NEWSLETTER

NOORESH)

Sensex Technical View :

Knock ! Knock at 16k.

After a massive correction all through 2008 Sensex is back to 16k a level which was broken in May 2008. The fall below 16500-16000 opened the gates to the Bear market phase.

Do look into the video analysis posted that time --- CLICK HERE for YOUTUBE video.

So with lot many instances pointing towards a level of 16050-16500 to be a stiff resistance to watch in coming days. A move beyond 16500 also points to a possibility of 17700 in medium term.

But always the last leg of the upmoves are distributive in nature/lower volumes/ lower highs and the markets can keep meandering sideways for a more amount of time. Traders need to be cautious above 16500 and look for stock specific moves and be very strict with money management !!

The expectations are many analysts / funds will soon start re-rating stocks with higher targets with Fy 10-11-12 based valuations. If you are buying on such reports just do a search back !! and things will be more real.

Stocks to watchout for :

OFSS targets achieved,maintain bullish stance on RCOM , PFC and Rolta.Alstom if crosses 550 and stays.

AUTO ANCILLIARY STOCKS ROCKED !!!! --- yes last weekend had mentioned about them ... Everything from Bharat Forge to Munjal Auto to Amtek Auto to Bharat Seats have moved up 20-30% !!....... Technical Timing though we were only on one stock :)

CLICK HERE TO READ what was written...

Sterlite , Indian Bank and GPIL charts posted below.

Some possible short term ideas .... Take ur own call with mkt conditions

Kotak Mahindra Bank Buy if stays above 684 stop of 670 tgt 700 +.

Hind Zinc buy with a stop of 723 tgt 765-790 in 1 week. ( high risk traders only )

Day trade Buy RCOM above 295 stop of 288.5 tgt 305-310. SAIL buy above 180 stop of 177 tgt 186-189.

Momentum trades for quick players Unitech above 98 and Reliance Capital above 920

NOORESH)

MY CHART

Nifty :: And Finally Nifty and Sensex both above bullish Inverted H&S neckline strong resistance level.. Hold the day in range trading volume is quite low but in final hour near neckline breakout level volume increase and its give some hope for bulls.. Still overall daily volume is low , Nifty and Sensex both below 61% of entire fall retracement level .. Up to volume expansion and below 61% be careful at higher level.. Momentum is up that’s why our strategy for 4^th Aug up to 4664 buy in deep (S.L 4635) Sell at high (S.L 4816).. Resistance for up move at 4740/4779/4788/4816.. Supports at 4664/4647/4635/ 4588…

(Inder Bhatia)

The Indian market opened on flat note and consolidation in the first half and saw sharp breakout on the upside closing with handsome gains. For coming session 4744-479 zone to watch for profit booking zone .On the lower side 4660-4640 zone will act as support for the day .

(S S Cheema)

The markets are in a frenzy to touch new heights – the problem is that the volumes are not keeping up the convincing company. That may be kept aside as nothing really is mattering and the markets are on a self induced high. The pattern is being harmonically repeated everyday. The markets open flat – give a signal of selloff and the moment shorts are build up – they go higher to touch new heights. The volumes are not mattering as after a steep climb – the prices touch the stoploss triggers and the short covering push them a bit higher to safer limits. What I suppose is going to happen one of these days is that the markets will drop – there will be buying by retail and the markets will never recover – then it will never give chance to the retail to come out – let alone come out a bit bruised. Till then ride the upswing.

As far as the global news is concerned the markets are in a frenzy to reach higher tops. What I said above is not only true for us only but all over – all the markets are generally starting the day almost at the flat levels and then end up at the highest. Take Europe yesterday for example. FTSE started absolutely flat and so did DAX and CAC then went on to end at 1.61%, DAX up 1.78% and CAC 1.5% up. Ofcourse the Europe closing mirrors US but all the same… US had better than expected economic data and that helped S&P to cross and close above the 1000 mark at 1002.63. The us at the end was up – Dow up 1.25%, Nasdaq up 1.52% and S&P up 1.53%. Asia too has opened green with Nikkei trading at 1.02% green, Strait Times up 0.58%.

The technicals are rocking ofcourse. The candle was white and strong with a large white body. It has moved up to the upper Bollinger Band. The Bollinger band has expanded to 4800 levels and surprisingly the Bollinger band is expanding at a a rate higher than the white candles otherwise ideally the bands would have been trailing the upper edge already. All indicators as per the EMAs that I follow are bullish. The candle also was above the 12 Jun high. The only problem in this part as I see it is that the markets are going higher on low volumes and generally it is not a good trend and sell off can be sharp. All the same till the time the markets are going up – there is no questioning. This info should be used for trailing the stoplosses if you are long or remain hedged at this point to ensure that the profits are not eaten away. The ADX is bullish with the +DI above the –DI but again the second caution that we see here – the ADX has not changed a bit more than 17. This indicates no strength to the trend that is going on – ADX has been at this level on my software for past three days. On iCharts however the ADX is at 36 and above 40 will indicate a strong trend continuation. Take the ADX pick that you feel is right. MACD is bullish with increasing divergence. RSI is rocking at 66.79 and the 25 day SMA of RSI is at 53.8 – so a lot of bullishness with this indicator. TRIX is looking up. Slow Stochastic is bullish but overbought.

