NEWSLETTER

(NOORESH)

Sensex Technical View:

Nothings changed here...Sensex if stays above 15600 could target 16050 for near term. Allthough a move above should be seen with higher volumes and a larger magnitude else it would be a divergent signal.

Continue to be stock specific as the action has clearly shifted as i have been saying everyday.

Stocks to watchout for :

I-flex i.e OFSS has moved up sharply book at 1480-1550. PFC tgt 245 stop now 228.

RCOM buy with a stop of 275 tgt 295-320 in short term.

ROLTA

The stock may be headed to 190 in short to medium term. Only laggard in the IT space is all set to catch up !! ( disclosure : Already recommended to clients at 143 ! )

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MY CHART

Nifty :: Exactly match the path which we draw from last one week.. Made strong support at low and turns up sharply.. Day by day volume also increase and its support Inverted H&S pattern.. But still below neckline 4700, and up to neckline be cautious at every sharp up move. Avoid buying at high wait for breakout with strong volume as closing basis.. On 31st July closely watch strong resistance zone 4620 to 4638, and above it next strong resistance 4700...Now 4538 to 4504 zone works as strong support.. Our strategy for 31st July if Nifty open flat buy in deep (S.L 4504) Sell at high (S.L 4700) if open gap up sell at high (S.L 4700) buy in deep (S.L 4504)..Resistance for up move at 4592/4620/ 4631/4638/4700.. Supports at 4538/4528/4504/4474/4436…

(Inder Bhatia)

The Indian market opened on flat note on weak global cues and turned positive zone with volatile session and close with green zones. For coming trading session if nifty trade above 4580 levels it can test 4604-4621 zones .On the lower side trading below 4520it likely to test 4503-4469 zones .

S S Cheema)

We have ended the July expiry and will be ending the month too today and the undercurrent against a majority of expectations remains to be buyout and going forward leaving scores of bears on the wrong side. Yesterdays run up just short of the day end did more than just giving a white candle – it showed that the bulls still rule the roost so as to say. However if the FIIs and the DII activity data (provisional) is to be believed then one can see that the DIIs for the past few days are as convinced as many others that the time is ripe for a correction for whatever it is worth. With each passing day it has become more and more difficult to take positions as the trend has reached a time where it can break out either side – bullish or bearish – but in the same breath let me also add that there is nothing that indicates that the bullish run up is over so far. With the expiry behind us – the markets will take a stance that will show out in next few days. Once the trend is certain then we will take positions. But till then it is always good to see others – making money perhaps some time and loosing other times.

The Global cues are rocking to say the least. Asia yesterday was green with Nikkei 0.51%, Hang Seng up 0.49% and Strait Times up 1.23%. Europe opened flat to negative and then started climbing – never to look back. It finally ended at extremely good levels. The reasons were two fold. Firstly the results have been good there for past few days and secondly the US played its part. FTSE was up 1.85%, DAX up 1.71% and CAC was up 2.08%. US too opened green and then went on to touch the best levels for the year before sobering down a bit before closing. Green neverthless. Dow was up 0.92%, Nasdaq up 0.84% and S&P up 1.19%. The reason for this performance was better than expected earnings, lack of negative head lines. Ofcourse the Asia is likely to open green after all this. Nikkei has started the session 1.07% up.

The technicals that I follow are like this… Candle is white and the highest day before was 4574 and the highest yesterday was 4571. So practically the top has not been taken out. The body of the candle however engulfs the day before’s black candle and that by itself is bullish. We are still nowhere the top edge of the Bollinger bands and it may be a while reaching there if at all. 3 EMA is above the 15 EMA and ideally according to this would be to hold longs. The volumes were 97% of last 50 day average. Now here is a surprise. ADX line has gone down instead of going up. The +DI has also dropped down. ADX is bullish but loosing strength all the same. ADX is at 17 and that is extremely trendless. The MACD is bullish but the divergence has reduced a bit. RSI is bullish and rocking. Slow Stochastic shows overbought and bearish so that is the lone indicator that I follow generating a sell.

Here is the new months option data to start with. For the month of Aug the call build up of 4700 has the maximum open interest. (29.5 million), Then we have build up in 4000 puts, 4500 puts and 4400 puts (21.7, 20.9 and 18.9 million respectively) Finally we have an open interest of 18.7 million in 4500 call. Over all as seen from the put call ratio chart posted above the put build up is slightly more and that will in no way dictate the direction as of now. The levels to watch out for are 4700 and 4500 on the upside and the 4000, 4500 and 4400 on the downside. reliance – that is in a bearish trend on charts has extremely high call build up as seen in the chart and as far as ICICI bank is concerned the call put build up is almost the same with slight favour of calls.

