updated

morning thoughts..

As indicated yesterday that a sustained fall below 12900 will bring the lows of 12514 in threat.
The markets reacted as expected and assaulted the lows of 12514 and made a new low.
As said the figure of 11900 looks valid and the markets are likely to make a new bottom again.
However the bailout fallout has been morolessly discounted by asian peers yesterday by seeing the dow futures , so the erosion in respect to dow jones looks small today.
However technically the markets are weak and will drift towards 12300- 12100 and will try to find strong and crucial supports at 11900.
Astrologically mercury has turn retro after long time and is regarded as the ruler of the mind –and one needs to be very cautious and alert , as it will make one commit big blunders , resulting in huge losses
We have already alerted yesterday via sms about the same .
However for dow jones this fall is just the beginning , we have already said 10 days ago about dow jones levels , it looks ok for 5000
Similarly cac , dax , futse , all are headed to 3300-3000
But now the point to look is not for trading but for investing and the screen is providing whole lot of oppurtunites – you only need to identify them.
Remember one thing –“ DISASTER FOR SOME ONE IS OPPURUNITY FOR ANOTHER “
So do I find huge opportunities in the current scenario..
History is repeating itself,..If People remember in 2001 CRISIS JP ASSO WAS 11 RS , WENT 2500 IN 2008 , MCDOWEL 15 , WENT 2100, ROLTA WAS 8 WENT 900
Anyways the supports for the nifty is at 3700 levels and resistance at 3900 levels
The supports or the sensex is at 12010 levels and resistance at 12900 levels


Stocks to watch

Icici bank looks weak and looks ok for 380 odd levels in days to come

Hdil looks weak for 80 odd levels in days to come

Jp looks weak for 90 odd levels in days to come

And many more sectors and stocks are waiting for a milestone crash…?


We are writing from past 1 month…still until seen , not believed.

Anyhow ,

The worst is yet to come or over ,a big big move coming in october,nifty 3000 or 4800,sensex 9500 or 16000

We have maintained 3600 as an important support and a target for NSE index.
3600 was also an important buy level.

BUT if 3600 is breached in a rapid manner 2600 is the next logical
support and target NSE index would face.

The chance that 3600 may break today or in coming days is increasing,
thus investors should wait a little while more before deploying their
funds for purchases,
even though a lot of companies have become very attractively (mouth
water-ingly) valued even at current prices.

India: Are You Ready For The Wall Street Type Meltdown?

Thanks to some partisan voting, the House Of Representatives rejected the Financial Bail-Out Bill called "the Paulsen Plan" last night. The Dow sank 777 points, with unexecuted orders continuing to be matched in post market hours for atleast 20 minutes. The last minute fall worked out to 100 points on the Dow.

Financial circles in Bombay are already in panic. CNBC-TV18 reports that call money rates have shot up to 15 per cent, one month deposit rates to 13 per cent and one year deposit rates to more sanguine 11-12 per cent. The biggest part of the fear factor is that no one knows the State in which Private Commercial Banks, Private Insurers and NBFCs are.

Are these the aggressive Buyers for deposits and calls in the market? For the fear about PSU banks is limited, because most investors consider them as pseudo extensions of the GOI and so as good as Treasury..but not the private sector counterparties.

The crisis in the US Banking system has been brought about by a lack of counter-parties which can be trusted by the Banks. Hence, the wheels of credit have been stuck for months. And counterparties are suspect because no one knows how much toxic paper they carry on their books.

After all Government across the Atlantic and in US have been trying to engineer shot-gun weddings or as they call a marriage a day events to bail-out banks. One simply cannot say which Bank caves over today and who follows tommorrow.

Jim Cramer, former Hedge Fund manager and now CNBC Mad Money host gave a simple suggestion-let FDIC announce that deposits upto $ 1 mn (Rs 4.7 crore) will be insured against the present limit of $ 100,000 (Rs 47 lakh).

This will allow depositors to refrain from panic, and not causing a run on the Banks across the nation. The Insurance premium for these Deposits will be paid by the Banks which may not exceed 10 bps on the principal amount. This move will bring some sanity to the Banking system.

Now look at India. DICGC insures deposit upto Rs 100,000. In the past 50 years DICGC funds have never been called upon, so its finances should be ship-shape. Accordingly, the GOI should announce an immediate increase in the amount of Insured Deposits to atleast Rs 1 crore.

This will bring immeasurable confidence to the private banking system in the country. The last thing the GOI wants is Depositors running amuck across the Banking space.

If we continue to sleep, we will have repercussions similar to the US Banking system and that reads as follows:

This doesn't happen every day, and losses are also possible. But as this panic spreads — and as the speed of events accelerates — we're seeing these kinds of situations pop up more and more frequently. The reason ...

The Credit Crunch Is Now Reaching an Explosive Phase

More so than at any other time in our history ... and perhaps more so than in nearly every other country on the planet ... ours is a debt-addicted society.

As soon as the debt dosage is reduced, our economy suffers withdrawal pains. And if it's cut off cold turkey, the affected industries go into convulsions — precisely the drama that's unfolding before our eyes:

Credit markets are choking. Sales are collapsing. Companies are folding. Jobs are vanishing. Not next month or next year. Right now.

Just look at how Washington has panicked! In less time than it takes to appoint a dog catcher, Congress has decided to pass the most radical, most grandiose and most expensive financial rescue package of all time.

This unprecedented rush to judgment wasn't just to help members of Congress run back to their election campaigns; it was driven by the utter force of the credit market convulsions.

Specifically ...

Companies are getting cut off. Large corporations regularly issue commercial paper — short-term IOUs — to raise the cash they need to finance their day-to-day purchases, meet payroll, even pay the electric bill.

Before the crunch, in the three years through 2006, they raised an average of $223 billion per year in new money with these IOUs and similar kinds of paper, according to the Fed's latest quarterly estimates.

But now, their access to that instant cash has virtually vanished: In the 12 months ending June 30, not only were they unable to get any new money from this source, but they actually had to pay back $361 billion more than they could raise.

