updated newsletter

Ethanol-blended petrol plan likely to be deferred,

Get Rid Of Sugar Stocks, Short Balrampur, Bajaj Hindusthan and Shree Renuka Sugar

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“It has been decided not to go ahead with mandatory 10% doping from next month. Instead, the latest proposal is for a pilot project study to be undertaken by Indian Oil Corporation and other OMCs using E-10 petrol in Maharashtra and Uttar Pradesh.”

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Harish Damodaran

New Delhi, Sept 14 With prices of molasses and rectified spirit going through the roof, the proposed 10 per cent ethanol-blended petrol programme, supposed to be effective from next month, has been practically shelved.

The Cabinet Committee on Economic Affairs (CCEA) had, last year on October 9, approved making 10 per cent doping of petrol “optional” from October 2007 and “mandatory” from October 2008 across the country, except in Jammu & Kashmir, the North-East and the Island Territories.

TECHNICALITIES

Subsequently, the Bureau of Indian Standards (BIS) had laid down the technical specifications for E-10, i.e. 10 per cent ethanol-blended petrol.

The new product was incorporated in the BIS specification for Motor Gasoline (IS-2796).

Currently, only five per cent blended petrol is dispensed through fuel outlets.

But now, it seems that the programme will not take off on its scheduled date.

RED TAPE

The Petroleum Ministry is yet to even issue the formal notification making 10 per cent blending mandatory, which is a precursor for public sector oil marketing companies (OMC) to float tenders to procure the additional quantities of ethanol.

“It has been decided not to go ahead with mandatory 10 per cent doping from next month. Instead, the latest proposal is for a pilot project study to be undertaken by Indian Oil Corporation (IOC) and other OMCs using E-10 petrol in Maharashtra and Uttar Pradesh (UP),” official sources told Business Line.

Pilot Studies

Simultaneously, the Automotive Research Association of India (ARAI), the Indian Institute of Petroleum, Dehradun and the International Centre for Automotive Technology (I-CAT), Manesar (Haryana), have also been asked to do pilot studies.

A sum of Rs 12.19 crore has been sought from the Ministry of Heavy Industries and the Oil Industry Development Board (OIDB) for funding these projects. The sources said the decision to defer the mandatory introduction of E-10 petrol took into account reservations expressed by auto manufacturers.

“The Society for Indian Automobile Manufacturers (SIAM) has raised certain concerns about the compatibility of the present auto engines with petrol having 10 per cent ethanol content.

It was, therefore, suggested that we do pilot studies for E-10 similar to that ones that were conducted earlier for E-5 petrol,” they added.

Rising alcohol prices

But a more fundamental reason may have to do with the recent spurt in alcohol prices.

Currently, sugar mills is Maharashtra are selling rectified spirit, containing 95 per cent alcohol, at Rs 35-39 a litre, depending upon quality.

Extra Neutral Alcohol (ENA) used for potable purposes – which has lesser impurities and alcohol content of 96 per cent – is fetching an even higher rate of Rs 43 a litre. ENA prices are similarly ranging between Rs 38 a litre in UP and Rs 45 a litre in Andhra Pradesh.

MILLS UNHAPPY

On the other hand, mills have been supplying ethanol, which has 99.8 per cent alcohol content, to OMCs at Rs 21.50 a litre – a rate that the October 9 CCEA meeting had fixed “for the next three years”. Given the realisations now from rectified spirit (which is a lower-purity product), mills may not be very keen to sell ethanol to the OMCs, unless the price is negotiated at a higher level.

Availability Crunch

Moreover, there is the problem of availability, with mills expected to crush only 210 million tonnes of cane in the coming sugar season (October-September).

Taking an average molasses recovery of 4.7 per cent and alcohol production of 230 litres from every tonne of molasses, total alcohol output will be around 2,300 million litres.

As against this, the annual consumption by alcohol-based chemical manufacturers and liquor units is estimated at 900 million litres each, with OMCs lifting another 560 million litres for five per cent blending of petrol.

There may not be enough alcohol, then, to meet the higher blending requirement unless mills process sugarcane juice directly to alcohol.

The bulls continue to get blasted from all corners. We are not talking just of the Delhi blasts. We expect a soft opening mainly due to renewed concerns over the health of the financial sector in the US and its worldwide fallout. The trend will hinge on the movement in global markets. The undertone will remain edgy despite crude falling below $100, inflation slipping a bit and better than expected IIP numbers.

Coming to crude, it is now trading below $100 a barrel. Hurricane Ike has inflicted less than expected damage to the oil production facilities. Oil prices fell below $99 a barrel on Sunday in a special early-start session. The market is still waiting for more updates on damage from the Gulf of Mexico. Ike has hurt the demand side for crude more than the supply side, according to some oil market analysts. Oil was recently trading at $99.54 a barrel after falling as low as $98.55 in electronic trading.

Ideally, this should be music to the ears of the bulls, at least in India. However, that doesn't seem to be happening, with markets in Taiwan and Singapore down well over 2% this morning. The growing nervousness is with regard to news that Lehman Brothers is planning to file for bankruptcy as it has failed to find any buyers. Even the US government has refused to lend any support to the beleaguered securities firm. The dollar has tumbled and US stock futures have taken a beating. When reports last came in, Dow futures were down over 300 points.

Markets in China, Hong Kong, Japan and Korea are shut for public holidays. Stock benchmarks in Europe and emerging markets like Brazil also rallied. The main events to watch out for will be the announcement from Lehman Brothers, AIG's restructuring plans, Bank of America's acquisition of Merrill Lynch and the Fed meeting on Tuesday. On the local front, there aren't too many positive triggers. So, the action will be stock and in some cases even sector specific. One should remain cautious, as there are still a lot of uncertainties, both globally and locally. FIIs have stepped up their selling of late, which is another major cause for worry. And, with the rupee weakening against the dollar, they may not resume their buying spree anytime soon.

BT may sell 31% stake in Tech Mahindra to TCS

Market Capital Of M&M Arm Is Close To $2.5 Billion

New Delhi: Looking to exit from the Indian venture Tech Mahindra, British Telecom (BT) is understood to have offered its 31% stake to Tata group company TCS. BT may be mulling to exit totally from the venture, sources close to the development said but no confirmation could be obtained either from the British entity or the Indian corporate house.
Asked if British Telecom had approached with its offer to sell its total or part stake, a TCS spokesperson said, "We do not comment on market speculation". Sources said that the approach could have been driven out of synergistic angle as TCS has a thriving telecom practice and most importantly BT is a valued customer of TCS. It is also not clear at this stage whether BT has kept Mahindra and Mahindra, the single largest stake holder with 44% share in Tech Mahindra, in the loop about its latest move.
Although, the valuation of the company has not yet been done by any professional investment banker, the market cap of the company is close to $2.5 billion as per the current share price of firm. At the close of trading on Friday, Tech Mahindra quoted at Rs 759.75, down 2.42% on the BSE.
Asked if the company has talked to TCS examine its suggestion of buying out the 31% stake, BT spokesperson stated, "BT does not comment on rumours and speculation. BT has operations and investments worldwide which we regularly review. India remains a critical market both for BT and our customers, and we expect to continue developing both the operational network and service that we have established over a number of years".
Tech Mahindra, which has 65% of its revenue coming from BT, recently got a $700 million contract from the UK company. According to an analyst, BT's exit may prompt other telecom rivals to look at business opportunities with Tech Mahindra. Tech Mahindra spokesperson said, "We do not comment on rumors and speculation.
As a strategic partner of BT, we have enjoyed a great relationship with BT over many years and will continue delivering on long term contracts and winning new business." The company reported a revenue of $934.7 million during FY'08, a 44% year-on-year growth. It employs about 24,000 workers.

n May David Einhorn, one of the most vocal short sellers on Wall Street, made no secret he was betting against Lehman Brothers. Now, some investors are afraid that fund managers like him will take advantage of the climate of fear stirred up by the troubles of Lehman to single out other weak financial firms whose declining share prices would bring them rich rewards.

At emergency meetings over the weekend, the heads of major financial institutions urged Timothy F. Geithner, the president of the New York Fed, and Treasury Secretary Henry M. Paulson Jr., to consider having the Securities and Exchange Commission reinstate a temporary rule to limit the risky but potentially lucrative practice of betting on a firm’s falling share price, according to two people who were briefed on, but did not attend, the meetings.

They are concerned that short sellers might fix their gaze on other big financial institutions. But Wall Street may be breathing easier after one company frequently mentioned, Merrill Lynch, began advanced talks on Sunday to sell itself, and another, the insurance giant American International Group, moved toward a restructuring in an effort to strengthen its financial position.

In July, the S.E.C. briefly halted a practice known as naked short selling after speculators placed large bets that shares of Fannie Mae and Freddie Mac, the troubled mortgage giants, would decline. That also made it harder, though not impossible, to short the stocks of 19 financial institutions, including brokerage firms like Lehman Brothers and Morgan Stanley.

The investment tactic of betting a stock will slide is not new, of course. But it has become particularly controversial in the last year, when Wall Street firms started to be singled out as the credit crisis turned the financial sector upside down.

Short sellers and their free market supporters say they have done nothing wrong. If anything, they say, they have merely spotted problems at financial institutions ahead of everyone else, making them a useful early warning system for the rest of the market.

Critics believe they have contributed to the speed of the decline of any number of financial shares.

Short-selling against financial institutions has proved particularly lucrative for hedge funds. Mr. Einhorn’s accusations included a complaint that Lehman had been failing to properly account for its marks on troublesome holdings.

Lehman’s shares were already under pressure when he took the microphone at a large industry gathering in May to lay out his case against the investment bank. The firm, he told the crowd, had used “accounting ingenuity” to avoid large write-downs and remained tainted by bad commercial real estate investments.

Mr. Einhorn stood to profit by convincing people of his view: He had been betting against Lehman’s stock — it stood at around $40 when he spoke — since July 2007, when it traded for around $70.

While Lehman’s shares have declined as investors lost confidence in its ability to repair its balance sheet, in the four months after Mr. Einhorn’s remarks, short-selling played a role in the erosion. A rapid plunge in the shares to below $4 last week created the conditions that brought the 158-year old firm to its knees on Sunday.

For all his boldness, Mr. Einhorn is aware of the havoc that bank failures can create. “We would not win if Lehman went down and took the whole financial system with it,” Mr. Einhorn said in an interview in June. “An actual collapse of Lehman — that would not be a good thing.”

Other hedge fund managers recognize the dangers and the harm that is befalling bank employees who have been paid in their companies’ stocks. “My children, their playmates’ fathers work at Lehman,” said one manager who is short Lehman and asked to remain anonymous, citing the fragility of the situation. “Obviously I had nothing to do with what happened, and the idea that I profited, and they got clobbered, and I’ve got to see them on Monday is awkward. I feel badly for them.”

Mr. Einhorn was never shy with his criticism of Lehman. He pointed to the bank’s investments in two real estate companies, Archstone and Sun Cal, and said Lehman had not marked its mortgage assets down enough. “Lehman is one of the deniers,” he said in the June interview.

To many, Mr. Einhorn simply saw the writing on the wall early. And, hedge fund managers say, Lehman executives failed to realize how much credibility Mr. Einhorn has in the investor community. Lehman might have fared better if it had raised capital or taken write-offs far earlier, as Mr. Einhorn suggested.

But to some in the world of finance, Mr. Einhorn and investors like him are dangerous.

“It is really like taking a baseball bat to someone who is down,” said Jim Hardesty, president of Hardesty Capital Management in Baltimore. “A bunch of these guys with very large bats are circling around certain companies and banging them over and over again. It is unsportsmanlike conduct.”

“My worst nightmare would be waking up one day and listening to David Einhorn talk about our company and wanting to short myself,” said Larry Robbins, chief executive of the hedge fund Glenview Capital, as he started his own speech at the May conference, the third event that included Mr. Einhorn’s criticisms of Lehman.

Hedge fund managers who focus on shorting companies stand out in the industry in an otherwise terrible trading year. Hedge funds are down more than 4 percent but short-focused hedge funds are up 9.76 percent, said Hedge Fund Research.

By coincidence, Mr. Einhorn’s fund, Greenlight Capital, is down 4.3 percent this year through Aug. 22, according to HSBC (he also invests in stocks, as well as shorting them).

His is a so-called long-short fund, which means he invests $2 buying shares in companies for every $1 he places shorting other companies. One company he took a positive view on was New Century, one of the first mortgage lenders to file for bankruptcy.

Mr. Einhorn said in June that he receives far more criticism for his short positions than he does for the positive bets he makes, which he also sometimes discusses publicly. And, he said, executives at companies are biased in the views they provide because they own so many shares of their companies’ stocks.

Mr. Einhorn declined to comment for this article and a spokesman would not say if he was still short Lehman’s stock or on what day he sold his position.

Since Rs 54,000 cr is already being arranged for, around Rs 65,000 cr has to be provided through supplementary grants by beginning of November to meet total subsidy shortfall.

Ambarish Mukherjee

New Delhi, Sept. 13 Majority of the fertiliser subsidy disbursed in cash out of the Rs 22,000 crore corpus announced by the Union Government three weeks ago in August 20 has gone towards imported urea, while a number of domestic producers have been waiting for their bills to be reimbursed.

Fertiliser manufacturers said out of the Rs 22,000 crore fund, till now only around Rs 6,000 crore had been disbursed and most of it has been given to importers of urea because foreign suppliers mandatorily seek advance payment before shipments.

Urea is imported only through Government agencies. Some of the bills of domestic urea manufacturers are pending for more than four months now, industry officials said.

The average subsidy for domestic urea is in the range of Rs 13,000-14,000 per tonne while for imported urea the amount stands in the range of Rs 22,000-23,000 per tonne.

The cash provision was made despite objections from the Ministry of Finance which was of the view that subsidy be paid to banks through bonds. But banks were not willing as they would have to sell the bonds at a discount, the Minister for Fertiliser, Mr Ram Vilas Paswan, had said on the day of the announcement.

Finally the Prime Minister had to take a personal initiative to convince the Finance Ministry to release the fund in cash directly to the fertiliser companies, Mr Paswan pointed out.

Provision Estimate

The Minister had also said the cash provision has been made because the fertiliser subsidy bill for the year is now estimated to be around Rs 1.19 lakh crore for 2008-09 against a Budgetary provision of approximately Rs 32,000 crore.

It has been decided that the remaining amount would be provided for in the supplementary grant proposal during the monsoon session. Since Rs 54,000 crore (Rs 32,000 plus Rs 22,000) is already being arranged for, around Rs 65,000 crore has to be provided through the supplementary grants by the beginning of November in order to meet the total subsidy shortfall for the year, departmental officials pointed out.

Market may open up. Market may up between 10.27 and 10.50 Market may steady or up side between 11.50 and 12.10. Market may close at up to previous closing.




SHARE YOUR THOUGHTS! LEAVE A COMMENTS


Opening Bell Call
Buy

RELIANCE - Reliance Industries Ltd
MARUTI - Maruti Suzuki India Limited
POWERGRID - Power Grid Corporation of India Limited
CAIRN - Cairn India Limited
INFOSYSTCH - Infosys Technologies Ltd.
ONGC - Oil & Natural Gas Corpn Ltd

On 12th September 2008 - The BSE Sensex closed at 14,000 (down 323 points) while the NSE Nifty closed at 4228 (down 61 points).

Opening Bell Call
Sell

ICICIBANK - ICICI Bank Ltd
ADLABSFILM - Adlabs Films Limited
ROLTA - Rolta India Ltd.
SUZLON - Suzlon Energy Limited
TCS - Tata Consultancy Services Limited

Technical Analysis for 15th September 2008

BSE-SENSEX - Major Support - 14122, 13966, 13811, 13716, 13622, 13372, 13122, 12872
BSE-SENSEX - Major Resistance - 14216, 14311, 14466, 14622, 14872, 15122, 15373

NSE-NIFTY - Major Support - 4250, 4214, 4177, 4152, 4127, 4065, 4004, 3942, 3881
NSE-NIFTY - Major Resistance - 4275, 4300, 4337, 4373, 4434, 4496, 4557, 4619

Sensex Technical View :
The expectation of Sensex crossing 15100 -15500 in near term is going for a toss it seems which was a little bias we had before the NSG deal etc . 14100 was broken on friday which is a very important level and 2-3 sessions below it would confirm the head and shoulders formation.
The pattern suggest a fall to 13100-13300 in that scenario.
The 61.8 % correction of 12500 to 15580 comes to around 13685. So the last major support is placed around 13700. Below which it would imply 13k and a threat to it.

Nifty Technical View :
For Nifty the similar head and shoulders pattern suggests to watch the 4200-4230 levels and is very close to break that. So a close below 4200 for 2-3 sessions would imply 4000 or lower levels. The 61 % level comes to 4120 levels.

Traders can continue to watch the 13700 level and be stock specific with strict stoplosses as the gap ups and gap downs are common place.
Investors those who followed the view at 14k-12.5 k and exitted at 15k + in particular stocks should continue to remain patient and wait for stock specific dips.

Medium term View :
As has been presented in the post below and in the presentation Come look into the future. Technically Sensex is closer to the end of the bottom out scenario which could happen around Sept/Oct or Jan 09. On a price basis 12500 could be the bottom or can go to a level of 11900 or + - few hundred points but what is more important is the breakout after the bottoming which we would be waiting for. Details in the ppt.

Investors should look to start buying in small lots and good quality stocks in dips closer to 13k or in a stock specific manner in the next few months and buy at regular intervals with a long term view and good returns in the next 1 year or more. Although sentiments may not improve in next few weeks/months but the returns would over a period of next 6 mths-2 yrs or sooner also.

Stocks to watchout for :

Reliance and Rpl as seen saw some selling and Reliance is close to 1920 and RPL hasnt touched 148 yet. But technically continue to look weak and breaking below 1920 could touch 1800-1850 and 140 ( below that next imp support is 110 ) for RPL. Investors can wait for those levels and start SIPPING slowly below 1900 and 150 for long term .

GE shipping has come down to 320 levels close to Jan lows. Traders can buy arnd 315 with a stop of 305 for a bounce back of 5-10 % and if it closes below 305 can short for 10 % ... Either trade possible.Investors can look for 280 -260 if it does come for long term.

Chambl Fertilizers looks good for bottom fishing to buy around 63 or lower with a closing stop of 60 tgt 70-75.

Nifty looks very weak on charts, and till it trades above 4267, it will be in danger zone. Breaking 4208, it becomes very weak in short term, and it is a sell on every rise.Breaking 4208, nifty can fall to 4166-4136.any buying(intraday), should be done only if 4267 is crossed.in fact, in eod charts, nifty shows a target below 4080 with a SL of 4350 on closing basis.
(60min intraday chart attached,all fut levels)


As said the markets bounced from the supports and opened with a gap up ,but couldnot bear the resistance levels.
Technically the markets still looks weak and could see some more downsides in coming sessions.
Moreover the sensex has crucial supports around 13650 levels , breaching of which is likely to take the sensex to previous lows of 12514 and may be even lower.
Structurally the markets are in a deceptive mode and will give wild swings .
However the markets will remain highly volatile and choppy.
Though the pattern suggests that the markets can turn tide anytime on both sides , so one needs to be cautious.
The supports for the nifty is at 4150 levels and resistance at 4450 levels
The supports for the sensex is at 13650 levels and resistance at 14500 levels


Stocks to watch

Icici bank looks weak

Dlf looks weak

We have broken the uptrendline which took us up rom 3700 levels. RSI has also broken trendline on daily charts. Stochastics indicator pointing downwards. What does this mean? Well, NIFTY is weak and market seems to be headed down. Maybe 4000 or below. Its a short on every rise market now.

Sensex :: We are given here complex wave count in intraday chart.. Primary, Intermediate and Minor wave in intraday chart still looking up. If Sensex hold important support 13700 to 13620 then we see Intermediate x of c moving up with target of 15000 +.. Intraday chart enter in oversold zone. As per wave count with all indicator and channel supports bounce beck may be possible from lower level.. Avoid buying below 13620..

Well

I was not able to follow up on my latest post...Since of Hurricane IKE

in Texas..Donno if anyone saw the news on this but things were quite

bad over here...No Net..No Water...No Power..No nothing at

home..hehe....out at a friends house to check things... Well I am still

of same view...Msg posted few days back when nifty was around

4350....still of same view..I think first bottom will come at around 2

months or so from now....Not sure on time yet but with respect to

levels, expecting 3600 first, 3200 second and finally 2960...not more

than that at present because of some VERY VERY important support

lines...But we can reevaluate when we get there....I am not going to

post an updated chart here coz of the reasons I updated above...Its

tough times...And I dont have much time...So thats it... All the bestto all... Best.

Reliance Futures chart shows a fantastic head and shoulders (Oh no, not again !) pattern with the neck line broken at 2082. A pullback to this level is likely (yellow circle) and that will be an excellent place to open fresh shorts on this troubled stock. If there is no pullback, then join the fun and rip apart this stock to pieces ! The target based on the classical H & S interpretation is 1764! Boy!

The Indian market saw continue selling pressure and break the important levels of 4200 mark on intraday term but managed to close above it .For coming session if nifty trade below 4200 we can test levels of 4159-4100 on the other side 4290 -4323 will act as resistances zone .
Last week nifty fell with 2.8% and close in deep red zone .Inflation came at 12.10% compare to 12.34% for the week ending August30.2008 and IIP number released for july 2008 during the week and industrial output grew 7.1% but market saw selling pressure at higher levels. For coming session if nifty break 4150 we can test again 3800 levels .on the other side 4346-4400 will act as strong resistances zone .If nifty close above 4341 it can test 4404 -4467 on the lower side it can test 4099 -4035 levels.
NIFTY WEEKLY we can see tail on upper side it suggest selling at higher levels and nifty not able to close above trend line .Nifty had cross three time above the trend line but always close below the trend line on weekly basic.

.
SELL KOTAKBELOW 579TGT564>555 STOPLOSS 586
15sep SELL TCSBELOW 810 TGT 796>788STOPLOSS 821

SELL ICICIBANK BELOW 655 TGT640>632 STOPLOSS 670

SELL SATYAM BELOW 406 TGT 400 >395 STOPLOSS 411

As SGX nifty is trading at 4095 nifty will be in downtrend with channel as shown in chart.

''We expect the Sensex to repeatedly touch both extremes of the 13,000-16,000 band in the next six months. At each extreme, investors should prepare portfolios for a market move to the other''...Credit Suisse

As expected the Nifty, after making a confirmed double top pattern on the 30 minutes chart, came down. Though, the target for this double top formation was 4160 but there was support on the daily charts at 4200. The Nifty respected this support, made a low of exactly 4200.15 and then recovered to end the day at 4228 to close 62 points down while the BSE Sensex ended the day with a loss of 323 points. European markets were good on Friday and ended the day with gains between a percent and 2 percent. The American markets, however, were flat. Crude also remained, more or less, flat and maintained support at $100 to end the day at $101.

Seen above is the daily chart of Nifty and, as can be seen, the Nifty has now reached the bottom end of the range at 4200. It is expected to find support at these levels, unless it proves otherwise. In the bottom half of the chart is the Relative Strength Index (RSI) and that shows that it has not yet reached 40 (it is at 42, to be precise). The price at the support level and the RSI still above 40 may indicate that the support maybe respected by the markets. In case they don’t and 4200 is broken decisively on the charts then we may be staring at 3800 in the face.

Since we know that we are at the support level, this may be a good time to buy Nifty futures or Nifty calls. If the markets were to break 4200 then we shall close our long positions with a small loss. For the record, Nifty 4200 calls are trading at Rs.138/- while 4300 calls closed ar Rs.90/- per Nifty. The lot size happens to be 50 Nifties

Nifty (4228) Sup 4150 Res 4275

Sell ACC (592) SL 597
Target 582, 579

Sell Siemens (520) SL 525
Target 510, 508

Sell HCL Tech (229) SL 233 Target 221, 219

Sell DLF (466) SL 471
Target 456, 452

Buy HUL (249) SL 245
Target 258, 260

An attempt to read the Crude charts.

The weekly chart below, I have marked with two Fibonacci retracements, the blue dashed lines are drawn from the January 2007 bottom to July 2008 top and the one in red dashed lines is more recent one from the January 2008 bottom to July 2008 top. First a look at the current price, its way down the value (MA’S) zone and needs to pull back or stall so that the MA,s can catch up with it. Secondly we can see that the price has retraced below 38.2% level of the move from Jan’07 to Jul’08. 50% retracement level at $98 is a good weekly support. It has also retraced below 61.8% level of the move from Jan’08 to Jul’08. There is a confluence of two fib lines at $110 which is likely to pose strong resistance or at least slow things down when crude reaches there (actually with crude one can never really tell when it slows or flies!!!). Above that we have MA’s converging near the $118, a logical target for a pullback. The MACD histogram below has traced a multi year low; suggestive of price going down in the near future, maybe a test of January lows of about $85?

The daily chart below is hinting about the pullback we were just discussing above. Here also the price is way below the value zone, the impulse bar has turned blue, time to cover shorts or tighten the stops on shorts. The MACD histogram has traced a bullish divergence, suggesting that the bears are loosing some steam. Crude can pullback to its value zone (the MA’s) at $110 or better still go up and test the multi year Uptrend line (now resistance) near about $115/117 which is once again as mentioned above is also our weekly resistance.

"The person who says it cannot be done should not interrupt the person who is doing it."

Chinese Proverb

1. SBI has a positive outlook for the near term.

2. SBI enjoys support at levels of Rs 1449- Rs 1399.

3. SBI has resistance at Rs 1651- Rs 1701.

4. As a strategy one can go long in the stock for online stock trading with stop loss as 1398.

1. Tata steel as suggetsed in previous week gave a break down and will remain so till the time it does not move above the level of Rs 561.

2. If the downward trend continues than the stock has a target of Rs 490 on the lower side.

3. Long term investors need to watch stock breaking the level of rs 489- Rs 469 as thereafter stock can touch Rs 350 levels on the extreme downside.

1. Presently a single day wipe out of Rs 100 in Infosys has led to the conclusion that again trend has turned down and one may see the downward target of Rs 1474- Rs 1300.

2. The stock has to move above the level of Rs 1801 to ensure that the positive trend in stock is maintained.

3. Resistances for Infosys:1,706-Rs 1,751.

4. Support for stock exist at Rs 1,606- Rs 1,579.

1. If Reliance breaks 1899 level than further fall will commence in stock; else stock will consolidate between range of Rs 1900- Rs 2200- Rs 2400.

2. If Reliance breaks level of Rs 1899 than the stock is likely to fall till Rs 1701-Rs 1499 levels.3. As a strategy for stock trading one can short the stock on its breach of 1899 levels.Profitable Indian

MARKET WILL TAKE CUE FROM NUCLEAR DEAL DEVELOPMENTS

Bse Sensex(14000.81) and Nifty(4228.45) closed approximately 3.3% and 2.8% down each last week . Inflation was at 12.10 v/s 12.34 and Crude fell to 100 $But market failed to recover due to weak global cues.. Market will take cue from Crude oil prices and developments on nuclear deal..Support for Sensex is 13650 and for Nifty 4120 Resistance level of for Sensex 14400 and 4320 for Nifty. Local fund buying will be visible at every decline.
Nifty put-call ratio is 0.82 .Nifty 4100 PUT saw addition in open interest.Reliance and Wipro saw addition in open interest..
Strategy for Future & Option players

1)RNRL(88) -Lot Size-1788 Shares
Buy One Call Option September Month Price 90@3.00Rs.
Sell One Call Option September Month Price 95@1.90 Rs.
Premium Paid=3.00*1788=5364.00 Rs.
Premium Received =1.90*1788=3397.20= Rs.
Net Premium Paid=5364.00-3397.20=1966.80. Rs.
Maximum Profit=95-90=5*1788=8940.00-1966.80=6973.20 RS.
Maximum Loss=1966.80 Rs.
Break even point=91.10 Rs

2)RPL Future(154.50) -Lot Size 1675 Shares
Buy One Lot RPL September Future@154.50 Rs.
Sell Call Option RPL September Month Strike Price 160@2.40 Rs.
Premium Received=2.40*1675=4020.00 Rs.
Maximum Profit=160-154.50=5.5+2.40=7.90*1675=13232.50 Rs.
Maximum Loss=Unlimited.

Trading Idea
1)NagarjunaFertilizers(34.80)Buy this stock in decline and trade
2)CentralBank(57.45)Buy this stock in decline and trade