The Indian market opened on higher note and managed to close in green zone. For coming session we can see some bounces if nifty trade above 2730 levels on the other side breaking below 2680 it can test 2630-2590 . Nifty is moving in range 2700-2900 levelsTrend in weekly, daily are firmly down.
In case of any continuation of rally in world markets, Nifty may break past 2730 to 2745/2768... Technically, it is poised for more downsides.
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India VIX - Volatility Index:-
The chart below shows the Nifty Volatility Index. It is to be read like an Oscillator with a range of 0 - 100. Unlike the other TA indicators, the interpretation is exactly opposite. More volatility happens in bear phase and less volatility in bull phase.The highest reading of 92.53 was followed by Nifty's bottom at 2503.The lowest reading of 32.71 on 7th January followed the top at 3147.
Some trendlines can be drawn and TA analysis with indicators can be developed. It is just an assisting tool.
There was very high volatality today but closing is not conclusive as Bears are not comfortable..??.
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NIFTY FUTURE
ABOVE 2725 TARGET 2746-2768-2789-2816
BELOW 2690 TARGET 2677-2651-2602-2550
Everybody was waiting for RELIANCE result, RIL declared far better result then market estimated. Now today’s session will be very volatile, safe traders dont trade without SL. Nifty is having two major supports 2652-2551. I advise sell at higher levels, dont create any long positions for coming days
MARKETCALLS - Intraday Stock Tips
Sell BPCL below 385 SL 397 Target 379-373Sell HEROHONDA below 844 SL 855 Target 839-835-830
Sell AKRUTI below 722 SL 740 Target 711-700
Sell LICHSG below 212 SL 228 Target 202-190
Sell NTPC below 178 SL 183 Target 176-174
Buy REILIANCE above 1143 SL 1109 Target 1162-1177
Buy BHARTIAIRTL above 620 SL 609 Target 627-637
Buy HDFCBANK above 920 SL 880 Target 938-958
· Cash & cash equivalent in hand Rs.28, 500crs ($5.9Billion), over 95% in bank.
· Jamnagar refinery 98% capacity utilization
Reliance continues to be amongst top 30 fastest climbers in the 2008 list of Global Fortune 500 companies, it is truly a rare feat in such recessionary times.
There were many rumors about hedging losses and Forex losses, but there is no such thing in the results going by the announcement. The company performance has been good and above market expectations.
Reliance Industries Ltd has informed BSE regarding a Media Release dated January 22, 2009 titled "Revenue and Earnings Growth in Challenging Times; RPL Refinery started on Schedule; KG D6 Oil Production Commenced in September 2008; KG D6 Gas Production Scheduled in This Quarter".
Reliance results will be out today and many reports talk about $1 bn loss on hedging of crude contracts. Given Reliance's track record, in any ten-year history they have grown by 20%. Acquisitions, stake sales have helped them grow in bad times too. Nobody knows what Reliance can deliver today; can there be some positive surprise? We will know only when results are out.Reliance: During the quarter ended December 2007, the company had reported a net profit of Rs 8,079 crore, which included Rs 4,733 crore of extraordinary profit on sale of stake in Reliance Petroleum.Reliance has delivered more than the street expected, the stock is near support of 1080 and as long as it is above that we can easily see 1400 and above levels being tested. Our Turn Date given is 23 Jan 2009 (+/- 1 or 2 days error), with Reliance surprising positively, will we turn up from here?
Sell RANBAXY TGT: 175,168 SL: 184
Sell DLF TGT: 155,149 SL: 162
Sell RELIANCE TGT: 1115, 1105 SL: 1128
Buy RELIANCE TGT: 1120, 1140 SL: 1098
Buy Niftyfutures TGT: 2715, 2730 SL: 2695
Sell Niftyfutures TGT: 2660, 2640 SL: 2690
Buy Niftyfutures TGT: 2645, 2660 SL: 2615
At this rate the month is going to go by with only confusion and confusing thoughts. Let us first see what we have in hand then we will try and find some solution to our problems around. Firstly, our reliance results are out. What played in my mind was that the results will be declared during the off trading hours and will never know what side the markets will swing. The results are not good but all the same they have beaten the market expectations. Couple this with Bharti that has managed to beat the expectations we have some hope for the coming days. So far so good… but in US the results declared by Microsoft has put everyone in renewed worry of recession. They now announce that 5000 jobs will be cut and the US markets are fast sinking to these results. Which lower low will they finally settle to – GOD only knows.