In this kind of credit implosion, virtually unheard of in modern times, the only choice for many companies is to promptly lay off workers, shut down operations or make a beeline to the bankruptcy courts.

Home equity loans are virtually extinct. Not long ago, consumers could go to almost any bank, borrow on their home equity and walk off with a wad of cash to spend. In 2005, for example, they took out $1 trillion in home equity loans.

But now, that giant ATM machine has been virtually unplugged: In the second quarter of this year, the pace of new home equity lending plunged to an annual rate of only $80.8 billion, down by a whopping 92% from its 2005 level. And this credit shutdown is a disaster for all companies that do business with consumers directly ... or indirectly.

Local governments are getting shut out. State and municipal governments typically have easy access to credit because of their tax-exempt status. No more! Now they're being forced to pay more or are dropping out, sending shock waves of local budget cutting across the country.

Detroit is getting slaughtered. In the first three weeks of September, car sales plunged 34% compared to the already-depressed level of one year ago. Why? Again, because of the acute and chronic shortage of credit: No auto loans = no sales.

These convulsions from the debt-addiction withdrawal are hitting small businesses, schools, churches and charitable organizations.

They're sweeping through urban communities, suburbs and farms.

They're slamming everything from Hugh Hefner's Playboy to London's 2012 Olympic Village.

No wonder Washington is spooked! No wonder the president himself is warning about financial panic!

Technical Analysis - Stocks

Derivative stocks below 'Jul lows Even while I search for a possible temporary support near 13K on Sensex, Realty / Metals / IT / Pharma Indices have broken their respective equivalent 'Jul lows. Typical of a bear phase, here are some stocks where structure look totally damaged :

1. WWIL : Almost touching 11% level to its highs

2. Sobha Developers : Weekly gap-down, shown earlier, leads to further weakness

3. Rajesh Exports : 11% level marked at 18.60

4. Parvnath Developers : 11% level possible as long as it shows lower top lower bottom

5. Omaxe : "Mountain" pattern at the top leads to weakness

newsletter

Dow10,365.45-777.68

Nasdaq1,983.73-199.61

S&P 5001,106.42-106.85

10-year3.63%-0.20

Oil$96.37-$10.52

Gold

Sensex Technical View :
12500 gets into danger and this would imply that markets are well headed towards the 11500 -11900 zone. Few days back when we dipped to 12558 had posted the above chart where in i have depicted the support zones on lower side which creates good opportunities for investment gains in bear rallies. All through Jan to September now the support levels have been shown consistently and used to make good of the bear rallies !!!.

Now getting into exact levels which may be difficult as trendlines keep on sloping and have diff points but roughly the range of the trendline range comes to 11500-11200 for the entire duration of October. The long term fibonacci level comes to 11900 . So ideally the zone of 12500-11200/500 will be the oval which could provide excellent stock specific opportunities for investment.

With a good gap down action as per global cues investors can start buying yet again at 11900 or roundabouts and go staggered and can take upto 80 % of exposure till 11200-11500 with a medium term view but we may end up getting stock specific bounces sooner also.

Market Observations and Thoughts :
The most frequent question i have been asked today. Should i sell all ? Is it time to exit ? I have FDs with ICICI?ATM lines ? Can market go to 9k-10k? Dow gone,what tomorrow ? .

And for a matter of fact in the last few months i havent made an aggressive buying call in any stocks and been very conservative and critical on many stocks. But suddenly at 12500 or lower it makes it difficult for me to answer such questions.

When i was being critical of money management , reducing exposures, exitting positions/investments at 18900/17k/16k not many people asked me these questions but rather were asking me what to buy. !!! . Those who did were able to make good gains in the rallies from 12500 to 15500 in many stocks and are now in a position again to shop at 11500-11900 and remain invested with patience.

I may term this as the final capitulation signs coz lot many who were stuck at 20k-21k levels remained hopeful till 12500 !!! are suddenly feeling the pain although now lot many midcap/large cap stocks which form the major part of the investors portfolio are available at 6k-8k index. The index can be deceptive !!!.

One important line i make of it is ----- " The lay investor doesnt sell in LOSS but he sells only in PANIC or DESPAIR"

So i would expect lot many lay investors to be out of the market in this month finally and hoping for 9k index. There might be mutual fund redemptions but this creates an ideal scenario for a final capitulation and economic peak out.

Some days back i had discussed investors who can deploy cash should be ready to keep it and go with a fresh bent of mind now and dont look to average duds but buy fresh investments with fundamental reasons keeping in current point of view. Real Estate had a great reason to be bought 2 yrs back but not necessarily now.

HIGH RISK MONEY MANAGEMENT OPTION-
One of the risky thing to do Leverage trading which i have consistently avoided can be used now but i would suggest this for investors those who have followed our view at 17k/16k to exit and using the bear rallies to great use. Leverage positions if used effectively can generate better returns.

Investors can take positions in Futures contracts as lot many stocks have seen deep correction and with smaller lot sizes building a position is easier. Ideally one would need to put up around 30 -35 % margin so one can allocate around 50-60 % of the intended money to safeguard a margin pressure and if a good pick is made it may not drop more then 15-20 % from current panic levels. This will give a higher leverage option but good discipline would be to convert to delivery by selling dud portfolio stocks on rise or by putting up cash as personal investment increases. But do make it a point u dont go over board !! as this is only for medium term investors who are patient enough and have a decent portfolio size.

Stocks to watchout for :

For last so many months many readers have been asking me to present a list of stocks which can be bought for 1-2 years but have consistently refrained from doing so as the last signs of capitulation were yet to be seen and lot many stocks were for a short term gain. And my comfort level is finally increasing for long term NOW.

I would like to put it this way a list of stocks which i like that could give 30-70 % returns or higher but time-frame is a secondary constraint as its not necessary to hold for a year tgt but for a price tgt. Go with a gain point of view and accumulate the following stocks. These are some of my picks and not necessary to highly outperform too so investors please do your own research and good money management. Will be adding further stocks to the list , right now taking a diversified portfolio .

1) SBI -- Large cap PSU Banking
The stock remains a favorite but preferred buying price 1320/1250/1150 which are accumulation levels.

