NEWSLETTER

(NOORESH)

I like to simplicize a lot of stuff but will get into some jargon and technicals today at the same time try to clear the technicals involved.

The same analysts who were calling for 11500 or 3400 Nifty are back with targets of 18000 and 5500 Nifty !! ............ All this based on a possible inverted head and shoulders ... first it was normal Head and Shoulders.....

Had discussed about this patterns soon being discussed around 2 weeks back on 20th July -

http://nooreshtech.blogspot.com/2009/07/what-do-you-wanna-see-see-what-market.html

Now lets get back to current view :

The three major considerations technically now are :

1) Bullish Flag

2) Inverted Head and Shoulders

3) Fibonacci retracement /momentum line and divergences.

Lets get into details now

1) Bullish Flag

The size of the flag : 1100-1600 points approx.

Breakout point : 14800

Possible targets: 15900-16400

On this basis we are almost closing on to the target zones if we notch up some more gains in coming sessions.

Had discussed about this flag and a re-test of its breakout but i had my doubts. CLICK HERE to check chart

2) Inverted Head and Shoulders

Right shoulder: 3000 points

Left Shoulder ; 2000 points approx.

Head size :8000 points

Possible targets : 17500-18000 and i wont take Head size here !!

The major issue out here is the shoulders are not symmetrical. Volume pattern doesnt indicate a build up which can give the market enough strength for a major move. Also even if it moves up sharply a re-test of breakout levels would be the next thing to watchout for.

Now why do i not take head size as the size is too huge for comfort. Faced similar concerns with a possible HNS on Sensex which had a head of 8k points also in many specific stocks head size was huge to give a target of sub zero also.

Ideally one would expect shoulder size to be reached which could be 17500-18000 but only a decent volume built up can confirm this pattern Else it wouldnt be worth looking into it... Still have my reservations for this pattern !!

3) Fibonacci Retracement / Momentum Line/Divergences

For the fibonacci retracement levels i have been consistently mentioningabout 16k ( 61% ) levels ever since 10k

CLICK HERE FOR LINK

The Fibonacci retracement of 61.8% comes to approx 16050-16196. This becomes an important level.

Momentum line is highly ascending which comes to 16.8k levels for the week and will keep sloping higher which clearly indicates no matter how high index goes from here its no more the super momentum !!

Early signals of negative divergences seen on many Indicators but they can continue to keep doing so for a long time. Though this is always a good caution sign.

Conclusion:

Quite a lot of things point to 16050-16500 levels as a very stiff resistance !!. So for the near term the best strategy should be to trade for extreme short term in specific stocks but mind you the leverage/volumes should not be increased !!

Investment buying should be very selective in midcaps/small caps which have not moved up but the index stocks look top heavy when we get closer to 16k.

Trading opportunities are abundant but one has to follow strict stoplosses and keep your risk in control . Why am i cautious - simple reason is we have accumulated lots of gains in the last few months and capital preservation is equally important !!

Cash is also a trading position !!

Will review whenever we get to the zone of 16050-16500. For now go with the flow but dont over-leverage/margin !! and be strict with discipline in trading.

We had alerted about increasing cash at 15500 Dot on -- CLICk HERe FOR LINK . So yet again would suggest to keep caution once we go towards 16k and be ready to review strategy again.

GANN FANN chart for Sensex drawn between the OCT 2001 Low(2600) and Jan 2008 High(21,000).

Check out the Support levels. And How Sensex Behaved near the Gann Supports.

Its worth to take a look at the picture.(Just click on the picture to Zoom)

MY CHART

Nifty :: Sensex already given breakout of Inverted H&S pattern and Nifty made an belt hold line body gap up bullish candle.. Still required breakout of bullish Inverted Head and shoulder pattern and close above it with volume.. Once Nifty break this neckline and cross 4788 (61% of entire fall) with volume then next Y of C leg up move target set in between 5100 to 6100.. Till then wait, and watch 61% of Sensex 16045 and in Nifty 4788.. Volume is most important factor in corrective up move bullish pattern.. If volume didn’t give support then again we see huge correction from higher level.. And that’s why be cautious at higher level.. Avoid buy at high and give long commitment only after conformation..
For 3rd August our strategy up to 4700 sell at high (S.L 4788) buy in deep (S.L 4546).. Momentum is up so cover your short fast and use strictly stop loss in shorting.. Resistance for up move at 4668/4700/4737/4747/4758/4788.. Supports at 4580/4570/4546..

