New year to bring cheer to the markets?

OUTLOOK: POSITIVE

Nothing in the markets seem to suggest that this current round of consolidation is ending. In fact today on the technicals, the moving averages crossovers suggest that the positive line has finally broken over the negative line thereby indicating that  the positive uptrend has resumed. (how long will it last is entirely a different question). US markets are holding up well for the year end, and analysts in US are already advocating buys into Chinese and Indian markets...lets hope our markets give us reason to cheer for 2009.

Nifty Upmove? Is it over?

OUTLOOK: STILL POSITIVE

Since the time I had written my previous post Nifty seems to have gone into some sort of negative territory, but is it actually so??? Sometimes we are led into believing things that might not really be, and that is where the charts come to the rescue. Although we have been going down for the last 3-4 trading sessions, it is technically still not a downturn yet. Some of the stocks that were moving up have continued to do so and even in these 3-4 days have moved up 15-20%!!! Also considering that this period currently should not be taken as a period of downturn but a period of relative consolidation....only if we break down considerably and break support levels can we say that the downtrend has again begun, but currently it looks far from it!!!

My sense is that we should not worry till the time the MACD goes below Zero, currently it is still in the positive territory coming up from the negative territory after months of being there!!!

MACD: still above zero

 so it would be very interesting to see how the Jan series pans out, sp considering that earnings might not be good for fourth quarter....but one thing we all must remember is that the markets look forward 6 months in advance, so if the markets start to recover we can expect that our results of Q3 09 CY would start looking bright as well...

SENSEX UPMOVE VERY LIKELY!

OUTLOOK: VERY POSITIVE

Now with the Nifty and Sensex up in the green (on the charts), some happy times should be here....Specially considering that this uptrend is coming after a long time. The last uptrend that we saw was on 29 th of July, and it did not last for a very long time, lets hope that this uptrend lasts longer...

MACD : Just getting above the zero into the positive territory

Also as I have written in my many previous posts some of the stocks have already seen there bottom and now have started to consolidate, this can mean that smart money could be finding its way back into these stocks....

As the classical definition of the last leg of a bear market goes: " When the markets would not react to bad news, and latch onto any good news to move up".....this definitely seems to be coming true wherein the bad news of IIP nos was shrugged off by the markets and the good news of inflation coming down was lapped up by the markets....

Its time to be cautiously optimistic at last...keep an eye on MACD, we need to trade above 0 to remain in the positive zone....

October IIP (index of industrial production) Numbers, not Encouraging

OUTLOOK : SLIGHTLY POSITIVE

In my previous post, I had written that we are staring at a short term trend reversal and the upmove for the markets look imminent. Well we have been able to hold our own and move up smartly from the 8500 levels yet again. Now the 8500 levels on the sensex forms a support of sorts and till that is taken out convincingly on a closing basis we don't have much to be worried about. The trend is almost about to be positive, though we will have to trade above the current levels for some more days for that to happen convincingly. For e.g. in the diagram you can see that we are very close to the zero mark, once we cross that zero mark we would be in the positive territory...The only negative in all of this is that the IIP nos have come negative in 15 years!!! October IIP nos have come at -0.4% which is a shocker considering that India is one of the fastest growing economies in the world...One can only hope that it is not a harbinger of things to come and the impact on real economy do not start to reflect in terms of slowdown or even worse a recession....

Nifty Sensex Upmoves Likely

OUTLOOK : POSITIVE

From the looks of it, we might be out of the woods, if we can have a couple of days of decent upmoves. The upmoves of the past few days has ensured that we are close on the charts of positive territory. Now with the news flow of the rate cuts coming in, the markets should gain some traction. Until there is a sharp downmove, we can safely assume that we would be out of the short term bearish trend if we close in the greens for a couple of more days!!!

What needs to be seen now would be whether the FII selling subsides (which in any case it does due the Christmas break abroad), and if it does then there is enough domestic money waiting on the sidelines to take the markets up in a hurry. Only a cap of caution being the quarterly results which are not expected to be good...If we can have some decency on that count also then we can safely say that we might have seen the worst behind us.

As written in my previous posts, last series has held up well, and the retesting and holding of the lower levels of around 8500 have augured well for the markets. Now with the triple testing of the bottoms, we might have formed a base from which we can aim for higher levels. . . provided that the levels of 8500 hold up. Also a couple of other factors seem to be in the favour are, that we have started to trade above the Moving Averages line and if we can trade in this region for some more days, not giving up the gains then we would have firmly gone out of the bear phase, at least for the short term.

MACD: slowly trying to get into positive territory, now left with just some more ground to cover

image courtesy:indiabulls

Sensex Fall? News flow is not encouraging

With the series starting on a negative note today, and the US markets spooking due to fears of a credit card meltdown amounting to $1 trillion, the picture is fast turning into less than serene!!! Now if such a scenario plays out, then frankly speaking we are staring down the barrel...lets hope that scenario does not happen... as we have already seen the banking industry in a deep recession. Some good articles on the trouble brewing in that industry have already started to surface

Dr Robert Manning, author of Credit Card Nation: The Consequences of America’s Addiction to Credit and an authority on consumer finance issues in the US, says refinancing of credit card debt into home mortgages temporarily reduced the short-term risk and enhanced credit card profits.

“With the collapse of the housing market, credit card delinquencies are rising and more people are using their credit cards to pay for adjustable rate mortgages.”

“This is similar to industry strategy of offering multiple credit cards to pay one with another,” adds Manning, a research professor at the E Philip Saunders College of Business at Rochester Institute of Technology.

However, this strategy of repaying home loans through credit cards cannot continue forever. Once credit card holders start running out of the maximum credit allowed, trouble will erupt at two levels: they will start defaulting on their home loans and if they are not in a position to repay their home loans, it is highly unlikely that they will be able to pay up their credit card bills either.

By using credit cards to repay their home loans, borrowers are just delaying the inevitable. “The problem is delayed but eventually it all catches up,” says Das. To cut a long story short, the $1 trillion US credit card industry will be in for a tough time ahead.

source: Sify.com

other good articles on the same subject:

The days of easy credit card offers and extravagant credit lines may be over for most Americans as lenders now seek to tighten both credit card eligibility as well as credit limits.

The pullback is expected to hit even credit-worthy consumers who are already reeling from the impact of an eroding economy. However a credit card crisis will come as the worst news for the beleaguered banking industry and pound it with another wave of losses after being at the receiving end of the recent mortgage crisis.

According to an estimate, Credit card lenders wrote off nearly $21 billion in bad credit card loans in the first half of 2008 as an increasingly higher number of borrowers defaulted on their payment. As the rate of unemployment rises and tens of thousands of workers are laid off, analysts estimate that the credit card industry will incur losses of up to $55 billion in the next year and a half.

The looming credit card crisis has compelled major lenders like American Express, Bank of America and Citigroup to enforce stricter standards for applicants and has led many to discard the riskiest customers from their portfolios. Customers appear to be the worst-hit as they lose once-easily available options like home equity and transfer balance to meet their credit card obligations.

source:

http://www.thebusinessedition.com/banks-fear-credit-card-crisis-round-the-corner-1617/

As far as Nifty and Sensex goes there are no specific signs to look out for, except that we need to hold 8300-8500 levels, on a closing basis and if we crack on them then we are looking at lower lows and a series that will not augur well for the markets...and not to play out the fact that we still are in a negative zone!!!