Fundamentals

First of all, lets put matters into perspective. 136.86 points drop in the market on a single day isn’t a big deal. On days where there are truly huge market driving bad news, the NSE ASI typically drops anything from 200 to over 300 points in a single day.

My concerns are continued signs of insecurity as the the market  opened deep in the red as a wave of pessimism surrounding BOKO HARAM bombings through the long weekend.

This rally has taken us back where we started this year at 20,671 as the NSE ASI closed at 20,683.46.

Even though there were some intraday strength, during early hours of trading, short term bearish momentum continue to rise and market sentiments continue to be generally bearish. The Index also created an Bearish Engulfing candlestick signal today..

Bearish Engulfing (Bearish Signal)

The bearish engulfing is a reversal signal composed of two real bodies of different colour. The body of the second candle should completely engulf the body of the previous candle. The larger the real body of the second candle than the body of the first candle and the stronger the preceding trend, the more significant the reversal signal.

The bearish engulfing is only valid if it occurs in an uptrend. First candle is bullish, second candle is bearish (different colors). Second candles body engulfs first candles body (ignore wicks).Bonus if second candle engulfs more than one candle.

Source: www.dailyforexjournal.com

Charting the NSE ASI shows:

1. The Index has recorded a New Low for the year and in a negative zone with a YTD of 0.23%
2. Its approaching 28th December  and 4th January Lows of 20,617 and 20,635 points.
3. A failure below January Lows of 20,635 points such a critical support point reflects a failure of confidence which will lead to a lot more lows.

This key Support level is what traders will be watching and a line where the Bulls need to bring out all Arsenal to protect this territory.

TA SIGNALS FOR JANUARY 23 2012

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