MY CHART

Click on chart for enlarge it
80% Chance for 1st possibility
20% chance for 2nd possibility

Inder Bhatia)

BUY SONATA AROUND 33-31.50 TGT 40>42 STOPLOSS 29.50
BUY ONGC AROUND 1151 TGT 1176>1190 STOPLOSS 1128

Last week sensex gains 1.9% and nifty spurt by 1.5% respectively, and market saw better than expected results from corporate .As moving head nifty had reach near the point of resistances along with negative divergences on both daily and weekly chart as shown on chart. If nifty trade above 4693 we can test 4738-4808 zones .On the other side closing below 4526 levels we can test lower levels 4423-4312 zones .

The Indian market opened on gap up on strong global cues and saw profit booking at higher level but saw smart pullback at afternoon session and close with green zones. For coming session if nifty trade above 4653 zones it likely to test 4683-4723 zones .On the other side trading below 4550 we can see sell off and nifty can test 4430-4320 levels .For long move stoploss towards 4550 zone from 4239 zones.

BUYHDFC BANK ABOVE 1503 TGT 1540>1561 STOPLOSS 1490



BrameshHindalco Industries After a good upmove on friday which was accompanied by Vols PAR is still giving Buy signals.

As per trend Lines 104-106 is a zone of uncertainty once that is crossed with vols accept a very good upmove in with a tgt of 108 112 115 sl of 98 should be maintained on all longs.

Should be kept on Radar a Good Buy at dips
















Ashok Leyland has formed a rounded bottom and has formed multiple tops around 38 Levels

Move on Friday was accompanied by good vols

Now if the stock crosses 38 Level with vols go long with a tgt of 42 and 44
















(Govindakrishna)

On Friday,Hindalco broke out of the Rs.91.8-Rs.95.65 range that it was trading in during the early part of the week.The break out came with higher volumes,which augurs well for the upmove to continue. Technical indicators like the 13 day and 50 day simple moving averages are also giving a positive picture as the stock trades above both these averages.



I would recommend buying the stock on dips between Rs.98 and Rs.100 with a stop loss at Rs.95.2 and expect it to test its current 2009 highs of Rs.107.

(Govindakrishna)

We are now in zone with resistance at 4669 and 4693.
Once that is crossed we can easily sail through 4700,4724 4750.
Supports are emerging at 4575,4546 and 4468 on the downside.



The weekly chart shows a Inverse H&S(head and shoulders)formation with a neckline placed at 4700 levels.A point to be noted is that sensex which hit its new 52 Week high closed above its neckline resistance but Nifty is still uncertain.

Now a bullish and bearish view :

If 4700 is crossed what can we expect?
Unless Nifty consolidates briefly or is stuck,we could see 4730,4824 and 4979 in the near future.

If there is a fall what can we expect?
If we fall we may see 4575-4546-4468 from current levels.

Results seasons is over and so global cues and domestic news hold the key.There could be lot of domestic cues in the month ahead.

SantyAs described earlier, nifty broke the pink support line and met target at 4480. After 29th July (Wednesday), it found nice support from 4480 and traded higher touching high at 4660. As you can see nearest strong resistance is seen at 4710/30 zone, it would be a good idea to wait and watch how nifty reacts at this level. If however, tomorrow some profit taking is seen in early hours then it would be a good idea for short SELL (watch lower highs and lower lows pattern) at 4620 with stop loss 4680 for target at 4490/70. If no proper patterns found, then wait for confirmation to BUY/SELL during next coming sessions.

(SVShah)

The great Indian media battle has begun. The Raghav Bahl promoted TV18 Group that was expected to be Indian “ Dow Jones” has silently started giving space to the old behemoth Bennett Coleman and Co. With the advent of ET Now the prime space occupied by CNBC TV18 since a decade will have a serious challenger with deep pockets? The way Bennett Coleman & co. operates with its synergy and back end integrated process it will soon wipe out competition. Moreover Business channel is no more a cash-generating cow. Instead it has turned out to be a Glam model with inherent weakness unless cost structures are low. It’s high time that investors who have long been a “CNBC TV18“ loyalist turn cautious.