2) IDFC -- Finance
The stock continues to fall rapidly but remains a good pick but dont expect it to outperform much in short term but in the longer run could be a great bet. Preferred buying prices 68/60.

3) Canara Bank/Andhra Bank/Dena Bank/Allahabad small PSU banks.
The price to book values , dividend yield look interesting and are a comfort on downside and best time would be to buy tomorrow if these banks are available 8-10 % down from todays price. May not outperform significantly but give good stability to a portfolio.

4) Glenmark Pharma.--- Pharma Bet
The stock remains to be the best bet in pharma space although has not corrected much but can be bought at 480/430-400 with a stop of 390. The stop loss is mentioned only because of a technical bias as it has not corrected a lot.

5) IFCI --- Finance Value Bet
Yes one of my favorite stocks which i had recommended at 12-15 when not many were talking about it. Because of the highly speculative nature of the stock and liquidity concerns in the market the stock has come down heavily to 30 levels whereas at a point of time there were bidders ready to buy it at 100-110. Buy price 36/32/29 . Continue to hold the stock even if it goes down a bit in panics as recovery could also be faster.

6) Kalpana Inds /Sakthi Sugars/Renuka Sugars /Chamble fert . --- Small cap bets
Both the stocks have come down to very attractive levels with not much of a fundamental change. Investors can buy some at cmp or lower and on every 5-7 % decline with a medium term view. Excellent fundamentals and growth expected only current market conditions giving it a concern be patient.

7) RCOM/GTL infra. -Telecom space
Good bets in the telecom sector at 330 and 33 are definitely a buy on every decline with a slightly longer term view as the stock may take time to revive.

Another day, and fall, frankly markets doesnt have anything for bulls at all.nifty may open with a huge gap down around 3690 and may fall to 3636 fut for the day.

i know some of the bulls would have never dreamt about these levels, but yes, it can easily come now.

so now, is a bottom in place? who r we to decide?never fight the trend, and buying shud happen only once we see a reversal.

Alert Name: India, Bearish Alert Criteria: Stocks (Any Indian Exchange); Price at least 50.00 and below the 200-day moving average; Volume at least 10,000; Classic Patterns; Bearish; Pattern Duration at least 25 days; Possible Price Move of at least 10%.

Symbol Exchange Name Event Close at Event Target Price Range Opportunity Type ATLP BSE Atul Ltd Descending Continuation Triangle 54.35 31.00 - 35.00 Intermediate-Term Bearish BBJL NSE Bharat Bijlee Ltd Descending Continuation Triangle 1,100.00 711.00 - 783.00 Intermediate-Term Bearish BEML BSE B E M L Ltd Continuation Diamond (Bearish) 678.60 523.00557.00 - Intermediate-Term Bearish BOI BSE Bank of India Symmetrical Continuation Triangle (Bearish) 270.55 161.00 - 182.00 Intermediate-Term Bearish CNBK BSE Canara Bank Head and Shoulders Top 181.90 127.00 - 138.00 Intermediate-Term Bearish GEOE BSE Genus Power Infrastructures Ltd Top Triangle 170.25 1.00 - 39.00 Long-Term Bearish GEOE NSE Genus Power Infrastructures Ltd Top Triangle 167.50 1.00 - 35.00 Long-Term Bearish HCLT BSE HCL Technologies Ltd Descending Continuation Triangle 195.80 38.00 - 67.00 Long-Term Bearish HRMA NSE Harrisons Malayalam Ltd Symmetrical Continuation Triangle (Bearish) 85.20 36.00 - 45.00 Intermediate-Term Bearish ILFS BSE IL&FS Investment Managers Ltd Descending Continuation Triangle 115.70 71.00 - 80.00 Intermediate-Term Bearish INBA BSE Indian Bank Ltd Continuation Wedge (Bearish) 119.40 55.00 - 67.00 Intermediate-Term Bearish INBA NSE Indian Bank Ltd Symmetrical Continuation Triangle (Bearish) 120.00 44.00 - 58.00 Intermediate-Term Bearish IVR BSE IVR Prime Urban Developers Ltd Descending Continuation Triangle 104.50 1.00 - 24.00 Long-Term Bearish JHFL BSE Jhaveri Flexo India Ltd Symmetrical Continuation Triangle (Bearish) 55.00 29.00 - 34.00 Intermediate-Term Bearish KBNK BSE Karnataka Bank Ltd Descending Continuation Triangle 120.35 80.00 - 88.00 Intermediate-Term Bearish NATP BSE Natco Pharma Ltd Symmetrical Continuation Triangle (Bearish) 64.95 38.00 - 43.00 Intermediate-Term Bearish NITT BSE Niit Technologies Ltd Descending Continuation Triangle 87.80 19.00 - 32.00 Long-Term Bearish ORBC BSE Oriental Bank Of Commerce Symmetrical Continuation Triangle (Bearish) 146.70 112.00 - 120.00 Intermediate-Term Bearish RCSY BSE Ruchi Soya Industries Ltd Descending Continuation Triangle 69.25 30.00 - 37.00 Long-Term Bearish SBI NSE State Bank Of India Symmetrical Continuation Triangle (Bearish) 1,422.00 856.00961.00 - Intermediate-Term Bearish SBIf BSE State Bank Of India Continuation Wedge (Bearish) 1,385.75 757.00 - 883.00 Intermediate-Term Bearish SKFB NSE SKF India Ltd Descending Continuation Triangle 202.00 162.00 - 170.00 Intermediate-Term Bearish THOM NSE Thomas Cook India Ltd Continuation Diamond (Bearish) 70.70 28.00 - 36.00 Long-Term Bearish TITN BSE Titan Industries Ltd Symmetrical Continuation Triangle (Bearish) 1,081.15 742.00 - 806.00 Intermediate-Term Bearish UNBK NSE Union Bank Of India Continuation Wedge (Bearish) 139.80 70.00 - 83.00 Intermediate-Term Bearish VYSA NSE ING Vysya Bank Ltd Descending Continuation Triangle 196.00 130.00144.00 - Intermediate-Term Bearish WCKH BSE Wockhardt Ltd Descending Continuation Triangle 157.30 110.00 - 120.00 Intermediate-Term Bearish WCKH NSE Wockhardt Ltd Descending Continuation Triangle 157.80 110.00 - 120.00 Intermediate-Term Bearish XLTL NSE XL Telecom & Energy Ltd Top Triangle 137.25 1.00 - 17.00 Long-Term Bearish

Alert Criteria: Stocks (Any Indian Exchange); Price at least 5.00; Classic Patterns; Bearish; Daily Events; Pattern Duration at least 25 days.