The Asia today traded in a fairly narrow zone around the flat line – but just before the ending there was some buying support and ended with some gains. Nikkei was up 1.9%, Hang Seng up just 0.59% and Strait Times up 0.25%. Europe traded most of the day in green but before closing could not hold on to the gains and slipped red. FTSE down 0.19%, Dax down 0.98% and CAC down 1.24%. Less we talk about US the better – Obama effect is nowhere to be seen. Nasdaq has slipped down 4.09%, S&P down 3.28% and DOW down 3.14%. I only hope that they do not close at these levels. GOD bless America. Yahoo is saying that some John Thain has left Bank of America – I really do not know him but all the same yahoo is splashing this as their headlines so I thought would be important enough.
On the charts it is a copy book – perfect Doji. Had it been there after a trend – whether up or down it would have been a strong signal of a reversal – but in these times of confusion I think it too signifies just that – CONFUSION. No one really knows which side the markets will finally go. The markets are going near the bottom of the Bollinger bands and the bands too are expanding with the narrowest being on 7th Jan. 5 EMA is below the 20 EMA and 20 EMA is below 50 EMA. There is no future in seeing these lines. The volumes were a tad higher – but that is it. ADX is bearish, MACD divergence has increased a bit – Bad. RSI still bad and TRIX is looking down and Slow Stochastic is nowhere – still to go oversold. So the path is clear for a drop – by another 200 odd points? but then in this business – there is no clear cut directions.
Let us see how today panned out to be!
The Pivot for the day was at 2727 and that was voilated on the downside early in the trade and thereafter the markets took this as the resistance and these levels were never crossed really. On the lower side the Support 1 was at 2668 and the markets never went down enough to see those levels.
For tomorrow let us see the Pivot levels…
R3 2807 against 2884 yesterday
R2 2775
R1 2744
Pivot 2712 against 2727 yesterday
S1 2681
S2 2649
S3 2618 against 2571 yesterday
Projected High Range 2728 to 2760
Projected Low Range 2728 to 2696
Fib Projected High 2761
Fib Projected Low 2663
Picking a stock at reasonable price is a complex phenomenon. First, you should have an idea about overall economic environment. Then you need to have an idea about different sectors and their prospects. Then you need to have an idea about different Companies (good and bad) and its valuations. I recommend 2 years of hard work in gaining knowledge and to get an idea about shares before making entry into stock markets. Go slow in the initial days and do virtual investments and learn lessons. Don’t get overconfident from initial successes. Initial success will trap you to make big mistakes.
I learnt a lot from business newspapers and magazines. I am indebted to every business media publication. I read a lot and analyse all the data and come to a conclusion. I am indebted to every journalist who gave me so much information about Companies and economy through their research articles.
Ex. I still remember Business World article on BPO opportunities in 2000 and an article on Pantaloon in 2002. When Kim of LG said that LG will become number one consumer electronics Company, I shocked about his overconfidence and arrogance (BPL is number one in those days). Rest is history. You can learn so many such things about Companies, business, vision, failures and turnaround etc. By reading newspapers and magazines.
As long as you invest just basing on tips without knowledge, no one will save you. There are no simple tricks to pick stocks at reasonable prices.
What are the required qualities for an investor?
You need to have 3 qualities to pick a stock at reasonable price and exit at reasonable price.
1. Knowledge: There is no alternative to hard work in acquiring knowledge. You need to keep update with past and present to have complete idea about the company. Please read financial news papers and Business news magazines regularly. Great investors like Irving Kahn and legendary managers like Jack Welch of GE gave similar advicev for young investors and managers. They will give confidence to take your own decision. Otherwise, you blindly follow brokers and analysts.
2. Psychology: Stock market investors need different mindset. If your friends labelled you as a “different man/woman”, your chances of success are high in stock investments than those routine people. Only those people who go against the herd will make money in stocks except in rare mad bull runs (2005-2008).
Ex. Recently when Sensex was around 10,000, I wrote that Stock markets included all the positives like rate cuts etc. This is against the popular perception of "markets included all the negatives like bad results". I made this announcement just basing on my research data and gut feeling. At that time, I watched TV channels without sound as I fed up with their comments like markets are safe and included all the negatives etc. When you fail to understand market moments, just stay from stock investments. I have not written anything in November-December, 2007 when I failed to understand the logic behind Sensex move to above 20,000 levels.
3. Guts: 10-20% annual returns are normal in other investments. But in stocks, you lose or gain that money in one session. Those who can’t bear all these shocks should not look at stocks as investments.
I don’t believe in: (Many people may not agree with me)
1. I don’t believe in these resistances and supports and other non-sense. In my opinion, they are meant for day traders but not for serious investors. My opinion is economic fundamentals determine stock prices except in cases of rumors and scams. I finally come to a price basing on stock history, future growth opportunities, economic situation and different news and their impact on the stock.
