NEWSLETTER

(NOORESH)

Sensex falls by 800-900 points - --

My speculation was tilting on positive side :) oops... But was not convinced enough ... So what does one do...

Simple - When confused -- Do Nothing !!! --- When in doubt stay out...

So last 1 week or so its been more relaxed with not much of updates and all chat etc answers are wait... Nothing forces us to trade every move but the lowest risk and confident move. Maybe would prefer to watch a little more :)

Now lets get back to technicals as i am not an economist to talk on the budget.

Sensex Technical View :

Sensex has broken below the short term trendline of 14550 which was a stoploss level for all short term speculative longs. Now the index might be in a possible Head and Shoulders pattern but would still wait for a few sessions below the neckline of 14200 to confirm.

We may also see a re-test of the neckline and a possible move about it also before confirming the pattern as the current drop is a knee jerk reaction so next few sessions would clear up the noise on charts.

13900-14200 is a band which if broken will lead to a more deeper correction to 13500/12700 or lower . Would pull a detailed view after 2-3 sessions till then strategy is to wait and watch.

Cash is also a trading position !!!

This is an important line which many traders love to forget and end up over trading/lose discipline. All our readers/clients had a great time from 9.5k to 15.5k with super trades and took a rightful position to increase cash at 15.5k.

Got in a lil at 14k-14.2k did get a decent bounce and back to square one. If still holding on stops would be 13.9k for fresh entries.

Sometimes doing Nothing is also good. We would be back in full force after a few sessions be it on either side up or down.

Stocks to watchout for :

Tata Steel 380-415 , DLF 305 -345 and many such ranges were discussed before. Now after a sharp move of 10-15% from our support levels many stocks are back to similar levels or just below it. So all we had was a full circle !! and back to nothing. Many HNS , trendline breakouts seen. So after 2-3 sessions of clarity or confirmatory selling days would give good trading opportunities on either side.

Discussed below are stocks with their supports and recent lows. The lows are equivalent to 14k Sensex and 4100 Nifty levels.

Major stocks and sustaining below these levels for 2-3 sessions would confirm trend change or selling pressure. Holding them could see a small bounce to the extent of 5-8 %. Decide ur trade accordingly.Rounded levels for guidance.

Bank Of India 14k/recent lows -- 309 cmp 327 todays low 315

Bank of Baroda 400 407 398

BHEL 2008 2100 2062

DLF 309 303 305

HDFC Bank 1350 1427 1400

HDFC 2215 2350 2307

ICICI Bank 675 678 665

Larsen and Toubro 1408 1467 1448

Reliance 1900 1893 1865

Reliance Infra 1098 1131 1108

So of the major stocks a large section of stocks are very close to 14k levels which gives a possibility of a small bounce even if they have to crack deeper. Stoplosses are difficult to place on short side unless there is more selling pressure built up and momentum fall.

Trading a bounce should be with a 3-4% stop below 14k lows. Shorts should be below 5% of lows or on rise of 8-10%. Just a rough technical indication rest traders can trust their instincts :)

Personal view is to wait on sidelines and yet again start researching on mid cap stocks. Look for pyramiding strategy but slow and little early this time !!

MY CHART

Nifty :: Exactly turn down as we mention in our 26^th Jun post.. Wipeout nine day’s up move in just one day.. Exactly close at strong support zone with Engulfing bear candle pattern during down trend and its give some hope for bulls..!! Still two more strong support at down side 4115/4092.. May be small bounce beck from lower level up to 4267/4320 and its give opportunity to short again.. Our strategy for 7^th July if Nifty hold support 4092 buy in deep (S.L 4092) Sell at high (S.L 4320).. Resistance for up move at 4218/4250/4267/4300/4320.. Supports at 4115/4092/3978/3929/3870..

(Sensex already break H&S pattern and now breakdown level 14266 works as strong resistance in up swing)

Inder Bhatia)

The Indian market opened on positive note ahead of union budget for current financial year but close in deep red zone . Nifty move around 4483 level and sharp u turn and close around 4156 levels near head and shoulder neckline .For coming session we can see some pullback around4265-4300 zone one can short at higher levels .If nifty trade below 4140 it will test 3850-3800 levels .