Following are the first 50 matching Technical Event® opportunities out of 159. Please consider refining your alert criteria.

Symbol Exchange Name Event Close at Event Target Price Range Opportunity Type ALID BSE Allied Computers International Asia Ltd Descending Continuation Triangle 17.50 6.00 - 8.00 Intermediate-Term Bearish AREM BSE Amar Remedies Ltd Continuation Diamond (Bearish) 20.75 9.00 - 11.00 Long-Term Bearish AREM BSE Amar Remedies Ltd Downside Breakout 20.75 10.25 - 12.25 Long-Term Bearish AREM NSE Amar Remedies Ltd Downside Breakout 20.50 9.00 - 11.00 Long-Term Bearish BEML BSE B E M L Ltd Continuation Diamond (Bearish) 678.60 523.00557.00 - Intermediate-Term Bearish BOI BSE Bank of India Symmetrical Continuation Triangle (Bearish) 270.55 161.00 - 182.00 Intermediate-Term Bearish BSTS BSE Bharat Seats Ltd Descending Continuation Triangle 9.00 0.25 - 2.00 Long-Term Bearish CEIT BSE Cerebra Integrated Technologies Ltd Top Triangle 20.05 1.00 - 5.00 Intermediate-Term Bearish CELA NSE Celestial Labs Ltd Descending Continuation Triangle 28.35 1.00 - 7.00 Long-Term Bearish CHPL NSE Chemplast Sanmar Ltd Descending Continuation Triangle 5.55 3.10 - 3.60 Intermediate-Term Bearish CNBK BSE Canara Bank Head and Shoulders Top 181.90 127.00 - 138.00 Intermediate-Term Bearish CORF NSE Coromandel Fertilizers Ltd Megaphone Top 147.00 110.00119.00 - Intermediate-Term Bearish DATC NSE Datamatics Technologies Ltd Downside Breakout 21.15 3.00 - 7.00 Long-Term Bearish FAME BSE Fame India Ltd Top Triangle 25.20 1.00 - 6.00 Long-Term Bearish FOUR BSE Four Soft Ltd Descending Continuation Triangle 18.85 1.00 - 5.00 Long-Term Bearish FOUR NSE Four Soft Ltd Descending Continuation Triangle 19.10 1.00 - 5.00 Long-Term Bearish GEOE NSE Genus Power Infrastructures Ltd Top Triangle 167.50 1.00 - 35.00 Long-Term Bearish GLDY BSE Glodyne Technoserve Ltd Megaphone Top 534.45 365.00397.00 - Intermediate-Term Bearish HANI BSE Hanil Era Textile Ltd Descending Continuation Triangle 6.06 2.10 - 2.90 Intermediate-Term Bearish HCLT BSE HCL Technologies Ltd Descending Continuation Triangle 195.80 38.00 - 67.00 Long-Term Bearish HRMA NSE Harrisons Malayalam Ltd Symmetrical Continuation Triangle (Bearish) 85.20 36.00 - 45.00 Intermediate-Term Bearish IMCL BSE Indraprastha Medical Corp Ltd Downside Breakout 22.85 11.00 - 14.00 Long-Term Bearish INBA BSE Indian Bank Ltd Continuation Wedge (Bearish) 119.40 55.00 - 67.00 Intermediate-Term Bearish INBA NSE Indian Bank Ltd Symmetrical Continuation Triangle (Bearish) 120.00 44.00 - 58.00 Intermediate-Term Bearish ISLB NSE Ind Swift Laboratories Ltd Continuation Diamond (Bearish) 37.40 22.00 - 25.00 Intermediate-Term Bearish JRGI BSE JRG Securities Ltd Continuation Diamond (Bearish) 31.60 18.00 - 21.00 Intermediate-Term Bearish JUMB BSE Jumbo Bag Ltd Head and Shoulders Top 32.65 20.00 - 24.00 Intermediate-Term Bearish KBNK BSE Karnataka Bank Ltd Descending Continuation Triangle 120.35 80.00 - 88.00 Intermediate-Term Bearish KTSG NSE Kothari Sugars & Chemicals Ltd Downside Breakout 9.00 2.50 - 3.50 Long-Term Bearish MDFT NSE Madras Fertilizers Ltd Descending Continuation Triangle 10.10 4.80 - 5.80 Intermediate-Term Bearish NATP BSE Natco Pharma Ltd Symmetrical Continuation Triangle (Bearish) 64.95 38.00 - 43.00 Intermediate-Term Bearish NITT BSE Niit Technologies Ltd Descending Continuation Triangle 87.80 19.00 - 32.00 Long-Term Bearish NOID NSE Noida Toll Bridge Company Ltd Descending Continuation Triangle 32.05 14.00 - 17.00 Intermediate-Term Bearish ORBC BSE Oriental Bank Of Commerce Symmetrical Continuation Triangle (Bearish) 146.70 112.00 - 120.00 Intermediate-Term Bearish RCSY BSE Ruchi Soya Industries Ltd Descending Continuation Triangle 69.25 30.00 - 37.00 Long-Term Bearish RNSG BSE Rana Sugars Ltd Downside Breakout 11.40 4.75 - 6.00 Long-Term Bearish RSTC BSE Rashtriya Chemicals & Fertilisers Ltd Descending Continuation Triangle 43.85 13.00 - 18.00 Intermediate-Term Bearish SBI NSE State Bank Of India Symmetrical Continuation Triangle (Bearish) 1,422.00 856.00961.00 - Intermediate-Term Bearish SBIf BSE State Bank Of India Continuation Wedge (Bearish) 1,385.75 757.00 - 883.00 Intermediate-Term Bearish SKFB NSE SKF India Ltd Descending Continuation Triangle 202.00 162.00170.00 - Intermediate-Term Bearish STLG NSE STL Global Ltd Descending Continuation Triangle 10.65 1.00 - 3.00 Long-Term Bearish SUPT BSE Super Tannery Ltd Top Triangle 10.50 5.60 - 6.60 Intermediate-Term Bearish TFCI NSE Tourism Finance Corporation of India Symmetrical Continuation Triangle (Bearish) 16.15 8.75 - 10.25 Intermediate-Term Bearish THOM NSE Thomas Cook India Ltd Continuation Diamond (Bearish) 70.70 28.00 - 36.00 Long-Term Bearish UNBK NSE Union Bank Of India Continuation Wedge (Bearish) 139.80 70.00 - 83.00 Intermediate-Term Bearish USBL BSE Usha Martin Ltd Descending Continuation Triangle 49.50 4.00 - 13.00 Long-Term Bearish VYSA NSE ING Vysya Bank Ltd Descending Continuation Triangle 196.00 130.00144.00 - Intermediate-Term Bearish WCKH NSE Wockhardt Ltd Descending Continuation Triangle 157.80 110.00120.00 - Intermediate-Term Bearish XLTL NSE XL Telecom & Energy Ltd Top Triangle 137.25 1.00 - 17.00 Long-Term Bearish ZENL BSE Zenotech Laboratories Ltd Top Triangle 116.70 78.00 - 85.00 Intermediate-Term Bearish