2. I don’t believe in particular type of investment like short term or value investment etc. We should utilise all types of investments. I believe in both value and growth stocks, I believe in long and short term investments. An investor should recognise his risk profile, knowledge and make investments accordingly.
3. I don’t believe in good or bad stocks. Price alone determines a stock quality. Take ICICI Bank. My target is 300-320. At that rate, it is a good stock but at 500, it is a bad stock. This price will change according to news, RBI decisions and overall economic situation.
4. I don’t believe in blind long term investments. I believe in ruthless and practical investments. When the stock crosses our target price, we should exit without giving much importance to its further rise. Enter and exit prices are the most crucial numbers in the stock markets. Greed and fear spoil your returns.
5. I don’t believe in stock tips. I try to read and listen as much as possible. I read almost everything without any bias but I don’t listen to those who appears daily on TV Channels and gave advice without any deep knowledge. But I listen to real experts like Samir Arora, Rakesh Jhunjhunwala, Shankar Sharma and some foreign people etc. I will compare my opinions with them and come to final concusion. I learnt a lot from Shankar Sharma in 2008 but I learnt a lot about weaknesses in Rakesh strategy.
6. I don’t believe in brokers. Most of these brokers make money just because of weaknesses in regulations. Every promoter cannot become Dhirubhai Ambani to take on these foolish people. They are making stock markets into gambling centres. They play on retial investors who ask them for advice to make easy money in stocks. Everyone made money in the last Bull Run. In reality, one needs to work very hard to make any money in stock markets.
7. I don’t believe in entry price. Exit price is most crucial than entry price. You may commit a mistake with entry price but not with exit price. Many investors increase losses or decrease profits due to greed and fear. Ex. I committed a mistake by investing in Commodities in mid-2008 but exited with small losses when I understood my mistake. Our egos generally spoil our investments. It is very difficult to accept our failures.
8. I don’t believe in day trading except in rare confirmed wonderful opportunities like Satyam scam news etc. It is better to play in Casinos in stead of doing day trading.
9. I don’t believe in investing in defensive stocks like HUL, Cipla and ITC etc. I will keep money in Banks in stead of keeping money in these stocks. When market condition improves, MFs and HNIs will move money from these stocks to growth stocks.
10. I don’t believe in regular clichés. In my opinion, timing is crucial. Many readers asked me for good stock recommendations when Sensex was around 10,000. Why should we waste money when we have clear idea about downside?
Ex. Rakesh Jhunjhunwala always says that India growth story will continue and Sensex will touch 30,000 in 3-4 years. If it happens, his money will double. In the mean time, another great investor (Nirmal Kotecha who exited most of his stocks at right time will make 4-5 times more money. I believe in Nirmal Kotecha investment style. Don’t be sentimental with your stocks. When you think that things are going bad, just exit the Company without hesitation.
Important advice:
If you can accept failures, control your egos, work hard – you will definitely make money over long term. Never invest in speculative stocks like Satyam irrespective of returns. Take an oath. Stick to strict investment principles in which you are strong. Warren buffet believed in value while Peter Lynch in value. No one is wrong – that is their strength.
These musings are based on my experience but not an arrogant opinions. Learning about stock market investments is a slow and prolonged process. Legendary investors like Buffett made massive losses in the initial days. Be prepare for that. This article is not meant for gamblers like current Satyam investors.
Just valuations and earnings will not give you clear idea about a stock. Past history, future growth, management ability, subsidiaries, FIIs and sector etc will also play role in determining a price for any stock. Stock price is a dynamic one and change according to new happenings.
Ex. Reliance Industries announced 55% fall in net profit. Big negative news. Reliance Industries announced good results (if you exclude other income). Everything is important.
Note: Congrats to "Slumdog Millionaire" team and A.R.Rahman for 10 Oscar nominations.
2640 - THE ULTIMATE SUPP could be tested today, and if we dont break 2640, i will try intraday longs with the same SL.
another good trade would be buy crossing 2690 for definate 25-30 points profits.
yesterday(22nd) i booked out of shorts, and will open next round of positional shorts only if we break 2640 levels.till then will try some contarian INTRADAY longs.
not breaking 2640 in the next 2 sessions may pull up nifty towards 2820 as well, and thats another level where positional shorts may be tried.
one thing to note is.. i am not stressing on shorts for today, after a gap down, it will not be safe to short.
so 2640 & 2690 will be the key for today's intra trades.
