b. Higher usage of sugarcane for producing ethanol in Brazil and Thailand .
| Following stocks are recommended for LONG | |||||
|---|---|---|---|---|---|
| Script | Prev. Close | Recommended Price | Target 1 | Target 2 | Stoploss |
| CHAMBLFERT 31JUL2008 | 74.0000 | 75.0000 | 76.5000 | 78.2000 | 71.0000 |
| UP TO 73.3 IS GOOD BUYING LEVEL | |||||
| HEROHONDA 31JUL2008 | 787.2500 | 800.5000 | 820.0000 | 839.0000 | 785.0000 |
| 800 IS BULLISH BREAKOUT LEVEL. | |||||
| RANBAXY 31JUL2008 | 492.8000 | 493.5000 | 507.0000 | 521.5000 | 474.0000 |
| UPTO 483 IS GOOD BUYING LEVEL. 503 IS BULLISH BREAKOUT FOR TARGET2 | |||||
| RNRL 31JUL2008 | 100.5000 | 101.5000 | 104.0000 | 109.0000 | 97.5000 |
| 104.5 IS BREAKOUT FOR TARGET2. | |||||
| Following stocks are recommended for SHORT | |||||
| Script | Prev. Close | Recommended Price | Target 1 | Target 2 | Stoploss |
| No recommendation for SHORT positions today. | |||||
Is the Nifty is Heading to 4530-4860-5350?
It has been a long and arduous scaling down from the peaks for the bulls, and after being bludgeoned yesterday, today's rise was a welcome. Nifty opened around yesterday's close of 4190, and shot up about 70 points. Subsequently remaining almost throughout the day in extremely bullish territory, notched a day's high of 4327, before closing at around 4315.
The day is what candlestick practitioners would call a Bullish Engulfing. This has also closed all the down gaps, thus negating the cluster Island reversal that had raised its fearsome head.
However, an interesting scenario awaits traders, which may hold a lot of promise for the bulls. Even since the collapse from 6000 levels, and the first rise to 5300 levels, we have been following a downward parallel channel, toggling between the top and bottom limits of this channel. The last time the Nifty kissed the boundaries, it had formed a double top at 5160, from where it viciously slipped down to 3790, which was the lower boundary of the parallel channel.
It is from 3790 that it gets very interesting.
For one, we have a rise to 4530 and then a subsequent gapdown to 4190 yesterday. This appears to be either an W1 rise and an assumption that the W2 wave got over yesterday. Today's wave could be the start of a W3 and whether it actually is a W3 and not a C wave, would be proved tomorrow or in a few days.
If this is indeed a W3, we would be approaching 4880, a point at which the Nifty would crack its parallel down channel, and rise out of it, indicating a bullish scenario for the whole of August. If this is a C wave corrective, the we would find it difficult to proceed beyond 4530, and should return downward to kiss the lower boundary of the parallel channel, which could be around 3800 and lower levels. It is this case, that most analysts have been focusing on, and which has been doing the rounds on various forums and channels.
There is a reason to feel optimistic for at least until September 19. For one, crude prices have started to tame, and unless some unknown reason crops up, technically it looks like crude is heading downward for some months.
The Falling Wedge Pattern
However one pattern on the Nifty, has been playing itself out since the freefall from the tops. This is shown in the image above and is what has the bulls enthused. For the diehard bulls Nifty is heading to 4530-4860-5350.
Sensex : (14287.21) Today Sensex face resistance at 14477, if cross 14477 then goes up to 14667. Sensex find support at 14134, if 14134 break then goes down up to 13944-13800.
Nifty : (4313.55) Today Nifty face resistance at 4346-4379, if cross 4379 then goes up to 4450. Nifty find support at 4293, if 4293 break then goes down up to 4253-4208.
The last few days have been quite volatile in nature, reflecting a very high degree of uncertainty on part of traders and investors alike.
I have been going through the Nifty chart and have highlighted areas of resistances and, in addition, have drawn a few important levels on the chart, which could be useful for your trading. I have a very bearish bias on Nifty and any retracement close to 4490 should, in my opinion, is an excellent place to get short for long-term traders, the stop for this trade has to be above 4680 and the ultimate target would be at around 3650 (as shown on the bottom-most line on the chart).