Even after two successive QIP and sale of non-core assets, Unitech has not been able to come out of deteriorating demand in real estate segment. When one looks at the cash flow statement of Dlf the outlook seems evenly worse. Company has a cash flow from net profits of 479 crs vs 5200 crs. Depreciation has reduced from 279 crs to 73 odd crs in a matter of one year. The only saving grace was inflow of 2450 odd crs from DAL. It seems that it was urgent for the company to reduce its unsecured loan by the same amount. Company had a decrease in cash balance of 449 crs for the quarter. Yes the stock price of almost all real estate companies can move up from here but the move will be technical in nature. Most of these companies are now being stripped of assets that could have helped them in eventual downturn. I personally believe that the mass housing projects with 20L tag price would turn out to be an illogical business proposition. Suddenly companies have started launching mass housing projects without understanding the depth of the model.

NIFTY (4635.45)

Resistance : 4670 / 4705 / 4740 / 4775

Suupport : 4580 / 4555 / 4520 / 4495 / 4435

SENSEX (15670.31)

Resistance : 15785 / 15900 / 16020 / 16125

Suupport : 15460 / 15350 / 15225 / 15065

NIFTY FUT (4636.05)

Resistance : 4650 / 4680 / 4730 / 4810

Suupport : 4605 / 4585 / 4535 / 4475 / 4405

On Monday,Opening Is Flat To Positive,

Buy NIFTY Above 4635,Sl Below 4620,Tgt 4665/80/4725/45

Sell NIFTY Below 4615,Sl Above 4630,Tgt 4585/55/35/05

BUY

VOLTAS Above 145,Sl 140

EDUCOMP Above 4050,Sl 4000,Tgt 4150/4200

NEYVELILIGNITE Above 140,Sl 135,Tgt 145/50

SBIN (1812),Sl Below 1790,Tgt 1830/45/60

GESHIPPING Above 245,Sl 235,Tgt 260/70/80+

NOIDA Above 35,Sl 30,Tgt 40/45/50 (Positional)

FUTURES

ICICI (759.05) : Buy Above 750,Sl 740,Tgt 765/70/75/80

INFY (2064) : Buy Around 2040/45,Sl 2015,Tgt 2075/85/95++

ONGC (1164) : Buy Above 1150,Sl 1130,Tgt 1180/90/1200/10

DENABANK : Buy Above 55,Sl 53.4,Tgt 57.4/58.5/59.1/59.8 [Lot Size : 5250]

JINDALSTEEL : Sell Below 2960,Sl 2990,Tgt 2940/25/10/2885/60/25++ [Lot Size : 160]

(ss)

My friend Abhijit had a query regarding the volume on Cadila. Abhijit, this is a thinly traded stock and as you can see from the above chart, the average 20 day volume (yellow line over volume ) is around 80,000. Notice the recent increase in volume. Besides, I'm a pure price player - if the price makes a new high, I will buy it regardless of the volume. BTW, the chart in the last post is a monthly chart.

Nifty Chart - Weekly:

On weekly charts Nifty formed a candlestick hanging man near the crucial resistance levels. If we carefully observe the last 3 candles, the body size of the candles is reducing gradually, giving a little hint that it may not move upside as easy as it moved initially, with out a small retracement.

Nifty Chart - Daily:

On daily charts Nifty has clearly formed trading range. Resistance of this range is at 4600 to 4700 levels and the support are at 4050 to 3900 levels. Break out or Break down from this range may give the mid term trend. But one must be careful with the terminal upthrust and the springs, with proper application of filters may avoid wrong trades.

Nifty Chart - Hourly:

On last Friday Nifty swung in wide range. It opened Gap up of 60 points, tested the resistance level of 4680 and came back to close the gap, but finally it moved up with out closing the gap.

On the higher side Nifty may take minor resistances from the pivot highs of 4670 - 4680 levels which it made on last Friday. Above which 4700 levels may act as good resistances.If a break out happens at 4700 levels with good volumes then the initial target may be 4900 levels.

On the lower side Nifty may take support from 4585 - 4570 levels. Below which it may move up to 4530 levels. Next support may come at 4475 levels.