dont try to find the bottom.for rest, be in the chat room

Bulls are in control. Buy nifty only above 3885 or in panic selling.

Nifty :: Today Nifty give once again lower top lower bottom conformation.. (As per our Dow chart today night trade Dow also made lower top lower bottom).. But in such kind of extremely bearish scenario in over sold condition given buying opportunity at bottom for mid to long term investor.. Watch two strong support zone at lower side to catch an hard hitter stock for investment purpose only in small quantity.. First supports zone 3700 to 3646 And second one in between 3554 to 3502.. Resistance for up move at 3884/3970/4000/4042.. Supports 3800/3774/3697/3646/3554/35

After a long time I am finally getting an opportunity to put up some charts and detailed analysis. Its some busy and crazy times for me what with the hurricane and internet being down...Well things are kinda back to normal now and I am back in business.

I got a lot of emails from readers of this blog asking why no charts..Well reason is above as I did post several times over here...Thank you all for your wishes and concerns at this time...!

Now to the markets.

If you remember my fractal post, I had clearly said we will get something like this coming...I did turn short term bullish in between which turned out to be a dud as it did not bounce as much as I expected and I would have been better off just holding shorts...Unfortunately market has been very volatile and whipsaw-y nowadays that its been tough to time short term trades...My thought is avoid trying to catch the knife either way...Wait for bounces to short seems to be the wiser thing to do...Unless you want to take a sizable drawdown.

Okay lets look at the hourly chart here. Some things I have pointed out on the chart. You can also compare with the earlier move we had similar to this(see fractal post) and it should give some ideas on how this can go now...

Next the daily. I have market the possible move happening here over the next couple of weeks. I expect a very very important bottom to be set here in October itself maybe...Maybe around 3200-2900 range. We should then embark on a major multimonth rally...But these are based on waves so we will revisit this in another post in a few days. Also note in this chart, note the macd and stochastics clearly showing the downtrending nature of this move.

If I were to guess, I would say the market continues the decline, makes a low around 3600 and then moves upward to test the 3800 line again setting up a perfect short before we go down to much lower targets as shown in chart below.

Next the daily log chart...

Note how clearly we are within the doomsday channel as I had dubbed this before...We should move toward the bottom of the channel soon...

Finally the weekly. Nothing much to say except both macd and stoch on weekly also on sell...Watch for the stochastics turn back up on weekly to signify a longer term bottom. This is what I will be watching for.

I am really amazed at how well my fractal post worked from a couple of weeks back! Enjoy :)

US markets today...Man thats a crash...Biggest decline in a day that I have ever seen....Biggest since 1987....

Everyone ready for a 20% down day today? :-)

Its very likely unless some massive governtment intervention comes in. I think my longer term targets will get achieved very soon.

Dont miss the charts and TA below. When I did below analysis today early morning, I had no idea US markets would crash today...Man what a move! Almost like our own markets :)

PLS do not be in a hurry to bottom pick/knife catch. There will be lots of time. We are in panic mode now...Let the market find its bottom.

***Technicals
Nifty is in terminal phase of downtrend.
Downside supports are at 3800,3750,3600.
Resistance will be at 3930,3990,4056.
***Derivatives (September 29)
-Nifty (October) future premium decreased to 9 points and around 14 lakh shares were added in open interest with decrease in the cost of carry, indicating new short position at higher levels.
-Nifty call option add 43 lakh shares in open interest, whereas put option add 7 lakh shares in open interest. Thus open interest put-call ratio decreased to 0.90.
-Implied volatility has increased by 500-600 points which indicates high volatility in the coming days.
***Fund flow (September 26)
~FIIs net in Index fut. – 158 cr
~FIIs net in Stock Fut. + 34 cr
~FIIs in Cash Market - 604 cr
~Mut Funds in Cash Market - 67 cr
***total fund flow – 795 cr today & nifty was down by 125 points.
*** So far net fund flow of – 795 cr in October series. (Nifty is also down in October series).
***Past fund flow
-8071 cr in June series (-520), closed at 4315.
+6474 cr in July series (+18), closed at 4333.
-6641 cr in August series (-119), closed at 4214.
-6903 cr in September series (-104), closed at 4110.

The Nifty on Friday closed at 3985 after giving bearish signals (breaking of the 4000 support). The next support was there at 3800, 185 points away from the previous close. On Sunday night, I chose to upload a webinar for my readers rather than do any analysis on the Nifty, mainly because I had been talking of a target of 3800 since a number of days and secondly, I didn’t feel Nifty could lose 185 points in one single day. And yet, it did. After losing 208 points intraday (from Friday’s close), the Nifty bounced back a little to close at 3850 with a loss of 135 points. The markets were expected to be better after the Federal Reserve’s bailout bill, which plans to induct $700 billion into the global financial system, went to the Congress for voting. But after reports that Wachovia and three other European banks were banking on the Fed rescue, the markets slumped fearing that the $700 billion bailout package may not be enough to ride over the current financial crisis.

