Sensex Technical View :
Sensex has taken a quick retreat from 11900 and has already touched 10700. This is a much quicker pull down from an extreme short term resistance which implies lesser strength. Sustaining below 10700 or even 10500 then the recent low of 10200 could be next support which if broken then the most important support is 8800 and 9500-9700 which is fibonacci level. Ideally a long stop loss should be placed at 10200 /10500 depending on risk apetite and time period for a trader. Investment buying further should be done only in 8800-9700 zone or wait for a turnaround signal and buy at higher levels.
Another thing is although Sensex may have not made a new low just happened to check that many index and non index stocks have actually went on very close or made new lows which is not a gr8 sign and ideally one should prefer to wait before taking a trading call and for investments it has to be slow and staggered in the range of 8800-9700 . Also in many stock specific the charts are at a crucial stage ... Will discuss with charts in next post .
So the real question that lies is whether markets want to bottom out at 8800-9700 or take a short at 12300-12900 first ... Next 3-5 sessions would give more clarity technically and fundamentally.. So ideally wait before taking quick decisions.
Market Observations and Thoughts :
The relentless selling continues from FIIs and redemption pressures for MFs, panic selling and all sorts of pressures have still remained in place. Although investors may have started buying in small lots but one needs to be cautious with their choice of stocks as not all stocks may bounce back sharply and regain ground. Real estate,cap goods , commodity stocks with high debts, pvt banks should actually take longer time to get back into good days. PSU banks as being mentioned since a long time are best to park money with high dividend yields. The view of avoiding pvt banks , real estate , cap goods since months has left us better placed !!! ...
So even if one has started buying at sub 12k levels and have seen 10-20 % dip in stocks even after staggered buying and if one has deployed part of the cash then should now wait with the rest either for 8800-9700 or a sustained sideways or consolidation followed by a turnaround to further take long term investments. Short - term trading , averaging , re-entering after bounce -sells or selling and re-entering will need to be used in investments already made to optimize the cost of acquisition and money management too.
Stocks to watchout for :
ITC recent low of 155 is very crucial for short term.
RIL low of 1480 , RCOm low of 225-230 , Punj Lloyd 180 , LNT 850 , Renuka Sugars 59-60 below which if they close could see 5-15 % correction.
CMP : Rs 98
Target : Rs 50
Correction : nearly 50%
Reason : Intermediate Supports at 100 for Essar Oil Broken for the first time
So this wind fall will lead to target of 50. No Intermediate Supports visible in
path of the downtrend
It turned out to be a very good idea to get out of leveraged positions on the big upmove we had before...As I had adviced here...What next?
I am confused but I think we shall try to go a bit more higher and then come back down again to retest the lows and slightly lower...So what to do? Sitting out a bit until some sanity returns is a good idea...In cash, its a good idea to keep buying the dips...I am still longer term quite bullish...Only thing I am not very sure about is how the lows retest will happen...
From 3300 up to 3600/3700 again...And then back down to 3150/2900 range? Something like this I am thinking about now...And that low should be the major low...5th wave low that is.
Its all speculation...So better to avoid leveraged positions...In cash as I said...Keep buying the dips...I think anything around 3200-2900 is an excellent buy.
Nifty :: After an multiple bearish candle pattern Nifty break one by one all imp support. We clearly indicate such kind of situation in our 14th Oct. post.. Once again Nifty enter in strong support zone between 3320 to 3230.. Below it next strong support 3155/3076/3000. As per wave count it may be last leg of extended C of 5th wave. And that’s why look this correction as buying opportunity.. Slowly- Slowly accumulated A group stock in every decline for mid term prospective. Our strategy for 16th Oct. Sell at high (S.L 3494) Buy on deep.. Resistance for up move at 3388/3460/3494.. Supports 3272/3250/3200/3155/3076/3000..
The Indian market opened on weaker note and close in deep red zone. Market opened lower on negative global cues .For coming session 3269 -3200 will act support zone if we break 3190 we can make new low on the other side 3430 -3585 will act as resistances zone .If nifty trade above 3430 it can test 3496-3545 levels.Reliance Industries lost 7.14% to Rs 1504 on BSE on fears the company may report fall in its gross refining margins in Q2 September 2008 over Q2 September 2007 largely due to sluggish demand for petroleum products in key Western markets.
On BSE, 14.04 lakh shares were traded in the counter. The stock had an average daily volume of 13.69 lakh shares in the past one quarter.
The stock hit a high of Rs 1598 and a low of Rs 1502.20 so far during the day. The stock has a 52-week high of Rs 3,252.10 on 15 January 2008 and a 52-week low of Rs 1,480 on 10 October 2008.
India's largest private firm in terms of market capitalization and oil refiner outperformed the market over the past one month till 14 October 2008, declining 16.14% as compared to the Sensex's decline of 17.98%. It had underperformed the market in the past one quarter, falling 20.87% as compared to the Sensex's decline of 13.86%.
The company's current equity is Rs 1,573.79 crore. Face value per share is Rs 10.
The current price of Rs 1504 discounts its Q1 June 2008 annualized EPS of Rs 113.07, by a PE multiple of 13.30
As per analysts at foreign brokerage houses, Reliance Industries (RIL) may report a 4.3% fall in its gross refining margins (GRM) to $13 per barrel in Q2 September 2008 over Q2 September 2007. The GRM is the difference between the selling price of the finished products and raw material cost.
On 3 October 2008, Reliance Industries said it has alloted 12 crore equity shares of face value Rs 10 each to various promoter group firms upon exercise of rights attached to warrants held by them. These equity shares would be subject to a lock-in for a period of three years from the date of allotment of the warrants.
On 22 September 2008, Reliance Industries (RIL) said it had started production of crude oil at KG-D6 block of the Krishna Godavari basin. The field will initially produce about 5,000 barrels of crude per day and is expected to reach its peak production of 5,50,500 barrels of crude per day over the next six to eight quarters.
Reliance Industries' net profit rose 13.2% to Rs 4110 crore on a 40.8% rise in sales to Rs 41579 crore in Q1 June 2008 over Q1 June 2007.
Reliance Industries manufactures petrochemicals, synthetic fibers, fiber intermediates, textiles, blended yarn and polyester staple fiber. The company also owns a petroleum refinery cum petrochemicals complex in Jamnagar, India that produces a wide range of products such as gasoline, superior kerosene oil and liquified petroleum gas
If the move from 3199 to 3648 is iv th of 3rd wave, then we'll go down to a new low immediately..confirmation is a fall below 3320. But if the move is part of 4th wave, then we are in the "b"
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