Attached above is the daily chart of Nifty. The Nifty, as can be clearly seen, has reversed after testing the top of the trend channel. This was expected since the 4180-4200 support is quite a strong support. Yesterday we did see the Nifty go down to a level of 4160 intraday but it closed at 4190. If we have another day of upmove tomorrow and if the prices were to go above 4350, we would have a pivot low in place at 4160. A pivot low formed at 4160 would mean that the Nifty has finally formed a pattern of higher highs and higher lows, which would bring the Nifty back in an uptrend. Back in an uptrend means, we should be buyers now and our stop loss for all long positions should be the most recent pivot low at 4160. But before we go on to buy, we should be aware of the different definitions of an uptrend. Technically, a stock (or an index) comes back in an uptrend when it goes up, comes back down to form a low (which is higher than the previous low) and then goes back up above its previous high. Quite often the prices first go on to make a higher high (like the Nifty displayed this time around) and then form a higher low. Here there are two schools of thought. One says that the uptrend has started, whereas the other school waits for the prices to go back above its previous high (in which case it makes it two higher highs and a higher low) before buying. Needless to say, the second school of thought has a much better chance of making a profit. And it is also understood that it is the first school which buys at a cheaper price and makes more profits if the signal turns out to be correct for them.I would normally side with the first school rather than the second but it all depends on the situation. At present, if the Nifty were to go above 4350 tomorrow, there is resistance close by near 4480 (this level will keep reducing every passing day) as suggested by the trendline. What if the Nifty were to reverse from this level? I'll be making a profit of only 100 odd points, which is not much. Also, there is likelihood that the candlestick pattern formed here is that of 'three black crows', which gives a very negative outlook to the Nifty. Had the small narrow range blue candle, formed on Monday, not been there, this would have been a classic 'three black crows' pattern, which happens to be a reversal pattern. It is the presence of this blue candle that creates doubts. The 'three black crows' candlestick pattern usually follows a period of strong advance and within this pattern three black(in our case, red) candles/shaded candles are formed with non-existent or small lower shadows. These three candles have lower highs and lower lows. Usually, the fourth candle is a white/blue/unshaded candle but could also be a black/red candle. The fifth or the sixth candle, generally, takes the prices below the low of the 'third crow'. If this does turn out to be a 'three black crows' pattern (ignoring the blue candle formed inbetween the crows) and the low of 4160 is broken in the next one or two days, we could be looking at a retest/breakthrough of the 3800 lows too. For now, I would much rather stay with the second school of thought and buy only if the Nifty were to go above its previous high of 4540
The reaction to the dead cat bounce from 3761 -4537 can now be considered over and NF can be traded on the long side now. The market internals are strong and we will have a look at them over the weekendPoint to Watch: 4324
Support: 4227, 4254, 4176, 4168, 4101(05), 4089, 4049, 4031, 4017,4009, 3996, 3932, 3855, 3738
Resistance: 4318, 4324, 4340, 4395, 4400, 4460(68)
- moves 2-3 points above PTW & closes not only below it but also below Resistance 4318
The Indian market opened on gap-up on global cues and close near day's high. We had seen bounces from support levels 4164, as we had mention above 4300 we will test 4500 levels in comings day. For coming session nifty will faces resistances near 4380-4410 levels on the lower side 4260-4186 will act as support zone
HOT RNRL HEADING 115 /-
WE HAD GIVEN IN "WEEKLY UPDATE " JUST READY FOR FIRE ........ TGT CHECK ..Expiry day volatility today
After nifty started moving forming a base at 4160, it made a high of 4327 yesterday and moving towards 4400-4500 as told and today being expiry day, lots of volatility will be seen in the market.There might be a gap up opening today and higher level selling might come in this expiry day.On global scenario, Light, sweet crude for September delivery jumped $4.58 cents to settle at $126.77 a barrel on the New York Mercantile Exchange, after earlier rising as high as $127.39. It was crude's biggest one-day rally since July 10, when prices ended $5.60 higher. Oil closed $2.54 lower on Tuesday at $122.19 a barrel.
