NEWSLETTER

(NOORESH)

Sensex Technical View :

Lets have a few observations :

-- > The Head and Shoulders Pattern seems obvious but only issue is it can also see a test to neckline before achieving full tgts which point to 12k-12.7k. So next few sessions could be confusing with lot of volatility.

-- > Momentum line is broken so markets could well be set for a full retracement of the current move which comes to 13700/12700/11600 which are 23.6/38.2/50 % levels. The trend would not be smooth with relief rallies coming all through. Index could get ranged also.

-- > Short term support is now placed at 13500-13700 from where there could be some pullback rally possibility. Gap Support at 13500 and 23.6% at 13700.

-- > On the medium term as we had discussed before after a move to 14.5 k + ( mentioned at 9.5k-10k ) the index should get into a retracement of the entire leg. Ideally the retracement is generally in the range of 38/50% and an extra stretch may even go till 61% .

-- > Such a correction would be healthy consolidation and one wave of consolidation would be over. Sooner we do this better it is :)... Investors can again look to start pyramiding from 13.5k. Keeping in mind a possibility of 10700 also. So 13.5k/12.7k/11.6k would be levels to look for pyramiding. Simple pyramiding would be 100-200-300-500-800 and so on to accumulate.

-- > Traders can watch for relief rallies from 13500 to trade a bit here and there. A move below 13400 could lead to 12700 levels in extreme short term.

ABOVE ALL -- In FEBRUARY MARCH had mentioned about studying fundamentally sound stocks discussed a lot of them !! but did not get response and people were averse to taking investments and were left out. Yet again i believe July/August is yet a time to get back to some research and make strategies like pyramiding as per personal requirements.

Ever since 15.5k i kept on getting queries what to BUY etc etc ... I am tired saying WAIT so take your time lot many people might have actually bought more at 15.5k when i was suggesting generating cash and wait ! So be disciplined and now get back to work - Research and evaluate.

Stocks to watchout for :

Investment picks- But take only 25-40% exposure and keep positions open to add on further declines.

GTL Infra

One of my favorite stocks in the previous run which was recommended at 30 and went up to 100 + . Yet again around 32-28 partial exposure can be taken and keep position to add further. Short term bounce to 38 could also give trading gains.

ELECON ENGG

The stock could provide a good entry point at 60 and 50 to take 20% and another 20% exposure with long term view. The stock can go back to 90-100 levels in next 6mths to 1 yr. Fundamentally very well placed.

Please do your own research. Fundamentally sound stocks though further research should be done !

Charts for trading levels were posted yesterday.Take your own call on stocks discussed below. My strategy is still to wait and watch.

DLF has broken below 290 and could see some support around 270 levels.

Maruti is the only positive looking chart for now. Keeping a stop of 1050 one can buy for 1150-1200 also. Even Hero Honda looks positive

Ind Bull Realty has cracked and could now be headed to 175-179 last support below which it could even go to 150.

Lanco and IVRCL have maintained strength all through but could be ripe for correction. So watchout for long side traders.

MY CHART

Nifty :: And finally Nifty break H&S pattern and given close below it.. H&S pattern target near 3650 time wise target may be achievable within one month.. But first we look 3870 for mid term within 10 to 18 day’s.. In counter trend watch short term buying zone for pull beck up to H&S neckline in between 3983 to 3966 (just below 4000) .. May be pull beck start before this level and that’s why if Nifty open gap down avoid sell at low.. Our strategy if Nifty open flat sell at high near resistance (S.L 4173) buy on deep (S.L 3966).. If Nifty open gap down wait for support and buy on deep (S.L 3966) sell at high. Resistance for up move 4116/4140/4173/4200.. Supports at 4041/3983/3966/3931/3877/ 3870..

(Inder Bhatia)

The Indian market opened on gap-down on weak global cues and saw sharp sell at end of session close with red zone .Nifty close below 4140 it can test lower levels 3859-3800 zone .For coming session nifty trading below 4060 level it likely to test 4030-3990 zone .On the upside trading above 4108 it likely to test 4123-4154 zone .

(S S Cheema)

That there is a light at the end of the tunnel is a foregone conclusion really – but the question that one should ask is – how far is that light. Yes we may confidently talk about 5K on Nifty or probably 10 K in the coming time – but when is the big question. And if that part is not right then the entire exercise to profit from the stocks goes for a six. Why did we go up to the levels to where we were a few days back and why we are going down now is just not my prerogative. I have mentioned so many times that the markets are just not bothered about asking me as to where they are headed to so I will not question that – I will purely take some input from the technicals and as of now the technicals are fairly and squarely pointing downwards. The event that we had so many hopes on is now gone and we have to look elsewhere for the cues – and the Global cues are the nearest that we can now relate to. We have stood defiant in the past and decoupled but I feel the pulse is beating the other tune at the moment. The next event that I look forward too is the results that will start pouring out shortly but till the time that happens – we are here where the markets are taking us.

I will now present to you the Options data. Look at the optimism pouring out – there is a definite puts being written but nowhere the figures that are there for the calls. Look at IOC – you expect that with such calls being written and no puts at all – we will see IOC rise? please for heaven’s sake give me a break. The call writers have to be real dumbos to have done this and will butcher them (the call writers) so the markets as far as this data is concerned are just not going anywhere up as I am sure that the call writers are not Dumbos.