Today, the Nifty made a low of 3777, breaking the previous 52 week low of 3790.20 made on 16th July 2008. After making a low at 3777, the Nifty immediately made a recovery, and a good one at that, to end the day at 3850. Today’s closing price became the second lowest close in the last 52 weeks, the lowest being 3816, again on 16th July 2008. Making a new 52 week low is negative for the markets, and even though the market recovered to close above 3800 today, it seems quite possible that 3800 may be broken on the downside.

Seen above is the monthly chart of the Nifty. The chart shows the Fibonacci retracement levels of the rise from the much remembered low of 920 in April 2003 to the much much remembered high of 6357 made in January this year. The 38.2% retracement level support was at 4300 which was broken through, a few months ago. Since 3800 now seems to be under danger, it is important to know what the next support levels are. What provides support now is the 50% retracement level which is at 3640. Just below the 50% retracement level, is a black trendline which may act as another support if the 50% retracement level is breached. This trendline connects a few closes, a few opens and a low in the candles formed in the last couple of years. This trendline stands at 3558 and below this there is the 61.8% Fibonacci retracement level at 3000, which provides support and then the final support comes at 2600.

Of course, supports are just supports and are important only to identify where the market may stop its downmove. But the markets have a mind of their own and can decide to stop the downmove anywhere, no matter whether a support is there or not. Knowing a support level in advance helps us a bit because if the markets do decide to find support near a support level identified by us, we are better prepared to convert our ideas into an actionable long trade. I have mentioned above that it does not seem likely that the 3800 support will hold. Though, the markets suggest otherwise, I would be happy, and I’m sure a lot of other people will be happy too, if the markets prove us wrong this time and keep respecting the 3800 support.

so indeed its the C-3-(3) running and going down furiously, supports on downward sloping trend channel on my charts is near 11000 on sensex and below 3500 on nifty. 1000 dma is also near 3500 on charts. lets see if this this gives some support to nifty. of course, this could be intermediate lvls if bear mkt has to last for longer period of time

2158 hrs: hey guys and gals -- Oil down to 99$ - does anyone here cares?

What a times we are going through - this will remain in our memory for a long times to come. There are no technicals. There is no reasoning - just as (I must add) there was no logic when we were touching one high after the another and all were talking about touching 23,000! The fact is that the additional conditions that have been politically imposed on the Bailout package have not been taken well. There is a limit actually to demands personally speaking - first you mess up with billions of dollars (if not Trillions) - then expect the govt to bail you out - and that to by giving a free hands. Mind you - I am sure that if it had been given without any conditions attatched - still the chances of this market fall were as much as we are seeing now.

Anyway the fact remains that Nikkei dropped 1.26%, Hang Seng 4.29% and Strait Times 2.08%. (I am sure that even though I have not written red in capital letter - it is understood). Europe down in dumps - FTSE about to close and trailing at 4.03% down, Dax down 3.55% and Cac down 3.74%. There is no tick that is even taking a chance of showing green. Dow was all magic. It was kissing 300 points lower and seeing the condition - there seems to be no let down on the red pressure and the markets as of now are just not looking up at all. Want to look at the figures to make your legs weaker - well here we go - take support of your wife/husban/girlfriend. Dow is down 2.53% red and Nasdaq down 3.82% and S&P 3.5% down in red. Mind you the mid session is yet to start and anything can happen as the Bailout vote is yet to be casted. After yo have seen what could have influenced us during the opening / closing and opening tomorrow - let us see our figures. BSE down 506 points or 3.87%, Nifty down 135 points that is 3.39% down. The markets went down - down and down with a very feeble attempt of recovery. May be the shorts being covered and not taken to the next trading day. Noticed Nifty any chance? It broke the 52 week bottom before recovering. The lowest trading today was at 3777.3 and 52 week low was at 3790.2. Are we now trying to go lower than the half of our highest of last 52 Week? Also did you notice that Nifty has breached three supports as given out yesterday by me. Okay the fresh Nifty levels projections are againg given in the end.

Okay - I will talk candles now. the pattern is the one that neither me nor anyone else would normally like to see other than when you are sitting on tons of shorts. It is the "Three Crow Pattern" - infact so much so that it seems perfect out of the copy text book. This alone is strong indicator enough that bad times are upon us. today again we have breached the lower end of the Bollinger bands and the candles are firmly hugging the lower line - needless to say but the bands are continuing to expand giving wide berth to more downside. The volumes on nifty were higher. MACD negative divergence is increasing. Red line at this rate does not have a chance to beat Blue line. Mass Index showed signs to easing out yesterday but today it has again swung up and is going to the danger zone. TRIX is purely negative - looking down. RSI is bearish and Slow Stochastic red line is way below the blue line. So here we are - as per my sense - there is not even a single indication that gives us hope. All the same I am sure that the markets reaction to selective news can be phenomenal. Now all we have to do is just to wait for some good news to fall from the heavens in our laps.

The Nifty Pivot points calculations are as under:-

R3 4217.8
R2 4095.2
R1 3972.6
Pivot 3874.95
S1 3752.35
S2 3654.7
S3 3532.1

Tomorrow's projections
Projected High Range 3923.78 - 4033.9
Projected low Range 3851.08
Fib Projected high 4057.46
Fib Projected low 3717.39

Date 30/09/2008 Tuesday

DATE INDICATOR GREEN- BULLISH RED - BEARISH YELLOW- WAIT & WATCH

Today's Most Important---------as below

IF NIFTY SPOT DO NOT CROSS 4284 AND 4379 THEN.....

Ready for a big correction......up to 3621.

Warning: --Our ultimate target is BSE SENSEX----- 9071 , so please also keep this target in your mind.

