Saturday, April 28, 2012

The BSE 30 - Ichimoku Study - Week: 23 April to 27 April 2012 - In and out of the Kumo..

......Regulars can skip below and go straight to the chart......


We do a weekly Ichimoku study, to complement our 'Triple Screen Technical Analysis', of the markets we track to learn Technical Analysis.
When taking the 'weekly' time frame, to use the Ichimoku Cloud, we need to consider...

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 on...

Quick Reference : 
Chikou Span - purple 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:

BSE 30: Medium Term View (or) Week Chart (or) EOW with the Ichimoku Cloud: 

The BSE Sensex 30 - End of Week Chart - 27 April 2012  

Last 7 Signals seen on BSE 30 - Week Chart (EOW) marked on chart above:
1. Senkou Span Cross: Strong Bearish Signal (S)
2. Chikou Span Cross: Weak Bullish Signal (C)
3. The Kijun sen cross: Weak Bullish Signal (K)
4. The Flat Kumo: Bullish Signal (Ko)
5. The Tenkan Sen/Kijun Sen Cross: Weak Bullish Signal (T)
6. The Kumo Breakout: Bearish Signal (B)
7. Chikou Span Cross: Strong Bearish Signal (C)

Also marked on the chart, in Blue ... to discuss this week's action ...
2: The Chikou Span (purple line) has finally crossed the price line bearishly (C). As this action happened when the Price was below the Kumo, the Bearish Signal is deemed 'Strong'.
3: The last candle has moved back out of the Kumo - Bearish Kumo breakout (B

Just as in last week, the Price is above the Kijun Sen and M VWAP 34 -  This is Bullish .
See circle - the Bullish Senkou Span cross, which seemed imminent - may be delayed. 
The Price has moved in and out of the Kumo for quite a few weeks, its still near this wall.

Conclusion: Bulls have lost ground again last week, however staying above the Kijun Sen, Bulls still have a chance to move up.