BUY NF ABOVE 2730 SL 2650 TARGET 2777/2840
SELL NF BELOW 2730 SL 2777 TARGET 2650/2550
STOCKS GAME-
BUY RELIANCE ABOVE 1140 SL 1100 TARGET 1180/1220
BUY BHARTIARTL ABOVE 620 SL 605 TARGET 635/650
BUY CAIRNS ABOVE 155 SL 150 TARGET 160/165
BUY DIVISLAB ABOVE 985 SL 955 TARGET 1015/1045
BUY EDUCOMP ABOVE 1800 SL 1750 TARGET 1850/1900
BUY GDL ABOVE 74 SL 71 TARGET 77/80
BUY IDEA ABOVE 42 SL 40 TARGET 44/46
BUY OFSS ABOVE 450 SL 440 TARGET 460/470
SELL IOC BELOW 430 SL 440 TARGET 420/410
SELL BALARAMCHINI BELOW 50 SL 55 TARGET 45/40
SELL JPHYDRO BELOW 30 SL 32 TARGET 28/26
SELL M & M BELOW 286 SL 296 TARGET 276/266
SELL MARUTI BELOW 515 SL 530 TARGET 500/485
SELL RECLTD BELOW 75 SL 78 TARGET 73/70
SELL RENUKA BELOW 65 SL 70 TARGET 60/55
Yet another day of no major move on the index but the broad market continued to remain under pressure. The down trend continues to remain with resistance for upmoves arnd 9100 and support at 8300-8500 in short term.
Stocks to watchout for :
Hindalco, Rcap gave trading opportunities. SAIL and Sesa stayed stagnant but still look weak.
Larsen n Toubro
The stock has come very close to the 660 zone and sustaining close below this level would mean a breakdown and could target 600-550 -450 also technically. would prefer to wait to see it over next few session for confirmatory moves.
Reliance Inds
I would focus on tech here as thats all i know :) ... Technically resistance on upmoves 1185 /1230/1285 and downside 1060/1020. This remains the range for the stock in short term.
Looks like this stock is all set to go lower and lower. The weekly line chart above shows that price has broken down a six year support level.
Zoom into a one year daily line chart (center) and a 3 month chart (below). Verdict? Short till you get tired! :p
It was a bad day as stocks with poor results got punished today. Sensex closed at 8803, up 24 points (provisional) and Nifty at 2708, up 2 points (provisional) from the previous close. CNX Midcap index was down 2.18% and BSE Smallcap index was down 2.05%. The market breadth was negative with advances at 304 against declines of 881 on the NSE
NIFTY (2713.8)
Resistance: 2745 / 2760 / 2780 / 2800-10 / 2840
Support : 2680 / 2655-45 / 2610 / 2545
SENSEX (8813.84) : Buying Expecting Once SENSEX Starts Trading Above 8920
Resistance : 8910-30 / 9045-80
Support : 8700 / 8615 / 8585
NIFTY FUTURE(2692)
Resistance : 2720 / 2750
Support : 2655 / 2630
Expect NIFTY To Act Like A Mad Monkey Within The Range Of 2627 To 2858.
A Breakout Is Expected Soon,But Direction Unknown.
Tgts : 2515 Or 2960
MKT COMMENTS
NIFTY FUT OI up (both series) with decreasing volumes indicating short covering in current series and fresh short positions in next series.
Pull back expected, but short term trend still down.
On Friday,Opening is Flat to Down,
Stay Short Below 2710,Sl Above 2730,Tgt 2680-2645-2620-2555-2515,
Sustain Above 2725,Buy with Sl Below 2705,Tgt 2745-2780-2815
TATA POWER (713) Sell Below 715,Sloss Above 725,Tgt 700/690
Sell WIPRO Below 215/210
Sell GAIL Below 205,Tgt 200-195-190,Sl 210
Sell ASIANPAINT Below 900,Tgt 885-860-855,Sl 910
Sell BIOCON Below 110,Tgt 108-105-100,Sl 115
Sell Dr.REDDY Below 430,Tgt 415-395-355,Sl 435
Sell IOB Below 63,Tgt 62-60-57,Sl 65
Buy GRASIM Above 1185,Tgt 1220-1250-1265,Sl 1175
Buy CANBK Above 205,Tgt 210-215-220,Sl 200
Buy 3I INFO Abv 31,Sl 29,Tgt 33/35/37
Buy KSOIL 41,Sl 39,Tgt 44/47/50
RIL might show some Good Upmove Initially,as Heavy Shorts were Built in anticipation of Bad Result,Huge Short Covering may come Above 1140/45.
CAIRN
Buy Above 157,Tgt 158/161,Sl 155
Sell Below 154,Sl 155,Tgt 152/149
CIPLA
Buy Above 174,Tgt 177/180,Sl 173
Sell Below 171,Tgt 169/166,Sl 173
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