(S S Cheema)

It was a day I was waiting for – me alone ? No – I believe anyone who has invest a penny worth of money in the Indian markets would have had an ear towards the Budget. I will not go on to discuss whether the Budget was good, bad or ugly… I will not say so because I realised a long time back that the markets have a mind of their own and they never listen to me. It is just worthless to discuss why the markets did not do what we willed them to do – but on the other hand let us see why the markets did what they did and what should be our strategy going forward. I have passed through the stage when I used to fret and fret as to where I am going Will any strategy work at all? yes and may be. But now the mantra that I am following is two pronged – firstly follow the markets for whatever they are worth and secondly read technicals to enter and exit at the right times. Done correctly this and only this will matter and nothing more or nothing less is required to be successful in the markets. Okay – a word about the budget for whatever it is worth. The budget is fairly forward looking but where is lacked probably was that it was not industry oriented. At the cost of repetition – I am not ready to drag myself in the debate whether the budget was good or bad – that I will leave to the people who are ready to put on the glasses and read the fine print. I will try to gauge the budget at its face value and as the markets saw it. Markets did crack and we will see from the provisional FII data that they sold in hordes. Well we had our institutions buying but the bottom line is that they could not stand in front of the onslaught of the FIIs.

We will try to break the entire exercise to the small bits – chew it and come out with deductions for whatever they are worth. FIIs sold worth 1483 Cr and DIIs bought 815 Cr worth. There was an input earlier that FIIs are already sitting on 700 Cr worth of shorts… Well if that be so then we are in for trouble – What has been happening previously for the last couple of weeks or probably days that we were bullish of our markets and inspite of weak signals from the world over we stood defiant. All that was on the back of the presumption or the assumption that we will have a miracle budget and the hopes suddenly got shattered. Now just a matter of a few days and we will be back to normal – where the technicals will start to play a role in the markets and will not be governed by the mood swings. The markets have been bearish for quite some time as I have been pointing out and there is still some downside to all this.

Firstly the budget – though may have been overall an excellent one – the markets have not agreed. That being so – it is not going to change its mood over tomorrow – so forget it that we will recover from this down turn. Secondly the weak global cues will play havoc with the markets – since we have been standing defying them for some time now. Thirdly I would not doubt it that that the technicals have been weak for some time now. At some stage they would have again played a significant role and I think that the time has come. Fourthly and finally – there is no great shakes input that is coming over the next couple of weeks or probably months to now change the mood of the markets. That being so – then being positionally short may turn out to be the best thing. i forgot to add – remember the options that I last talked about – I am posting a couple of chart – the Put Call ratio – It seems that the whole world is with calls – I don’t think that the markets will go up even a wee bit over this expiry. The charts are at the end of this write up. I have pasted Put call ratio for reliance, ICICI Bank, NTPC, Infosys, IOC… Can you believe it there is only call writing that has happened and we closed our eye to all this – you want recovery in these circumstances? Forget it… I remember someone had asked when I had written about the options and talked about the extremes of public opinion and he said how the hell do we identify it? – well here read the charts and I think all will be clear to anyone who cares.

Talking about the global cues now – I wish there were some to take support from – Nikkei closed 1.38% in red, Hang Seng down 1.23% and Strait TImes down 1.46%. Europe was down – no guesses required – FTSE down 0.98%, DAX and CAC down 1.2% each. US attempted a recovery towards the end of a fairly bad day and was partly successful. Dow was up 0.53%, Nasdaq down 0.51% and S&P up 0.26%.

Talking about the technicals – we had a big black candle today. I believe that it will give direction to the markets as the 3 EMA has clearly broken below the 15 EMA and we are near to the bottom Bollinger bands from being in the middle. ADX is down in dumps – but mind you it still shows a range bound markets as the ADX is below 20 but bearish as –DI has crossed above the +DI. MACD is negative with the divergence increasing today. RSI has dropped below 50 in a single sweep and is now at 43. Bearish like in bearish. Slow Stochastic are bearish and the TRIX is looking down.

