CRUDE OIL - may fall further !!

Crude Oil which touched a high of almost $120 in international markets has fallen heavily in last couple of days .
However signals were already available on the price charts of an 'impending downmove'. ( The power of charts, shall we say ????)

The above chart of Crude Oil on MCX clearly shows a 'negative divergence' on the RSI and MACD two commonly used indicators.

After touching a high of Rs 4785 it has fallen to current level of Rs 4500.Indications are strong that in coming days it may most likely test sub-Rs 4400 initially and then still lower levels of Rs sub-Rs 4200/-.

When Crude was at $120 levels, analysts on major TV channels suggested $150 in the next few weeks, while the Price charts are saying something opposite!!

It will be interesting to track both - the analysts target as well as the targets of the price charts

Happy observing ! (i presume none of you trade crude)
CA Rajiv D Khatlawala

Nifty - in a Corrective Channel !!

The current move from 4700 to the recent high of 5200+ in the Nifty is in a well defined upward corrective channel as seen on the Nifty chart.

Overhead resistance is at 5300 ( being the upper channel ) and thereafter a stronger resistance at 5400 levels.

Usually such a channels tend to get 'completed' when oscillators go in overbought zones.

Traders must watch out for the crucial support of 5100 - which , if broken should lead us to believe that the current corrective upmove is over.

Happy trading !

CA Rajiv D Khatlawala

Gold ... a Trend Reversal Pattern ?

Is GOLD REVERSING its TREND ???

Gold is forming what is technically called a "Head and Shoulder" formation. This is a trend reversal pattern suggesting a halt in the bullish trend .

The crucial level (based on the 'neckline' formation, to be watched is the 11500 level on Gold M contract. A break and close below this should lead us to the vicinity of the technical target of Rs 10000/-

The whole pattern will get negated now only on price rising above Rs.12350/-

Surely a security worth watching - even if you don't trade in Gold !!

Happy trading !
CA Rajiv D Khatlawala

Reliance Energy . . bullish Flag !

RELIANCE ENERGY

The scrip is showing signals of a potential upmove in the short term.

For the past few days it is moving in a narrow range - technically termed as a 'bullish flag'.

Short term traders can enter on break out of the range at Rs 1368 with a strict Stoploss at Rs 1290 for a target of Rs 1500+. ..

Long term investors may consider Rs 1100/- as the crucial support where the stock has seen multiple buying momentum.

Happy Trading

CA Rajiv D Khatlawala

The dollar Rupee - a revisit

(Above chart updated as of Apr 23, 2008)

After taking support at the crucial 61.80 % retracement , the dollar / rupee has shown signs of revival as it touched a high of 40.07 today (Apr 23) ..

I presume a close above 40.10 should give a further impetus to the dollar and thereafter I would be targeting 40.80 / 41 in the short / medium term . . .

Friends it is time to dig out stocks which should benefit from a depreciation of the rupee ( i.e. a rise in dollar against rupee) . ..

Happy trading !!

CA Rajiv D Khatlawala
More about me at www.pushpdin.com

Crompton - a good technical set-up!

The technical price chart of Crompton Greaves suggest a double bottom formation of the recent down move.

The price has closed positive today at Rs 272/- ( Apr 22)

The scrip is now ripe to test Rs 290 in the very short term and Rs 330/ in the medium term.

Keep a stoploss at Rs 248 ( for the target of Rs 330).... (Short term traders may keep Stoploss at Rs 258)

Incidentally TTML , RPL and the Sensex targets mentioned in earlier blog posts have performed well ...

Hope you all could take benefit !

Happy Trading

CA Rajiv D Khatlawala
Know more about me at www.pushpdin.com

Fibonacci in nature !

Most technical analysts use the fibonacci numbers and ratios while carrying out their analysis.

In fact most of the participants of my workshops on technical analysis are ashtonised by fibonacci especially when I provide them with real life examples of the relevance of these numbers and ratios.

So I thought that for the benefit of everyone, I may include a link to an interesting article which i found during my last Sunday's internet browsing session

The article is titled "Fibonacci in Nature" and contains a lot of examples of their ocurrence and recurrence.

Check out these links

http://www.world-mysteries.com/sci_17.htm
http://www.goldennumber.net/

I hope every one is enlightened further as to how little we know !

CA Rajiv D Khatlawala