ICHI-NIFTY

Ichi Ideas: Nifty might look to consolidate - 11th January 2011

2011-01-10T19:47:00.000-08:00

The benchmark Nifty tanked another 141 points on Monday, the 10th January 2011 , and ended at 5,762.85.

How much will the index fall in the short term? Where is the resistance and support levels?

Ichimoku analysis might provide some interesting clues for the very short term. The "one-look" Ichimoku chart given above throws some interesting pointers to ponder upon.

The closing price for Nifty as on 10th January was 5.762.85.

The short term Tankan Sen, or the 9-day modified average which takes the highest high and lowest low into account, stands at 5,961.00.

The slightly longer term Kinjun sen, which takes into account the 26-day period, stands at 5,951.10.

Both the Tankan Sen and the Kinjun Sen are far higher than the closing price - a clear bearish signal for the indices.

Another signal from the Ichimoku chart is the Chikou Span. The historicalprice at Chikou Span is 5992.80, much higher than the current price. Yet another bearish indicator pointing to lower markets in the short term. But how much? and where will be the pullback?

The Kumo Cloud is also higher - in other words, the current prices are much below the kumo cloud - yet another bearish indicator. Senkou Span A is at 5.937.18 and senkou span B is at 6,014.43.

The point worth noting is that both the Tankan Sen and the Kinjun Sen are flattening out, indicating short-term consolidation and minor pullback.

It is advisable to exercise caution and wait for clear signals in either way.

Ichimoku Analysis: Outlook for Nifty - 10th Jan 2011

2011-01-09T10:15:00.000-08:00

The market ended the first trading week for 2011 in a disappointing note, having tanked more than 140 points in the Nifty and nearly 500 points in the Sensex on Friday, the 7th January 2011.

The benchmark Nifty has ended below the psychological 6,000-mark while the Sensex breached the 20,000-mark.

What is in store for the markets on 10th January 2011? Will the market rebound?

The one-look Ichimoku chart depicted above throws up some interesting points worth pondering.

The benchmark Nifty has ended at 5,904.60, well below the Kumo cloud, the first time Nifty closing below the Kumo cloud since the third week of May 2010.

The closing price of 5904.60 was below the Kinjun Sen and the Tankan Sen.

The Chikou Span also ended below the lagging price, another negative sign.

One indicator of solace that needs consideration is that the Tankan Sen has not crossed over the Kinjun Sen. The Tankan Sen is at 6,032.33 and the Kinjun Sen is at 5,951.10. Both the Tankan Sen and the Kinjun Sen are flattening.

The market might look for a short term bounce back on Monday with limited gains. The Nifty might face stiff resistance at the Senkou Span A, or the lower wall of the Kumo Cloud at 5,937. If the index manages to clear that hurdle successfully, then it might face stiff resistance again at 6,014.

There might be temporary respite for the downtrend in the Nifty and some minor gains may be witnessed over the next few trading sessions, as long as the Tankan Sen stays above the Kinjun Sen.

HUL - Time for short-term pullback?

2011-01-05T19:27:00.000-08:00

The stock price of Hindustan Unilever (HINDUNILVR) ended the trading session on 5th January at 325.70, registering a gain of 4.80 points on a day when the overall indices declined nearly 200 points in the BSE and about 66 points in the Nifty.

The scrip has been gaining, or ending every trading session in the past six trading days in the green, rising from as low as 294.40 as on 28th December 2010, thus gaining as much as 31.00 in the past six trading sessions.

Following the recent rally, the scrip has moved into an extremely over-bought territory, and the technical indicator, the 14-day RSI indicator shooting up to 74.54 at the end of trading on 5th January.

We feel that the stock is due for a minor correction in the short term and might move southward as early as 6th January. Traders might take note of the precarious situation and take advantage of the situation and book profits from the recent rally.

The “one-look” Ichimoku chart depicted below also hints about the Kumo Cloud turning red in the next 2-3 trading sessions, and the indications for the stock turning negative or bearish in the short term are more clear.

Shrewd investors and short-term day traders might avail this opportunity to make some quick cash in this counter.

Chart Analysis : STATE BANK OF INDIA - 4th January 2011

2011-01-04T19:40:00.000-08:00

At the end of trading on 4th January, the stock price of State Bank of India (SBIN) ended at 2,735.60, down 86.50 points and was one of the main stocks that dragged the overall indices lower in the Indian share market.