The Dow Jones industrials rose more than 180 points, bringing its two-day gain to more than 450 after a rebound in financial stocks and optimism about private sector jobs.The Dow rose 186.13 to 11,583.69.The dollar was higher against other major currencies, while gold prices fell.For today, nifty above 4325 wil go towards first resistance at 4355 and then at 4400 and if nifty is below 4325, supports are at 4265 and 4240.Positive closing expected today.
Stock watch for the day:
Axis Bank (679): Buy this stock in dips with stop loss 662 for target 690-700
IPO UPDATE NU-TECH
Sustaining growth a challenge – Avoid it
Nu Tek India has entered the capital markets with an offer of 44 Lac shares at a price band of Rs. 179-192. Investment Guru is of the view that Investors should avoid the IPO on account of following reasons:
- Nu tek is operating in a very competitive segment and has limitation of scale of operations.
- In view of above, it would not be possible for the company to sustain its growth rate of over 47%. The growing trend of Infrastructure sharing by telecom companies would also act as a restraint.
- The issue is priced at a PE of 15.6 which looks aggressive considering the current market scenario. Since the issue is small it may sail through, but it may not provide listing gains to the investors unless there is change of sentiment at the time of listing. The listing trend of recent IPO's is sufficient to deter investors from applying blindly to the IPO's. See my post on Initial profit-less option
- The business model is skewed towards limited customers.
- Large players have significant advantage in securing large scale orders and hence Nu tek faces serious challenge with regards to competitors like GTL who enjoy better presence and have better financial and technical competencies.
Issue Closes : 01-Aug-2008
Registrar : Aarthi consultants
Related Information
About the company
Company Fact Sheet
Company's Strength
Check IPO Allotment Status of NuTek
Nifty :: Once again an insider bar with positive bias.. As we say on 29th post mid term momentum up and after sharpe decline we see today strong up move.. Once again Oil turn up from our support level $121 , 2nd time. Nothing too worry for this up move may be its corrective move only..Nifty facing strong resistance zone above 4400.. Watch 4418/4470.. This two resistance works as strong resistance.. Avoid buying in between this two resistance .. Give long commitment only above 4470.. Till then our strategy for 31st Jul. Buy on dip (S.L 4220) sell at high (S.L 4470)..In one level above 4321 momentum up, below 4321 momentum down… Resistance for up move at 4321/4352/4365/4418/4470.. Supports 4285/4220/4186/4134
The markets went up following the global cues and sustained it gains at higher levels on back of short covering.
Today being the f/o expiry , the markets looks volatile to its best.
Technically the markets are still weak and in an undecisive mood.
Structurally the markets are in a whipsaw mode , which indicates a two sided movement in every alternate session , one day up and other day down and in the process will trap both bulls and bears.
Astrologically I have already alerted about the movement of Saturn into Jupiter with intermingling mercury, which indicates that crude can come to 100 $ , and will spark a bull run in metals.
The supports for the nifty is at 4205 levels and resistance at 4415 levels
The supports for the sensex is at 14015 levels and resistance at 14400 levels
Stocks to watch
Selmcl
Thomas cook
India bulls
Another gap up move and continues to 14300 . In the last few weeks we have seen lot of gap ups and gap downs which are made and later filled up.
Sensex has gaps left at 14484-14608 while one of the gaps was filled today . The above gap is a level to watch. As we have seen in yesterdays post till Sensex sustains 13500 and doesnt break 15100 we can expect markets to stay in the narrow range and swing to different cues. Till we dont see a move out of this range traders will need to be cautious and dont go leveraged as it would be a small range in which markets could swing and would be better to take stock specific view then index view .
Stocks to watchout for :
Sugar stocks Sakthi , Simbhaoli ran up as expected and still look good for more . of the breakout stocks KRBL moved up above 145 and got locked in upper freeze at 152 !.
ACC is firming up on charts for a bounce . Buy above 600-604 for a tgt of 630-650 .
LUPIN is the only chart which is making bullish oves and a close above 760 is the level to watch in next few weeks and if does so the pattern suggests a 150-200 rs upmove.