On the options front as we step higher the put build up is increasing. The ratio is 1.15. It may still not be enough to sway the markets but the fact remains that if is add up at this rate then the markets will again face a hurdle coming down. reliance on the other hand has the same kind of call build up that we saw last month and to buy reliance may turn out to be a trap – best would be to avoid.

To summarise – FIIs are out buying and DIIs at the best are confused. All technicals are bullish except volumes that are not justifying the upswing and the ADX. Only one indicator is overbought – but mind you it can remain so for a long periods of time. Options still might not be able to dictate the direction but will give some resistance to markets coming down. Ideal strategy is to hold long. Stoploss for longs is 4555. For those sticking with shorts stoploss is 4659. For intraday hold long above 4634 and short below 4634.

Indicator	Bullish	Bearish	Remarks
ADX	Bullish	-	Bullish with caution
MACD	Bullish	-
RSI	Bullish	-
TRIX	Bullish	-
Stochastic	Bullish	-	Overbought
Options	-	-	Index options build up mildly bullish
Global Cues	Bullish	-

(Govindakrishna)

Yesterday Cairn broke out of 230 levels.
The stock has several things going its way.
If it passes 250 it could easily head to 275.
Also if crude prices sustain above $70 it could go further up.

(ss)

We are continuing to see a contraction in volatility. During the June highs, the 20 day ATR was at 172 or 3.65% and currently it is at 119 or 2.52%. That is a drop of 45%. The lowest reading of the 20 day ATR this year was 85 or 3.35% in March. So expressed as a % of price, the volatility we are seeing now is even less than what we saw in March! As volatility is cyclical - periods of low volatility are followed by periods of high volatility and vice versa, we are likely to see an increase in volatility in the coming days.

(ss)

Biocon gains 10% and breaks out of a consolidation.

Nifty Intraday Chart - 5 mins:

Nifty formed an Ascending triangle with good harmonics as I have mentioned in yesterdays post. But it didn't give good breakout from the triangle with confirming volumes. Target for this triangle is 4756 levels.

Nifty Chart - Daily:

Nifty formed a Trading range from last 2 months, yesterday it broke out of the range, but the volumes and the spread of the bar are not convincing. Need to be cautious with taking up immediate long positions.

Nifty Chart - Hourly:

Nifty gave break out in the last hour of the trading section after good consolidation. On the higher side it may reach up to 4760 levels, as it is the target for the Ascending triangle. Above which 4800 - 4820 may act as next resistance. If 4820 is broken expecting 4900 levels in near future.

On the lower side it may take support from the 4710 levels as it was a good resistance previously. Below which 4680 - 4670 may give good support. Below which Nifty may drift down to 4610 levels.

SVShah)

It was an important day for the Indian market as the Nifty touched 4700 and closed above it for the first time since June 6, 2008. After a quiet opening, the market continued to rally, although briefly coming into the negative territory.

The market continues to test higher levels despite stretching valuations. Besides, the results are inline with the expectations and there aren’t any major triggers for the markets either in the coming period. The Sensex finally closed the day by a whooping 254 points or 1.62 per cent at 15924.23 points. What are keeping the sectors strong are auto, realty, metal, power and oil&gas, which are up by 4.60, 4.19, 3.41, 2.19 and 2.04 per cent respectively. Only consumer durables and FMCG are in red and are down by 0.80 and 0.71 per cent respectively. Besides, midcaps and smallcaps too are joining the party and are up by 2.36 and 1.74 per cent respectively.

The way the Sensex is moving up there is a possibility that it might cross 16000 level tomorrow, but we would still urge investors to look at the performance of their indivdual stocks and portfolio and keep booking profits.

NIFTY (4711.4)

Resistance : 4745 / 4765 / 4790

Support : 4690 / 4645 / 4580

SENSEX (15924.23)

Resistance : 16055 / 16190

Support : 15800 / 15700 / 15475

NIFTY FUT (4714)

Resistance : 4745 / 4770 / 4810 / 4845 / 4880

Support : 4680 / 4645 / 4615 / 4570 / 4520

MKT COMMENTS

NIFTY FUT OI up 2.50% with 21% decreasing volumes indicating forming of long positions.

We expect NIFTY FUT to trade positive.

On Tuesday,Opening Is Flat To Positive,

Buy NIFTY Above 4705,Sl Below 4685,Tgt 4730/4745/4570/4790/4815

Sell NIFTY Above 4680,Sl Above 4700,Tgt 4655/4640/4615/4595/4570

BUY (Positionally)

BIOCON Above 240,Sl 235,Tgt 250/60/70+

CUMMINS Around 300/305,Sl 290,Tgt 320/30/40/50+

MPHASIS Above 510,Sl 500,Tgt 540/50/60/70+

PATNI Above 380,Sl 365,Tgt 400/20/30+

BUY

SBIN (1847),Sl Below 1810,Tgt 1870/80/90

INDBNK above 145,Sl 140,Tgt 150/55/60

APIL Above 550,Sl 540

SAIL Above 180,Sl 175,Tgt 185/9

FUTURES

Buy ABB Above 725,Sl 715,Tgt 730/35/40/45/50/55/60/65/70/75/80/85/90 [Lot Size : 500]

Buy BHEL (2343) Above 2295,Sl 2270,Tgt 2330/45/55/70/90+

Sell BHARTI Below 415,Sl 425,Tgt 410/405/400/395/390/385/80/75 [Lot Size : 250]