Sunday, May 6, 2012

The BSE 30 - Ichimoku Study - Week: 30 April to 04 May 2012 - Kijun Sen Holds..

.....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 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 - 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 - 04 May, 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)

Last week (click) we concluded that, price holding above the Kijun Sen and MVWAP 34, keeps the Bulls in the game.
'2' marked on the chart points to this week's candle closing below the MVWAP 34, but a whisker above the Kijun Sen. 

Conclusion: Bulls have lost a lot of ground again last week, however if Index stays above the Kijun Sen, its not yet  'Advantage Bears'.