Extreme short term picks for 2-5 sessions :
Indiabulls, MTNL could see another 5-10 % in near term . Nagarjuna Fert above 39.6 could tgt 45
Kolte Patil , KRBL are ideal picks for high risk day traders for intra freeze .
Some views :
We have seen CRR rates being hiked , inflation continues to sustain 11-12 % zone , Earnings projections are being downgraded etc etc and lot of data which continues to show a slowdown which was evident from the time of 17k on charts where in we were cautious/exit/book etc and the economical data seems a little late.
So what next from here , technically the expectation is the correction and bottoming out phase could continue till Sept or lil later and worst case Jan ( 8-13 mths theory ) . So accordingly the economic data could continue to worsen till Sept or lil later but markets generally tend to discount the things before economic data does !!! .
Although index will continue to remain under pressure or range bound there are loads of stocks , sectors which are still strong and some fallen much below fair values and seems attractive. Many of the stocks are available at an index level of 8000 ! or roundabouts and the ratios like p/e, eps , book value loook attractive in many of them . So investors need to do much more research as suddenly options have increased , coz many may seem attractive .
Bottomline is Stock markets are not about SENSEX or NIFTY but about the thousands of companies listed on NSE ,BSE and there are lots of opportunities available and as indices are in the process of bottoming out and lots of stocks may have already bottomed out while some others may still knock 52 week highs . Be focussed do appropriate homework and be disciplined and this market would reward !! Men are now being separated from boys/babies :) ....
Market may open up with hugh gap. Market may up between 10.30 and 10.50. Market may steady or up side between 12.20 and 12.47. Market may close at up to previous closing.
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Opening Bell Call
Buy
RELIANCE - Reliance Industries Ltd
RELCAPITAL - Reliance Capital Limited
NDTV - New Delhi Television Limited
IDEA - Idea Cellular Limited
RNRL - Reliance Natural Resources Limited
IFCI - IFCI Limited
RPOWER - Reliance Power Limited
SBIN - State Bank of India
On 30th July 2008 - The BSE Sensex closed at 14287 (Up 495 points) while the NSE Nifty closed at 4,314 (Up 123 points).
Opening Bell Call
Sell
HDFCBANK - HDFC Bank Ltd
PARSVNATH - Parsvnath Developers Limited
NAGARCONST - Nagarjuna Construction Co. Ltd
APTECHT - Aptech Limited
DCB - Development Credit Bank Limited
BANKINDIA - Bank of India
Technical Analysis for 31st July 2008
BSE-SENSEX - Major Support - 14203, 14144, 14085, 13984, 13883, 13723, 13563
BSE-SENSEX - Major Resistance - 14304, 14405, 14464, 14523, 14683, 14843, 15003
NSE-NIFTY - Major Support - 4277, 4252, 4227, 4184, 4141, 4073, 4005, 3937
NSE-NIFTY - Major Resistance - 4320, 4363, 4388, 4413, 4481, 4549, 4617, 4685
Stocks
The S&P Financial index is undergoing a typical V-shaped bear market rally, coinciding with a mid-July sharp spike in volume. Twiggs Money Flow, however, signals continued selling pressure and the rally is likely to fail.
The Dow is expected to encounter strong resistance in a band between 11750 and 12000. Respect of resistance would warn of another test of 11000; while breakout above 12000, though unlikely, would indicate a test of 13000.
Crude Oil
West Texas Intermediate Crude respected support at $120/barrel. Reversal below $126 would indicate another retracement to test the support level. Recovery above $128 is less likely — and would signal a sharp rally.
The Fear Index
The spread between the fed funds rate and 3-month T-bills has subsided, signaling an easing of tensions after passing of the housing/GSE rescue package.
| Read More.... | ||
 |  |  |
| Treasury Yields Rise | Commercial Paper Yields | Home Mortgage Rates Spike Up |
 |  |  |
| Corporate Bond Yields Rise | Bank Credit Growth Falls | Consumer Sentiment Ticks Up |
WITH REGARDS,
ASHRAF VAHORA.
Mob:-9904167626
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