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 !!!.
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.
One important line i make of it is ----- " The lay investor doesnt sell in LOSS but he sells only in PANIC or DESPAIR"
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.
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.
The stock remains a favorite but preferred buying price 1320/1250/1150 which are accumulation levels.
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.
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.
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.
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.
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.
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%. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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dont try to find the bottom.for rest, be in the chat room
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
US markets today...Man thats a crash...Biggest decline in a day that I have ever seen....Biggest since 1987....
***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.
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
IF NIFTY SPOT DO NOT CROSS 4284 AND 4379 THEN.....
Ready for a big correction......up to 3621.
Warning: --Our ultimate target is , 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.
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main Target level nifty--- 4033, 3484 & 2604 sensex-- 13538, 11727 & 9071.( date -21-03-2008)
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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.
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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.
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...cheersLehman 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].
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