 732 crores.2. Even more surprisingly, for the month of August the market is down more than 4 pc but FIIs have actually bought 1400 crores worth of shares.3. This would...

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Short Term Bounce can Materialize

The markets lost another 2 pc to close the week at 5565. The market appears to be oversold in the short term. This can result in some kind of bounce. We would have to see the nature of the bounce.1. The FIIs have stopped selling in the moth of August. They have been net buyers so far in the month. The markets have continued to fall despite this.2. 5400-5500 have a confluence of supports from which a bounce is due. When the markets fell from 6229,...

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Long Grind Ahead looms large

The markets continued on their downward spiral to close lower by 3.5 pc to close at 5677. The markets are clearly in their 3rd leg down from 6229. We may just be entering a 12-18 month bear market phase.1. If this is merely a correction from the top of 6229, the markets should end their correction soon. Below 5627, we can confirm that the entire rally which started in Dec'11 is indeed over.If this is a 3 leg correction A = 6229 - 5566,                                       ...

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