NO NEWS LETTER ONLY WATCH BLOODBATH UP TO NIFTY 3219.

Happy & Safe Trading

Daily Target:-

1) Sell NF Below @ 3828 Target 3757-3641 to 3404.

2) Sell BOB Below @ 286 Target 281-273 to 258.

3) Sell BHEL Below @ 1477 Target 1440-1361 to 1208.

4) Sell GRASIM Below @ 1727 Target 1692-1646 to 1547.

5) Sell HCL-TECH Below @ 194 Target 185-175 to 152.

6) Sell HDFCLTD Below @ 2028 Target 1981-1923 to 1796.

7) Sell HEROHONDA Below @ 840 Target 831-813 to 777.

8) Sell INFOSYS Below @ 1386 Target 1356-1313 to 1222.

9) Sell KOTAKBANK Below @ 531 Target 512-484 to 424.

10) Sell MARUTI Below @ 656 Target 642-619 to 572.

11) Sell RELCAPITAL Below @ 1086 Target 1037-982 to 855.

12) Sell RPL Below @ 143 Target 140-136 to 129.

13) SCI Below @ 152 Target 149-144 to 134.

14) Sell STER Below @ 431 Target 418-403 to 368.

15) Sell WIPRO Below @ 338 Target 327-310 to 274.

Note--- If market open green then buy our buying tips and If market open red then sell our sell tips.

NIFTY UPPER HURDLE -3986,4108,4130,4341. AND SENSEX-13048,13457,13513,14211.

NIFTY DOWN- 3752,3642,3409,3256. AND SENSEX- 12295,11951,11198,10690.

NIFTY FUTURE UP-3993,4114,4140,4351.AND DOWN-3757,3641,3404,3253.

main Target level nifty--- 4033, 3484 & 2604 sensex-- 13538, 11727 & 9071.( date -21-03-2008)

5DMA 10DMA 15DMA 20DMA 25DMA 30DMA 50DMA 200DMA

NIFTY 4082 4166 4214 4223 4269 4296 4430 4740

NIFTY FUTURE 4084 4180 4223 4253

SENSEX 13462 13786 13967 14093 14198

BUY SIGNAL NIFTY SPOT---ABOVE 3946, NF--3946 AND SENSEX--12946 TGT NIFTY 6363 NF 6386 SENSEX 21381

SELL SIGNAL NIFTY SPOT---BELOW-3829, NF--3828 AND SENSEX--12571 TGT NIFTY 3484 NF 3453 SENSEX -- 11727

Please Exit in GOLD, SILVER & CRUDE OIL FREE FALL EXPECTED AT ANY TIME

:

Yet again a bit of thoughts which has become a much regular feature....

Indian banking system and US banking collapse:

Some months back we had lot of voices about RBI tinkering on growth with CRR , repo rate ,restrictions on FDI etc etc as measures which would de-rail growth . Although my belief was CRR and such measures are good for the long run and used it for buying as over-reaction from markets giving a bounce after making panic lows. Now lets c US scenario the free credit and that too leveraged credit was exactly opposite.

Although I know hardly about the banking system but would try to sum up things from what i get from peers in the domain and their views. Will list down some positives or differences which may be due to fortunate circumstances or RBI or because Indian banking system is not yet that developed. If there is something wrong people can comment !!!

1) US sub-prime loans
While going thru wikipedia - or second chance lending is a term used for it. Higher interest rates gave these lenders a better profit ratio and gr8 bonuses to the big-wigs but the high risk involved led to a major crisis in US financial institutions. Out here in India RBI does have strict regulations even on pvt banks , home finance and other institutions which curtails over-exposure or leverage for banks. PSU banks, PSU financial firms conservativeness keeps them safer.

2) Mortgage , Securitization and Complex derivatives.

This is where the real crisis started as the above terms were highly mis-understood or presented differently. Mortgage , Home finance was given at 100 % to value which left a big risk for banks. Further to alleviate the problems banks started packaging mortgage/loans into securities and complex derivatives which were sold to create liquidity and good returns for corporates which were entirely speculative but complexity hided the fact.
Indian banks have still not developed much on the mortgage portfolio of loans , and majority of the chunk is used for business financing. Also the indian mentality of not mortgaging assets will take time to make a shift for that portfolio of loans to grow. Also securitization , complex derivatives have not yet grown to a big extent but yes they have made their big scratches on profits but still away from asset detoriation like US.

3) Real Estate Slump Kills the system.

The US banking system was majorly flowing on the real estate prices booming which made the leverage and exposure of banks go higher and higher. The securitization and complex derivatives package made banks/corporates takes big exposures as speculative gains were enormous with real estate price upmove. I would give it a new term "" Liquid real estate "". The securities sold by Banks created liquidity for them to give out more loans and to buyers it gave a chance to make profits out of a real estate growth with a liquidity to find buyers. So the demand kept the liquidity higher and the realization of the risk far -away. Suddenly the real estate bubble blew and the crisis grew. The complexity of securitization and derivatives took a lot of time for the banking system to realize !!! and killed the system.

Luckily or can be termed unfortunately that the real estate deals are done at 20-50 % cash or black money. On that banks give only 80 % of the white amount. So this gives a buffer of safety to the banking system. Also the mortage/securitization/complex derivatives are not a grown market to make the system over-leverage. Although this can create a buffer on assets but the aggressive pvt banking sector is seeing lots of revenue/profits coming down and also losses due to defaults and increasing NPAs.
According to a brief calculations say 100 rs flat . 60 rs agreement cost . loan given 50 rs loan given. till the price doesnt fall below 60-70 rs on combined deal the loan-owner would prefer to settle the loan !! and get some money back of the Cash payment. So a brief calculation says a drop more then the extent of 30-40 % or even more could lead to major defaults but still it may not heard that deeply into assets as it does for US or other banking systems.