So all in all we to summarise the Global cues are good and rocking. The candles showed a break in upswing might now resume the upswing and are bullish with exception of ADX (weak and trendless) and Stochastic (overbought and bearish) The option data is yet to build up to a level where there will be too much to read into it. Ideal strategy is to hold long with stoploss of 4475 and if short do not hold above above 4585 at closing.

Yesterday market will open huge downside and heavy volatile in maket's. And Second off the market will pickup it will trade and close the Nifty will 4570 levels. Today we expect market will open hugeup for 20 to 30 points and the nifty will trade above 4620 levels the nifty will another positive trend it will go uptrend for 4680 to 4720 levels. Suppose the nifty will trade 4550 to 4520 levels the nifty come small downside for 4480,4460,4445 to 4420 levels only . Today are coming monday nifty will tuch new high for 4720 levels. This day and coming week market will technically bullish trend only.

Nifty Spot

R-4545/4610/4650.
S-4505/4436/4396.

Nifty Fut

R-4545/4612/4645.
S-4513/4449/4415.

Sensex

R-15288/15510/15633.
S-15165/14943/14820.

Yesterday our sell call not active. But call four target achived. Today Nifty Buy abv 4545 SL 4515 tgt 4560,4570,4590,4620,4650,4680 to 4720. Nifty Sell below 4515 SL 4545 tgt 4500,4480,4460,4445 to 4420 levels.

Cummins India Ltd.
500480 CUMMINS Group (A)
CMP 273



The stock has broken its recent bearish trend with support at 261.
However it has a lot of resistance in the range of 275-290.
If it breaks 290 it could go to 325.

Half Hourly Chart

Daily Chart Showing Channel Target

Daily Chart

• Rangebound and volatile between 4500 and 4600 since last 5 trading days. I am not counting the lows till 4421 as they were swallowed without leaving much trace.
  
• Daily stochastics in sell , Macd in buy and above zero line and RSI14 turned up again and above 50 level. Intraday oscillators strong .
  
• Back above the downtrendline from January 2009 highs. If maintains above it then Nifty could target 5225.
• Moving averages on all time frames are bullishly aligned .
  
• Today was a bullish engulfing candle, which, though appears bullish could be a signal that the trend is about to end as the last of the herd may be buying from the smart traders who are selling. "A big bullish Engulfing pattern observed at the top of a trend usually represents the last gasp of the trend." Tomorrows action should confirm whether it is the last gasp or a fresh breath of air.

Tomorrow is a weekly as well as monthly closing which would help us get a broader view of the action of this month. All time frames are bullish now and i would remain long with a stop at 4380 on closing basis. Keep light till the 4600-4693 levels are taken out decisively.

MUNJAL SHOWA closed up 9.500 at 57.000. Volume was 1,281% above average (trending) and Bollinger Bands were 80% wider than normal.

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

• HERE
• We are only interested in a long position.
• The momentum is up.
• The upward momentum is accelerating.
• If not already long this is a good place to look for a valid signal to buy.

Bharat Mudgal’s comments:

HERE

MUNJAL SHOWA has gained strong upside momentum and is looking good on charts. Buy at current level and on any decline up to 46 with stoploss at 43.50 on a closing basis. Target 59.85 > 62.80 > 68

Nifty Chart - Daily:

Nifty formed an Inside bar with low volumes in daily charts yesterday, and closed at day's high. If high of 4571 is taken out today, then this 4571 level may act like good support. Nifty formed a tweezer top at 4608 levels which may give good resistance for today.

Nifty Chart - Hourly:

On the higher side Nifty may take resistance at 4608 levels, also the trend line joining the peaks of 12th June and 28th July which is at 4623 levels may give immediate resistance. If Nifty breaks above then it may reach up to 4680 levels. If 4700 is broken decisively then bulls may ride the market further up.

On the lower side yesterday's low of 4475 is important, If it is broken then we may see Nifty moving towards 4416 levels. If the support line at 4416 level is broken we may see bearishness in the market.

PS : Moving my Stop loss for 25% of my holdings to 4475 - filter from 4387 levels. If 4700 is taken out decisively then will add to my present holdings.

(ss)

Reliance is likely to find support around 1900~

(ss)

The 5 day ATR (green line above) has dropped to 99.92 the lowest since 11th May. A contraction in volatility is almost invariably followed by an expansion so we can expect a big move - probably upwards - in Nifty Futures.