Strong Resistance at 77-78 for Jaiprakash Associates

Let us see some Technical Analysis on Jaiprakash Associates today . Looking at daily charts for last 1 yr , We can see an extremely strong Resistance area around 75-80 (77-78 to be precise).

update (Mar 18 , 2009) : Just the next day after posting this article , JAIASS opened higher and moved up and finally closed above the resistance levels of 77-78 , If markets move higher and Jaiass sustains above that level for some days , It can touch 100 .

There are 3 levels for trend lines which are conforming that resistance level . Look at the following chart to see in detail , click to enlarge the chart .






















You can see that 3 trend lines at different levels are conforming that point (77-78) as the resistance point .

Long term trend line is very strong trendline and thats the most important one .

Medium term trend line and short term trendlines are also important because they also put some weightage on the long term resistance point . This chart shows the prices Monday , till Mar 16 ,2009 .

Today on Tuesday , Mar 17 , 2009 , markets have corrected a bit after 3-4 up sessions in this bear market rally . and JP Associates as expected changed there direction downwards and closed at 74 after opening at 77 .

How should it be traded now ?

BUY if :

- Global markets are rallying and sentiments continue to be good .
- Prices cross 80 and sustain atleast for 2 days .

Stop Loss : Stop loss should be little below the 77 point , around 75 .


SELL if :

- Global markets rally comes to an end and over all sentiment turns negative .

Stop Loss : SL at max 79 or as per your trading money management rules .

Notes : A lot depends on overall markets sentiments ,be in sync with markets direction . Keep strict Stop loss . Appreciate and expect if markets do something random and do not follow technicals estimates . markets are supreme , not TA .


There is an article on "Should you Invest in Equity Directly" on my blog . Read it if you want .
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Markets week , Did you Short ?

In the last post , I had discussed the trading opportunity of Reliance-RPL merger news. But market direction was negative and one should always expect the unexpected rule , People who jumped into market and traded must have burnt there fingers , because after 15 min of market opening , the trend for market overall and Reliance and RPL was down and they were moving lower .

Today was an important day , as markets were near support point of 2680 and in the last hour of trade , it went below it and finally closed below the support level , which brings further weakness in market .




If you see this 5 day , 30 min charts , Markets have closed below the support levels of 2680. This does not look very good for Bulls now .

US markets are at 11 years low , I have taken a short position through PUTs and also hedged them using a CALL position . If markets go down as expected , i will make some profits , If they bounce back which is very unlikely now , then i will make small losses .

Markets must fall heavily now once it breaches 2500 levels . As I write this US markets have breached the 11 yrs low of 7000 on the news of $61.8 billion quarterly losses by AIG .

If markets open higher on Tuesday , I would like to get out of my call position and then hold the PUTS . If markets open lower , then i would like to wait for small bounce and then get out of my CALLS .

Wait for 10-15 min after markets open for getting true idea of where markets are going .

Manish
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