ASI is poised to extend up - 10% Target Hit on Chou, and EMER trending, 5% thus far.

Only last week end did I post 2 trading ideas on CHOU and EMER. Within the week the CHOU target was hit (Buy -10.00/Sell - 11.20)  and EMER is remaining with an increase of 5%.

ASI finished the week higher than the high of last friday the 8th instant , closing at 6422 points. That was an increase of 56 points over that day's close. The index had edged up 168 points since the 4th of this month, which means that it had gone up 21 points on average per day. We have another 9 market days to go during the month, and if this momentum persist then it will add 189 points more to end with an increase of 357 points. This momentum as against the earlier up move between 10th March 2016 and 16th May 2016 is a little bit too fast. That trend brought in 846 points at an average increase of 19.67 points whilst now it is averaging 21 points. In my earlier posts too I mentioned that the speed when the index was heading North is too fast as against the pace it fell in this present rally started on the 10th of March 2016. If this speed continue we will see the Market ending the Month of July at 6611 points. Another unique feature in this trend is that even a novice of elliot wave counting (like me) could be confident on the formation. As such my personal opinion is that we have resumed the 3rd wave. The 2nd corrective wave nicely retraced a little more than 50% of the 1st wave which was something RARE in the recent past. Then as I mentioned in my last week's post the index crossed above the 1000 sma as well. Another moving average line I'm interested in seen breaking is the 200 sma on the weekly chart. This could be broken perhaps within the next week as it is at 6473 points. Another 51 points more.

Weekly RSI in 2016 came down below 20 points for the 1st time since 2008. This shows how low the sentiment is amongst the market players. However this is great news for the ones who cherish riding the waves.

Many are still wondering of a down fall. That is natural at this stage of the trend, pessimism is so very high. But if someone noticed how the market behaved last week, it goes on to show that the market has many opportunities.

Eastern Merchants - 10% in 2 weeks, else exit.

Eastern Merchants (EMER.N.0000) - Price broke out of the near term resistance of 7.00, also was successful in trading above the 9sma, whilst the stochastic signal line went above, except for the macd still remaining below the zero line. This looks a potential 10% trade as such buy at 7.00, to sell at 7.90, while the stop must be at 6.70, or 2 weeks which ever is 1st.

Please note that this is purely a trading strategy and a minimum holding period of 2 weeks nothing more. You must close the trade on the last day of the 2nd week or at the stop prices given above. As such buy only an amount that you can bare, and preserve your capital. OTHERWISE PLEASE DO NOT BUY. IF YOU DO NOT PRACTICE DISCIPLINE WHEN TRADING YOU ARE NOT FIT TO DO SO.  

Short Term potential 10% returns - Maximum Holding period - 2 weeks

With the momentum build up in the market from the 5th instant, we see many short term trading opportunities PURELY FROM A TECHNICAL TRADING PERSPECTIVE.

The Rules are i. Buy on 2 or more of the following happen - Price, macd, 9sma, and stochastic breakout. ii. Sell at a 10% target. iii. Stop if the stock comes down by 5% or in 2 weeks, which ever happens 1st.

CHOU - Price Broke out of the previous side way channel. Stochastic signal line is above, broke out of 9sma, and the macd gave the 1st histogram line above 0. Signal is looking very bullish. Therefore buy at 9.80. Sell at 11.10 which will give a 10% return after cost. Stop at 9.30 or in 2 weeks, which ever happens 1st. As the stock has a strong buy signal, you may buy at 10.00 as well, to Sell at 11.30, and Stop at 9.50, or 2 weeks which ever happens 1st.

Please note that this is purely a trading strategy and a minimum holding period of 2 weeks nothing more. You must close the trade on the last day of the 2nd week or at the stop prices given above. As such buy only an amount that you can bare, and preserve your capital. OTHERWISE PLEASE DO NOT BUY. IF YOU DO NOT PRACTICE DISCIPLINE WHEN TRADING YOU ARE NOT FIT TO DO SO.   

Present Prices are so attractive - DO NOT IGNORE

Relative Strength Index in September of 2008 was heavily oversold at around 6.9 points and the ASI was around 2100 points. Thereafter the RSI was rising although the ASI kept on falling making it a positive divergence. This was an indication that the selling momentum in the market was receding, although the sentiment of the market was negative. Ultimately the Market re-wrote the history by propelling it to new record highs. Ever since then the RSI never fell below 15 points till 2015 when it happened once, as it came down to around 14 points. But in 2016 the RSI fell below 12 points on 2 occasions, indicating the pessimism amongst the Sellers, stemming from factors in and out of the Country. An oversold market is bad for the Sellers but never for the Buyers. Since the lows in the RSI we now can see that the level of Selling pressure is not as great, but it did check the levels below 20 points on the RSI. One good indication for me is that the trend of the RSI is in the same direction as the ASI. Thus we do not see any negative or positive divergence just yet. The biggest draw back is the pessimism and fear psychosis prevalent in and out of the Country. Unfortunately the actions that are taking place inside the Country are rather unfortunate for the direction of the market and is confusing all the stakeholders of the Country. But this negative scenario in the Market is benefiting the Long Term Investors and a few individuals, which is the Minority just like a Minority in the Society of the Country is reaping benefits due to the present state of affairs. 

Present indication is encouraging as the oversold effect is not as big as what we saw a few months ago.

 

1000 day Moving Average

One of my personal indicators for the CSE is the 1000 day moving average. As you know the 1000 sma is the average value taken by dividing the closing values for the last 1000 days. WE ARE TRADING IN AND AROUND THIS LEVEL. I see this as a major game changer for the market when it pierce through up or down. As can be seen in the following chart the ASI did break down through the 1000sma on the 27th of June 2016, but broke out convincingly yesterday the 8th of July 2016. That for me is a bullish signal. ASI tried to break down the 1000sma at 6262 on 20.01.2016,but got supported and the ASI moved up about 200 points. Again the ASI came down and pierced through 1000sma at 6264 points on the 15.02.2016. This time it could not hold, and nose dived to 5862 points. Drop of 402 points from the 1000sma. On the 12th of April the it broke out of the 1000sma at 6280 points and went upto 6708 points till the 16th of May 2016. On 27.06.2016 the ASI broke down at 6335 points, BUT dropped only to 6254 points. That was 81 points only. Which means that the latest recovery was not bigger than the previous. Now that is another bullish signal to me.

I know you may not have time to read further. But I value your interest in reading it up to this far.
There are many more indicators that are suggesting that the MARKET is going to go NORTHWARDS. I will cover them in the next few days. PLEASE DO NOT IGNORE THE MARKET. IT IS CALLING OUT LOUD FOR YOU TO INVEST AS THE PRESENT PRICES ARE GIVING YOU MANY BARGAINS.