Sunday, May 20, 2012

BSE Sensex - Ichimoku Study - Week: 14 May to 18 May 2012 - Pink of Stealth

Our Conclusion of last week, was on the dot (click).

Last 7 Signals seen on BSE 30 - Week Chart (EOW) as on chart below:

1. The Kijun sen cross: Weak Bullish Signal (K)
2. The Flat Kumo: Bullish Signal (Ko)
3. The Tenkan Sen/Kijun Sen Cross: Weak Bullish Signal (T)
4. The Kumo Breakout: Bearish Signal (B)
5. Chikou Span Cross: Strong Bearish Signal (C)
6. The Kijun Sen Cross: Strong Bearish Signal (K)
7. The Tenkan Sen/Kijun Sen Cross: Strong Bearish Signal (T)

The arrows on the chart point to...

3. The Chikou Span (Pink Color Line) is stealthily approaching the Price line looking at crossing it maybe next week - that would be a Bullish Signal.
4. This week we see the Red Line (Tenkan Sen) cross the Blue line (Kijun Sen) from above. This signal is Bearish, also 'cause it happens below the Kumo its Strongly Bearish!.  
5. The Oscillator is ticking into the minus.

Ever since the Kumo Breakout (B) we have had 4 Red Weeks + 4 Bearish Signals in a row.
Next week the Longs have a shot at a Green Bullish Signal as in '3'.
Nifty although deep in the red currently - has a potential to pause and even reverse based on above.

BSE 30: Medium Term View (or) Week Chart (or) EOW with the Ichimoku Cloud:  
The BSE Sensex 30 - End of Week Chart - 18 May, 2012.  

Introduction (for New Readers):

.....Regulars can skip this part......

We do a weekly Ichimoku study, to complement our 'Triple Screen Technical Analysis', of the markets that we track, in our quest to master Technical Analysis.

When taking the 'weekly' time frame, to use the Ichimoku Cloud, we need to consider the following..

The standard settings for an Ichimoku Kinko Hyo chart are 9, 26, 52 and are used on EOD charts.  
When Ichimoku was created back in the 1930s, a trading week was 6 days long.  So we have one and a half week(9), one month(26) and two months(52). 
Now that the trading week is 5 days, we should actually use 7,  22 and 44 instead. 
However, the majority of systems, worldwide, still use the old settings 9, 26, 52. 

We need to study markets, on a weekly basis on this Blog.  
How do we fit 52, 26 and 9 into that need?  With one candle being one week?
There are 52 weeks in a year, 26 weeks form two quarters (or a half year) and 9 weeks equal about 2 months.  Fits the old logic - albeit differently.
Presto, we have a longer term view with the same settings!

So, if you like to move off the beaten track, for a change... do read on...

Quick Reference : 
Chikou Span - pink line,
Kijun Sen - blue line, 
Senkou Span A - black line, 
Senkou Span B - grey line, 
Kumo - grey shaded area,
Tenkan Sen - red line.

Useful resources (free) from the Web: