Sensex Technical View :
Bounce back seen in indices after getting into highly over sold range. Now technically if we consider 10200 to be a short term bottom then the bounce back targets could be as follows.
On fibonacci retracements the levels would be 12300/12900 as 50 % and 61.8% .
Also in all previous bounce backs since January the bounce backs have been to the extent of 23-25 %. So that would come to again 12500-12800 roughly.
Extreme short term trendline comes to around similar levels. Only a strong crossover above 13k can lead to 14200-14500 zone. From the resistance zones we can see a
Also on the lower side the target zone of 9700 and 2950 on Nifty continue to remain open technically and may get out of picture if we hold above 10200 till Jan 2009 as we can assume the correction could last 13 months. Technically Sensex continues to remain in the standard lower tops and lower bottoms .
Only a good bottom base formation followed by a higher top and higher bottoms to confirm the BIG signal which can come now after a few months after Jan 09 -- CHECK CHART only difference in the chart is the low was to be around 11900 50 % retracement but has come closer to 9700 61 %. The more important to note is the consolidation phase and then a breakout which may take quite some time but in between we could larger trading range and opportunities. We will continue to update on the same.
We saw a good bounce in many stocks and the strong ones may come back faster. Investors can look to reduce exposure at 12300-12900 if it comes. Short term trading resistance at 11900-12300 Sensex and 3700-3750 on Nifty ( Long Nifty advised to clients at 3450 and then later some trades to bring average to around 3300 -3350 tgt is 3700-3750 ) .
Stocks to watchout for :
DLF can give a bounce back to 321 -354 zone in extreme short term.
Lanco Infra buy around 175 stop of 167 tgt 195-210.
Bharat Forge , Century textiles , Arvind Mills, Bombay Dyeing can also see good deadcat bounces.
SBI has been trading in a range of 1300-1600 so one can take a short position around 1580 with 2 % stop . Similar with NTPC at 185 with 190 stop. For people who have bought on lower levels can book at the higher end with a stop of re-entering.
Market Observations :
Core Projects
Yet another victim of margin selling or leverage positions sold for shares which may have been pledged. Earlier we had seen similar things happen with many stocks. The stock has cracked from 240 to 60 in less then 2 sessions whereas the stock was very stable all throughout.
Now going with the data -- Friday saw a volume of around 15 + 23 lakh on both indices and 30-40 % delivery which was usual but the stock saw a drop in last 2 hours of trade implying some major investor/HNI/institutional pullout. On Monday the stock dropped to 60 by end of day with volumes of 2 crores + 2 crore shares. With a rough delivery volume of 25-27 % .
As per BSE bulk deals 31 lakh shares were sold by Indiabulls financial services at a price of 69 which clearly shows quite some shares must have been sold all through the lows. So out of the 54 lakh delivery trade 31 lakh shares was a single entity or a group of entities which might have pledged shares with Indiabulls. The selling on friday must have triggered further margin selling calls on monday and the stock has corrected without a major fundamental change.
My personal view is that stock can get a valuation of 150-250 in good days for a education sector stock with a book value of 44 , 2 rs paid up and last year eps of 11. Also the sector commands a very high p/e. Although have advised buying very small quantity at 100 n 150 with a long term patient view and would now prefer to add once it stables out arnd 48-75 zone. A V Birla P/e arm has taken warrants with a conversion rate at 305 though whether they may or may not convert. Investors can do adequate research and take exposure accordingly as the risk also is there as stock can remain volatile in near term and may need patience for long term gains.
Best Regards,
Nifty :: We clearly say in our yesterday post any time bounce beck possible from support and Nifty bounce beck from our first support 3192.Exactly made low of 3198 on Friday.. Short term momentum clearly up above 3463.. Still too many strong hurdle at higher level avoid buying at high near 3700/3800.. May be Nifty once again came down in coming days and settle at lower level for big up swing move..In one level above 3522 momentum seems up, below 3522 momentum down.. Resistance at 3522/3537/3580/ 3600/3630/3693/3720/3750/3880 .. Supports 3458/3346/And supports zone 3320 to 3230.. (First strong resistance in up move at 3600/3630/3693/3720 above it next strong resistanc
Pullbacks after so much hammering, result in classic mean reversions - the 20 period average is now at 3931 - and that is where prices will attempt to go but before that happens, they will face strong resistance in the band 3760-3820. Failure to cross this band will mean a retest of the bottom at 3216.
Bounce back seen in indices after getting into highly over sold range. Now technically if we consider 10200 to be a short term bottom then the bounce back targets could be as follows.
On fibonacci retracements the levels would be 12300/12900 as 50 % and 61.8% .
Also in all previous bounce backs since January the bounce backs have been to the extent of 23-25 %. So that would come to again 12500-12800 roughly.
Extreme short term trendline comes to around similar levels. Only a strong crossover above 13k can lead to 14200-14500 zone. From the resistance zones we can see a
Also on the lower side the target zone of 9700 and 2950 on Nifty continue to remain open technically and may get out of picture if we hold above 10200 till Jan 2009 as we can assume the correction could last 13 months. Technically Sensex continues to remain in the standard lower tops and lower bottoms .
Only a good bottom base formation followed by a higher top and higher bottoms to confirm the BIG signal which can come now after a few months after Jan 09 -- CHECK CHART only difference in the chart is the low was to be around 11900 50 % retracement but has come closer to 9700 61 %. The more important to note is the consolidation phase and then a breakout which may take quite some time but in between we could larger trading range and opportunities. We will continue to update on the same.
We saw a good bounce in many stocks and the strong ones may come back faster. Investors can look to reduce exposure at 12300-12900 if it comes. Short term trading resistance at 11900-12300 Sensex and 3700-3750 on Nifty ( Long Nifty advised to clients at 3450 and then later some trades to bring average to around 3300 -3350 tgt is 3700-3750 ) .
Stocks to watchout for :
DLF can give a bounce back to 321 -354 zone in extreme short term.
Lanco Infra buy around 175 stop of 167 tgt 195-210.
Bharat Forge , Century textiles , Arvind Mills, Bombay Dyeing can also see good deadcat bounces.
SBI has been trading in a range of 1300-1600 so one can take a short position around 1580 with 2 % stop . Similar with NTPC at 185 with 190 stop. For people who have bought on lower levels can book at the higher end with a stop of re-entering.
Market Observations :
Core Projects
Yet another victim of margin selling or leverage positions sold for shares which may have been pledged. Earlier we had seen similar things happen with many stocks. The stock has cracked from 240 to 60 in less then 2 sessions whereas the stock was very stable all throughout.
Now going with the data -- Friday saw a volume of around 15 + 23 lakh on both indices and 30-40 % delivery which was usual but the stock saw a drop in last 2 hours of trade implying some major investor/HNI/institutional pullout. On Monday the stock dropped to 60 by end of day with volumes of 2 crores + 2 crore shares. With a rough delivery volume of 25-27 % .
As per BSE bulk deals 31 lakh shares were sold by Indiabulls financial services at a price of 69 which clearly shows quite some shares must have been sold all through the lows. So out of the 54 lakh delivery trade 31 lakh shares was a single entity or a group of entities which might have pledged shares with Indiabulls. The selling on friday must have triggered further margin selling calls on monday and the stock has corrected without a major fundamental change.
My personal view is that stock can get a valuation of 150-250 in good days for a education sector stock with a book value of 44 , 2 rs paid up and last year eps of 11. Also the sector commands a very high p/e. Although have advised buying very small quantity at 100 n 150 with a long term patient view and would now prefer to add once it stables out arnd 48-75 zone. A V Birla P/e arm has taken warrants with a conversion rate at 305 though whether they may or may not convert. Investors can do adequate research and take exposure accordingly as the risk also is there as stock can remain volatile in near term and may need patience for long term gains.
Best Regards,
Nifty may open around 3640 levels for intraday , resistence being at 3641 levels, above this level, nxt targets are 3667-3712 where one should be very cautious about longs.
3750 is a level which may not cross in short term and positional traders may look to short at those levels.
Just a word of caution for those over bullish traders, today is just the 2nd day that we will be trading after making a yearly low, and this is just a technical bounce. so dont forget to book profits as and when you get them.
Nifty :: We clearly say in our yesterday post any time bounce beck possible from support and Nifty bounce beck from our first support 3192.Exactly made low of 3198 on Friday.. Short term momentum clearly up above 3463.. Still too many strong hurdle at higher level avoid buying at high near 3700/3800.. May be Nifty once again came down in coming days and settle at lower level for big up swing move..In one level above 3522 momentum seems up, below 3522 momentum down.. Resistance at 3522/3537/3580/ 3600/3630/3693/3720/3750/3880 .. Supports 3458/3346/And supports zone 3320 to 3230.. (First strong resistance in up move at 3600/3630/3693/3720 above it next strong resistanc
See the US markets today...This is one for the record books. The fractal and yours truly nailed the bottom here in real time and fully boarded the bull bus...Hope some of the readers of this blog are aboard with me :) Ready for a 10% up day or close? :-) I will probably exit a good chunk of my leveraged positions today..Cash I am planning to hold for some time... I believe you aint seen nuthin yet! Still lot of gloom and doom and bears around...This ofcourse will continue to provide fuel for the ongoing rally. A couple of charts for your review below. Comments on the charts. The other important chart I am looking at is the weekly nifty with stochastics...Still not turned up but close... As I said before...You aint seen nuthin yet!...Enjoy the charts. Best.    | |
Pullbacks after so much hammering, result in classic mean reversions - the 20 period average is now at 3931 - and that is where prices will attempt to go but before that happens, they will face strong resistance in the band 3760-3820. Failure to cross this band will mean a retest of the bottom at 3216.
***Technicals
Nifty is in terminal phase of downtrend and is correcting upwards.
Nifty is in process of intermediate bottom formation.
******Trading system
3d LMA- 3267.
3d HMA- 3539.
3d SMA- 3428
8d SMA- 3648
34d SMA- 4102
~BIAS - neutral
~MOMENTUM - negative
~TREND – negative.
~STRATEGY-no new call generated.
Shorts should have stop at 3539 and Longs should have stop at 3267.
***Derivatives (October 13)
-Nifty (October) future premium increased to 43 points and around 1.8 lakh shares were shed in open interest with increase in the cost of carry, indicating short covering at lower levels.
-Nifty call option add 8 lakh shares in open interest, whereas put option add 15 lakh shares in open interest. Thus open interest put-call ratio increased to 0.75.
-Implied volatility has decreased by 800-900 points which indicate stability in the coming days.
***Fund flow (October 10)
~FIIs net in Index fut. - 8 cr
~FIIs net in Stock Fut. + 143 cr
~FIIs in Cash Market - 2323 cr
~Mut Funds in Cash Market + 315 cr
***total fund flow – 1873 cr today & nifty was down by 233 points.
*** So far net fund flow of - 7723 cr in October series. (Nifty is also down in October series).
Nifty is in terminal phase of downtrend and is correcting upwards.
Nifty is in process of intermediate bottom formation.
******Trading system
3d LMA- 3267.
3d HMA- 3539.
3d SMA- 3428
8d SMA- 3648
34d SMA- 4102
~BIAS - neutral
~MOMENTUM - negative
~TREND – negative.
~STRATEGY-no new call generated.
Shorts should have stop at 3539 and Longs should have stop at 3267.
***Derivatives (October 13)
-Nifty (October) future premium increased to 43 points and around 1.8 lakh shares were shed in open interest with increase in the cost of carry, indicating short covering at lower levels.
-Nifty call option add 8 lakh shares in open interest, whereas put option add 15 lakh shares in open interest. Thus open interest put-call ratio increased to 0.75.
-Implied volatility has decreased by 800-900 points which indicate stability in the coming days.
***Fund flow (October 10)
~FIIs net in Index fut. - 8 cr
~FIIs net in Stock Fut. + 143 cr
~FIIs in Cash Market - 2323 cr
~Mut Funds in Cash Market + 315 cr
***total fund flow – 1873 cr today & nifty was down by 233 points.
*** So far net fund flow of - 7723 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.
*******so in a nutshell, net fund flow of
– 15141 cr after May closing of 4835,
- 7070 cr after June closing of 4315.
Expect broken support 3800 area to be retested if 3200-3000 holds.
Probably gonna tank once from there, so look for a short setup near 3800. If u.s goes through with the bailout then we might just rally through 3800 but otherwise I suspect it will give good res.
As for the longer term bull perspective
You can place your 1-2-3-4 wherever you like.
Just check the elliot osc, read up on bill will/aget etc. the basic idea is if elliot osc is pulling back to 0 line, then assume w4. If you have divergence and a lower high in elliot osc + a drop then w5 is over.
Simple stuff:
1-2, 3 big wave,
4th consolidation.....
but the 4th must end above wave 1 top...
Thats the key. w1 top = 2000/2004 highs near 2000-2100 nifty.
Fundamentally p.e of 10 for the stock market is pretty much the ground floor for large caps. (trailing 10x = 2250, forward 10x =2600 ish)
I already went all in on friday so I do have a bullish bias.
Some fresh FDs will mature in july or so , so until then I got nothing to do in the market.
Still studying for the CAT.
Still don't have that perfect 6pack..
I think I'll bulk up a bit more then cut back to get a lean muscular look.
Right now 1 rep max on the bench is 200 pounds, Goal is to take that up to 300.
http://www.ncbi.nlm.nih.gov/pubmed/12859029
My BMI is around 22, optimal bmi for my age group is 21.6. So I don't wanna drop too much weight, just wanna drop a bit of fat and replace it with muscle.
Might take a year or 2 to get in perfect shape.
Even my portfolio is a little chubby right now. I have way too much rcom. avg price 400 need to book half in a rally and diversify. The gap down 480 area is mega res and should hold in most rallies.
It might also take the market a year or 2 to get up to any real levels where people like me can earn a profit (I've made 2 major investments this year 4600 and 3200.., now I can't really buy any more and I sure as hell am not selling at a loss considering I am only 27. I can wait as long as it takes. In the long run I'll still outperform FDS.)
Favorite sectors: power, pharma, telecom, metals
If I can free up some more cash will buy REL
on friday I bought rcom/tisco/ranbaxy.
-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.
*******so in a nutshell, net fund flow of
– 15141 cr after May closing of 4835,
- 7070 cr after June closing of 4315.
Expect broken support 3800 area to be retested if 3200-3000 holds.
Probably gonna tank once from there, so look for a short setup near 3800. If u.s goes through with the bailout then we might just rally through 3800 but otherwise I suspect it will give good res.
As for the longer term bull perspective
You can place your 1-2-3-4 wherever you like.
Just check the elliot osc, read up on bill will/aget etc. the basic idea is if elliot osc is pulling back to 0 line, then assume w4. If you have divergence and a lower high in elliot osc + a drop then w5 is over.
Simple stuff:
1-2, 3 big wave,
4th consolidation.....
but the 4th must end above wave 1 top...
Thats the key. w1 top = 2000/2004 highs near 2000-2100 nifty.
Fundamentally p.e of 10 for the stock market is pretty much the ground floor for large caps. (trailing 10x = 2250, forward 10x =2600 ish)
I already went all in on friday so I do have a bullish bias.
Some fresh FDs will mature in july or so , so until then I got nothing to do in the market.
Still studying for the CAT.
Still don't have that perfect 6pack..
I think I'll bulk up a bit more then cut back to get a lean muscular look.
Right now 1 rep max on the bench is 200 pounds, Goal is to take that up to 300.
http://www.ncbi.nlm.nih.gov/pubmed/12859029
My BMI is around 22, optimal bmi for my age group is 21.6. So I don't wanna drop too much weight, just wanna drop a bit of fat and replace it with muscle.
Might take a year or 2 to get in perfect shape.
Even my portfolio is a little chubby right now. I have way too much rcom. avg price 400 need to book half in a rally and diversify. The gap down 480 area is mega res and should hold in most rallies.
It might also take the market a year or 2 to get up to any real levels where people like me can earn a profit (I've made 2 major investments this year 4600 and 3200.., now I can't really buy any more and I sure as hell am not selling at a loss considering I am only 27. I can wait as long as it takes. In the long run I'll still outperform FDS.)
Favorite sectors: power, pharma, telecom, metals
If I can free up some more cash will buy REL
on friday I bought rcom/tisco/ranbaxy.
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