4) Collapse / Bankruptcy like Nine pins- I-Banks

Its an old saying it takes years to building but 4 dynamites to break them in days. This same applies to institutions which may have been 160 years but doesnt take much time for them to collapse. The banking system depends on the or money frm the market in the core principle. The profits arise only after working out ratios like CRR, PLR etc . But when liquidity crunches the balance goes haywire if the system is not kept ready for a mad rush from depositors and unavailability from money market. The mad rush doesnt take much time so the process of banks falling in line should not take a big period . Thats the prime reason why we are seeing every week a new foreign bank on the newspapers, many of them being investment banks. The dream job at an I-bank is now a nightmare. Suddenly Goldmans want to become retail banks for the same reason of control, regulation.

In India luckily or unfortunately whichever way one takes it Investment Banking has not grown and is in nascent stages so ideally great lessons being learnt !!!. Apart from that retail-commercial banking has strict guidelines/restrictions and regulations to be followed so that a mad rush may be encountered much more easily. CRR cuts were done to reduce the liquidity but at the same time it reduced the leverage for banks and the RBI can definitely arrange for liquidity if required !.

All in all Indian banking is in trouble but not in CRISIS like the US banking system. So India could ideally be learning lessons which if used could lead to a much stable banking structure in the future. Consequences being faced by US banks are severe but as i have been saying the mad rush and collapse is quick so as before my expectation remains for an economic data peaking out in September/October and would term it very close to the peak !!!! NOW.

Best Regards,

Morning Update:- (This space will be updated in the morning based on world mkt cues):
1.Bailout plan :-
2.Asian markets :-
3.
4.
********************************************************************************
Nifty trended down strongly as per the technical readings, aided by Asian market & the uncertain US bailout details.
Till we see a strong positive divergences, periodic counter rallies likely to happen.
You can see from the table the likely resistances.

Bulls got butchered all over, anything and everything capitulated, and no place to hide.. break in morning of fridays low started it all and the drift looked like not stopping at all..Nifty still held 3774 , 3rd time, MAKING TRIPLE BOTTOM in the last 3 months..Will it hold ,who knows..shorts were covered in the last 1hrs trade, lets see where this takes the market. Can we buy here well some one did ,to make the markets move up sharply.. Every one is looking at cues from US to see what where we headed..September will be ending at a very weak/capitulated point..lets see how october unfolds..take care ..cheers.

One of the methods technical analysts use is looking at CLUSTERS to find resistances-supports.Looking at the above chart you will find a good cluster being formed in the zone of 3950-4000 and a little deeper at 3900.. There are 7 levels of nifty in this zone..,which have been derived from making extensions/retracements from various levels nifty has travelled in last 2-3 months. Normally at these levels markets try to take support and change course.. As these are exceptional times a break here can take it back to test the lows or lower..Lets wait for a day or so for some confirmation, too much news is there in the pipeline and one can just get whipsawed viciously..trade cautiuosly for the next day or so...cheers

Lehman brothers, recently in August 2008, issued notes/bonds that promised 100% protection of capital. In the worst case, borrowers would get back their $1,000-per-note investment in three years. Only the last in a list of 15 risk factors mentioned the biggest danger: ``An investment in the notes will be subject to the credit risk of Lehman Brothers.'' Lehman's Sept. 15 bankruptcy leaves holders of the notes waiting in line with other unsecured creditors for what's left of their money. The assured protection of capital has vanished in thin air.

Now, in India, our good friends from the US of A have set up many offices as banks and mutual funds. Some of them have started offering exotic options to retail investors in India. A plain vanilla option is the FMP - Fixed Maturity Plan. This plan offers higher interest as compared to bank deposits, with the added attraction of tax benefits (capital gains). I did not go for this plan since I am comfortable with nationalised banks. I also have some doubts on how these funds can offer higher interest than banks. If anyone has invested in these plans, perhaps they may like to read the fine print. If there is a fine print, please share it with me so that I can share this information with all the readers.

September 29,

CHANGES HAVE BEEN MARKED IN YELLOW
Time	Target	Trend	Reversal
SHORT TERM	11855	Down	13543
MEDIUM TERM	11230	Down	14283
LONG TERM	10400	Down	16250

Explanatory Note:

The bearish island is still holding out and should take the Sensex to new lows below 12500.

OTHER MARKET SEGMENTS

THE VALUE WAVE : What are the inflection points in the process of market expansion and contraction in the wave context. How does it happen and what relevance does it have with the stock selection process in terms of psychology.

VALUE CHART 18/09/08 : Gold-X: Gold's four fold rise till April 2008 never saw a 85$ up day so why now?

VALUE CHART 05/08/08 : World stock index: A neckline pullback appears global. Next we should head to the H&S targets.

VALUE CHART 25/09/08 : Open Interest: Open Interest for the Indian market has been rising on a relative basis and is in kissing distance of the Jan highs.

SHORT TERM COUNT

On the daily chart the entire fall from Jan can be channelised. From the high of September wave c has started and we are in wave III of c with a target of 11855. With 12500 holding twice as a support it will a level to watch but as mentioned last week we had 2 islands on the daily chart one bullish and one bearish, with the bullish one now filled the bearish one is holding out and indicating a new 52 week low on the cards. 13346-13543 the gap area and sub wave ii low is the key short term resistance area in case of bounce back rallies.

MEDIUM TERM COUNT

The previous weeks bounce back rally kissed the neckline at 14200 and has been followed by an engulfing bear candle pattern this week. So 14200 continues to be the key reversal for the medium term trend which also a strong resistance as weekly 20sma is at the same level. At 12500 the Sensex also faces a secondary H&S neckline so a close below that would be sign of much more weakness in prices ahead. The lower channel targets are 11230 and 10540. Several targets converge near 10400 and so that remains a level to watch for reversal or extension of the move. Below 10400, 9700 is also important as it retraces the entire bull market since 2001 by 61.8%.

LONG TERM COUNT

The month ends tomorrow and is headed for a lower closing after two winning months. The quarterly close is also to be seen as it appears to be a spinning top or doji form, unless we see a larger sell off by tomorrow. October is typically a bearish month historically so watch out for downside potential to aggravate, however sun outage periods often see a slowdown in momentum. Although I discussed an alternative count in the value charts, I am stickling to the W-X-Y-X-Z format till more evidence is gathered. In either case the bear market is a wave 2 with the only debate being of degree [8 year or 30 year].