Moving on to the global cues. As far as Asia was concerned – we have seen the slaughtering carried forward. Europe was in red but just around the flat line but they could not sustain there – after the US opened and dropped – closing at the lowest levels for the day. FTSE was down 1.12%, DAX down 0.56% and CAC down 1.27%. US opened flat went green briefly before falling – trying to recover once again – fell then and closed flat. Dow up in green 0.18%, Nasdaq 0.06% and S&P down 0.17%. This should at least temporarily give some relief to us but my sense still is that the worst for this leg is not over. All the same Asia opening has brought some relief and is presently in green – Hang Seng up 0.41%, Strait Times up 1.49% and Nikkei down but probably on its way to recovery down 0.47%.

Coming to that Candle sticks. Two indicative things have happened – we are along the lower edge of the Bollinger bands and we have closed below the 50 EMA. I take this as a bearish signal that give a continuation to the other indication. It goes without saying that 3 EMA continues below the 15 EMA. ADX is bearish and the ADX line proper has started looking up and if it continues then it will definitely give strength to this down trend. THe ADX is at 15 and I am looking forward to this crossing 20 and then eventually 40 on our way down. MACD is bearish with the continued bearish divergence. RSI is bearish and still nowhere near being oversold. Slow Stochastics %K line is oversold but I believe and feel that the %D line would also join it there before recovery. TRIX still looks down and is bearish.

So here is the summary – Options data – bearish, Candles bearish and global cues neutral to bullish. My positional policy is to remain short and sell on rise. See the exercise that I had suggested day before. Hey and before you pounce on me at some later date – This is the suggested paper exercise…

Ser No	Stock/Index	Sold / bought at	last closing	Notional profit/loss	Stoploss	Remarks
1.	Nifty	- 50 (4185)	4079	+ 5,300/-	4286/4281	stoploss is at the 15 EMA line as of now, will keep changing on required basis.
2.	Reliance					waited too long to get good price

Yesterday market open gapdown moreover 50 to 80 points, andalso market heavey fall for 140 points in nifty after 1.45 pm nifty will recovery for 60 to 80 points. Andagain market will fall at nifty 90 to 110 points in closing. The closing of nifty 4078 levels. Today we expected market open small gapup for 20 to 40 points only. Andthen the nifty will trade above 4120 to 4150 level the market will postive for 4220 to 4320 levels. Today we expect deadcat bounce in market's the nifty will go 4150 to 4220 levels. Suppose the nifty will come downside break 4020 levels the market will heavy fall upto 3920 to 3780 levels. The nifty spot and fut Discount for 15 points.

Nifty Spot

R-4114/4167/4255.
S-4026/3973/3885.

Nifty Fut

R-4090/4123/4183.
S-4029/3995/3935.

Sensex

R-13837/13972/14175.
S-13634/13499/13296.

Yesterday our buy call not active. But sell call maximum all target's achived. Today Nifty Buy abv 4090 SL 4050 tgt 4120,4140,4150,4160,4180 to 4220 levels. Nifty sell below 4050 SL 4090 tgt 4030,4020,4000,3980,3960 to 3920 levels.

(*M J Akhtar*)

Santy

As described in the chart, we can see a Head & Shoulder pattern at the top, which indicates probable completion of up trend and starting of a new down trend. Market certainly has broken the neck line and closed at low. If tomorrow selling pressure continues after momentary retracement, then SELL ( with confirmation of price action, check for lower highs and lower lows pattern in small time frame) at 4110/20 area with stop loss at 4150 for target at 4050 and next target at 3985. However in the case of less buying/selling activities, try avoiding BUY/SELL until next signal.

Half Hourly Chart

Daily Futures Chart

Daily Chart

Yesterday's comment was,"Today's movement was in an equilateral triangle, and the coiling might end tomorrow giving us direction. The break should be in the downward direction but trading above 4223-4230 will give an upside breakout".

The Nifty resumed it's down move and broke all supports and is now on the brink of the free fall zone --- the non traded zone of post election gap opening. I have put up the nifty futures daily charts to show this as the gap up opening is not viewable on nifty charts. On sensex the level is at 13480. Advance Declines were highly in favour of declines. Volumes on today's fall was much higher than on yesterday's tepid rise.

Amongst the Daily oscillators, stochastics is in oversold zone and macd has moved below zero. Rsi 14 is yet to reach the oversold zone. The intraday oscillators are all attempting to move up from the oversold region. So the short term is getting oversold and one needs to be careful with shorts. Booking partial profits on shorts would be advisable as we could expect a pullback soon to correct the oversold condition. Rest of shorts can be carried with a stop loss of 4250 or 4480 depending on your risk taking capacity.

On Wednesday markets opened with huge gap down on the back of negative cues from global markets.

After a weak opening it turned volatile and choppy and hovered around 4100 mark, at some point of time it remained marginally up and at the other it slipped down marginally from that mark.

On the lack of any positive stimulus metal stocks experienced the beating while the cement stocks and FMCG stocks showed some strength during the days session.

Further the negative opening of the European markets turned down the sentiments.

The selling pressure also continued among the Realty, Capital Goods, Banking and Metal stocks.

Unless Nifty breaches 3967 in the down side one can be hopeful and remain long with strict stoploss.

Nifty finally closed at 4078.90 loosing 123 points or 2.93 % on negative side.

Trading Strategy for 9th July, 2009

Intraday Support for the market shall be 4033 & 3987.

While the market will experience resistance at 4124 & 4163.

Best Strategy shall be to:-

Buy above 4103 with Stop Loss of 4056 and

Sell below 4056 with Stop Loss of 4103.