My guess about where we a re headed to? 3700 minimum – I may be wrong but I really do not think so. I will be updating this blog with a trial figure and see whether I am right or wrong. I will be taking up two positions – one in nifty and other in reliance, both shorts at the best levels today and then keep updating them so that we all can follow. So what I am recommending is naked shorts – in nifty and reliance.

Best of luck to everyone today.

07.07.2009

Yesterday market open gap up for 30 to 40 points and budget will start market will downside moreover 6 % for nifty and Sensex. The nifty will closing of 4166 and Sensex will closing 14043 levels. The market will alsecter's down for 5 to 10 % in market's. Today market will open huge gap for 20 to 40 points open. Andalso the nifty will cross 4260 to 4320 levels again the market will go further uptrend continued it. The nifty will cross above 4320 level the nifty will go 4340,4360,4380,4420 levels. This week the nifty important resistance for 4444 level cross the nifty will bullish for 4460,4480,4520 to 4620 levels. Suppose the nifty will break 4120 level the nifty it will come 4020 to 4000 levels. This 4020 level is good supporting in market's. But this levels when nifty will break 3920 to 3780 levels.

Nifty spot

R-4260/4386/4606.
S-4040/3914/3694.

Nifty Fut

R-4253/4384/4615.
S-4022/3891/3660.

Sensex

R-14367/14774/15506.
S-13635/13228/12496.

Yesterday our buy call five target's achived. And Sell call all target's achived. Today nifty buy above 4255 SL 4220 tgt 4270,4280,4290 to 4320 levels. Nifty sell below 4220 SL 4255 tgt 4200,4180,4165,4150,4130,4120 to 4080 levels.

(Ilango)

(Ilango)

Any more falls below 4310, will cause more falls...Next minor supports are @ 4285-4250--4200.
(This is the chart posted on Friday for a possible monday trading...)
And this is how it has fallen...4280 a minor support & 4365-4385 minor res..4250 will be crucial now

Half Hourly Chart

Daily Chart

Yesterday I wrote, Rising wedge formation--a bearish formation-- in the last 10 days of trade, with falling volumes which is characteristic of the pattern. The appearance of this formation reiterates the view that this is the forming of the right shoulder of the Head and Shoulders pattern.

The right shoulder has formed and threatens to break the neckline which is at 4170 tomorrow, as per the daily charts. On half hourly charts it has already broken the neckline though not decisively. The target is 3600.

The fall has been on high volumes and very poor advance decline figures. The earlier low of 4143 has been violated. So we may expect the fall to continue.

The remaining Positional Longs have been stopped out and further strategy would be to wait for a pullback to short the Nifty.

(ss)

Yesterday's 6% drop completes the right shoulder. If the neck line is broken further and then goes below the loweset low 4052 in this formation, the head and shoulders pattern will come into play with a target of 3500~ Thanks to yesterday's fall, the 5 day ATR has shot up to 180.

Indrodeep Banerjee

On Monday markets opened strong ahead of budget presentation. It easily moved to its first resistance level (First Target 4468) from our buy level of 4448 but failed to sustain its early gains and started slipping into the reds.

After slipping from our sell call level of 4399 it broke all its intraday technical support levels within no time and kept slipping continuously till the end of the days session but took its support at its short term technical support level of 4146 during the last hour of trading.

After a positive start to the market session, the domestic markets went off from its early highs and slipped into the negative territory after Finance Minister Pranab Mukherjee started presenting the Union Budget in the parliament today, as it failed to meet the investors expectations.

However markets lost all its luster and the investors may remain cautious for the entire week ahead. Markets can trade in range bound manner ahead if the short term technical support level of 4146 is not broken but this seems not very likely and negative trend can begin if it breaks the level 3967 this week.

Nifty finally closed at 4165.70 loosing 259 points or 5.84 % on negative side.

Trading Strategy for 7th July, 2009

Intraday Support for the market shall be 4108 & 4062.

While the market will experience resistance at 4214 & 4253.

Best Strategy shall be to:-

Buy above 4188 with Stop Loss of 4146 and

Sell below 4146 with Stop Loss of 4188.