What caused the decline in the Indian market, when the global cues were not bad? In fact, the major averages on Wall Street ended with moderate gains on Monday. The Asian markets that opened for trading on Tuesday were also trading in positive territory. Why did bank stocks slip in Indian market, especially that of SBI?

May be, the chart depicted at the top might provide some cues. The chart depicted above is the One look Ichimoku chart, that gives a clear picture.

The stock price closed at 2,735.60. The short term indicator, the Tankan Sen, stands at 2,788.50, while the broader Kinjun Sen stands at 2,914.55. The other indicator, the Chikou Span – which tracks the closing price 26 days ago, is at 2,879.75. The short term indicators do not augur well for the short term.

Where is the Kumo cloud?

The Kumo cloud has turned red since the 28th of December 2010. The Senkou Span A stands at 3,063.25, while the other one – Senkou Span B – stands at 3,145.00.

Probably the red kumo cloud might give cues for the downtrend in the bank stock, in technical terms. Concerns about hardening interest rates in the economy in the near terms might have also impacted market sentiment.

The outlook for the very short term seems negative, from the technical perspective.

Traders might refrain from taking fresh positions for the time being and may wait for taking fresh long positions around 2600 or 2650.

ICHI IDEAS: SESAGOA - Time for short-term pullback?

2011-01-02T19:58:00.000-08:00

The stock price of SESAGOA ended at 328.55, exactly at the 100-day moving average price on 31st December 2010.

What will be outlook for the stock at the start of the new calendar year ?

The one look chart – the Ichimoku chart – given below throws some interesting indicators to ponder.

The short-term Tankan Sen stands at 310.15, while the slightly broader Kinjun Sen, or the 26-day average, stands at 307.85. The Chikou Span, or the price 26-days before, is at 317.90. The indicators augur well for the stock in the short term in a sense that they signal bullishness.

But…

What does the Kumo Cloud say? The Kumo cloud is in the red, with the Senkou Span A reading at 342.05 while Senkou Span B is at 348.03.

With the price presently hovering at 328.55, which is below the cloud, it is more likely that stiff resistance will be faced above 330, more precisely at 342, for the stock in the short term.

Another technical indicator worth noting is the RSI index. The 14-day RSI indicator is hovering around 61.40 as at 31st December, very near the overbought levels.

We foresee that the upside for the stock is quite limited in the short term. The stock might face stiff resistance below 340 in all probability, and might drift lower to as low as 315 over the next few trading sessions before consolidating for further upmoves in the medium term.

Current Price : 328.55 (as at 31.122010)
Resistance #1 : 342.05
Resistance #2 : 348.00

ICHI IDEAS: SUZLON - Time for Consolidation

2011-01-02T19:26:00.000-08:00

The share price of Suzlon ended the year 2010 in a buoyant mode, having gained more than 14% in the month of December and ended the last day of 2010 at 54.70.

What is the outlook for the stock in the near term early January?

The one-look chart of the stock, the Ichimoku chart, depicted below gives a clear picture.

Tankan Sen, the short term moving average, rests at 51.75, while the slightly longer-term moving average, Kinjun Sen, is at 49.18. Chikou Span, the other indicator, which tracks the price 26 days ago, lies at 46.65.   Thus, the short-term indicators point to a bullish opening for the stock at the beginning of the new year.

But how long will the rally sustain? What does the Kumo Cloud say?

The Senkou Span A is at 54.80 while Senkou Span B is at 55.35. The Kumo cloud had turned negative on 28th December 2010, and this might act as a dampener to the bullish sentiment

The closing price of 54.70 lies below the Kumo Cloud, and as such Senkou Span A and Senkou Span B will be the two immediate points of resistance.   On Friday, the price did test the 2nd resistance of 55.35 but could not pierce it.

Another technical indicator worth mentionining at this point is the RSI index. The 14-day RSI stands at 59.80. In technical terms, any reading above 70 indicates overbought condition while any reading around 20 indicates oversold condition. But, historically, any reading in low 60s for this stock is an overbought condition and the stock turns southward briefly.

We feel that the stock might face stiff resistance at 54.80 and 55.35 going forward and most likely decline to 51.00 in the short term as part of consolidation, before making any further moves.

Current closing price : 54.70
Resistance #!   :   54.80
Resistance #2   : 55.35

SESAGOA: Is Kumo cloud turning red?

2010-12-31T19:30:00.000-08:00

The technical analysis of the Sesagoa stock, using Ichimoku analysis, is given above.
The closing stock price as on 29th December is 323.00

One look chart, or the Ichimoku chart, provides these additional indicators to ponder upon:

The short term indicator – Tankan Sen – is at 305.90 and the other indicat0r = Kinjun Sen is at 308.98. slightly above the short term Tankan sen

Another indicator, Chikou Span – which refers to the price 26 days behind – is at 326. In other words, today’s closing price is below the price 26 days ago – a bearish indicator.

The other two indicators, Senkou Span A and Senkou Span B, which form part of the Kumo cloud are 344.16 and 345.13 respectively. In other words, Senkou Span B is slightly more than Senkou Span A – a key indicator that the Kumo Cloud is turning red. The forward indicators for Kumo Cloud do not project a favourable turnaround in the near term, raising speculation that the prices might drift lower in the short term.

It is advisable to adopt a wait-and-watch attitude and not take fresh positions in the stock at present.

What is Ichimoku Analysis?

2010-12-27T19:49:00.000-08:00

One of the many technical indicators that analysts use to study the movement of prices in the stock market is this ICHIMOKU ANALYSIS.

As you rightly guessed, Ichimoku is a Japanese term that means "one look". This Ichimoku analysis is used to gauge momentum along with future areas of support and resistance. The Ichimoku indicator is comprised of five lines called the tenkan-sen, kijun-sen, senkou span A, senkou span B and chickou span. This indicator was developed so that a trader can gauge an asset's trend, momentum and support and resistance points without the need of any other technical indicator.

This charting technique was created by a Japanese newspaper writer. It does look very complicated when a trader sees the indicator for the first time, but don't hesitate to give this indicator a try because the complexity quickly disappears once you gain an understanding of what the various lines mean and why they are used.

The five components of this interesting indicator are described hereunder:

Tenkan-sen (Conversion Line): (9-period high + 9-period low)/2))
The default setting is 9 periods and can be adjusted. On a daily
chart, this line is the mid point of the 9 day high-low range,
which is almost two weeks.

Kijun-sen (Base Line): (26-period high + 26-period low)/2))
The default setting is 26 periods and can be adjusted. On a daily
chart, this line is the mid point of the 26 day high-low range,
which is almost one month).

Senkou Span A (Leading Span A): (Conversion Line + Base Line)/2))
This is the midpoint between the Conversion Line and the Base Line.
The Leading Span A forms one of the two Cloud boundaries. It is
referred to as "Leading" because it is plotted 26 periods in the future
and forms the faster Cloud boundary.

Senkou Span B (Leading Span B): (52-period high + 52-period low)/2))
On the daily chart, this line is the mid point of the 52 day high-low range,
which is a little less than 3 months. The default calculation setting is
52 periods, but can be adjusted. This value is plotted 26 periods in the future
and forms the slower Cloud boundary.

Chikou Span (Lagging Span): Close plotted 26 days in the past
The default setting is 26 periods, but can be adjusted.

NIFTY poised for higher open on 27 December

2010-12-25T09:16:00.000-08:00

Nifty ended the penultimate week for calendar year 2010 in positve territory with a gain of 31.60 points at 6,011.60 on Friday, the 24th December 2010. In a day of relatively thin trading across the neighboring markets in Asia, it was heartening to note that the broader Nifty index surpassed the pyschological 6,000-mark

From the technical perspective, the Nifty had thrown out some interesting indicators that augur well for optimism and higher opening on Monday, the first trading day of the last trading week for calendar year 2010.

The above chart gives a broad picture of the key levels - following Ichimoku Analysis.

Tankan Sen, the short-term average, stands at 5,909.85, while the broader Kinjun Sen stands at 5,883.28, at the end of the trading session on 24th December 2010. At the end of trading on December 23, 2010, the levels of Tankan Sen and Kinjun Sen were 5,872.48 and 5,917.20 respectively.

On Friday, the short-term Tankan Sen has decisively crossed over the longer-term Kinjun sen from below - a definite sign of bulllishness in the market. This bullish sign is signalling a positive opening on Monday.

Yet another bullish sign for positive opening on Monday is the Chikou Span. A close above 5,998.60 - being the chikou span, also augurs well for the market sentiment.

However, a word of caution. The present level of prices falls within the Kumo cloud - a technical region of NO TRADE. The outlook for the day will be cautious optimism with a limited range bound trading. The upside is capped at 6146 while the lower level will be 5906. With F&O series closure due on Thursday, volatiliy might be in play on the last week of trading for 2010.