NEWSLETTER

NOORESH)

Sensex Technical View :

Sensex as has been suggested before about the possibility of rising wedge breakdown to be possible in either case which is to stop at 16200-16800 or 17700. So lets see how it pans out.

Check this post to get good idea : http://nooreshtech.blogspot.com/2009/08/dowcrude-on-highs-can-sensex-do-same.html

For the short term supports are placed at 15300-15500. Continue to be stock specific as i still expect the moves from here on will be very selective.

Stocks to watchout for :

Unitech, Binani,IFCI,OCL , Power trading , Meghmani breakout in short term.Keep trailing stops. GMDC achieves target.

Uttam Steel heading for life high territory. Difficult to put an upside target.

Please keep trailing stoplosses /stoplosses for trades taken as well as book half or more on profits move of 15-20%. As will not be able to review all the stocks discussed.

HAT TRICK LAST WEEK :

Aptech , GMDC, Dalmia Cement shooted up 20% in the day after buy call ..... Cheers ... Clients have enjoyed if u would like to then check www.analyseindia.com for our services.

Large Cap Stocks ;

Many large cap stocks are close to breakout levels but need to be taken off with volumes to give a quick 5-8% move.

Reliance Inds needs to sustain above 2080

BHEL above 2380

HDFC above 2550

Asian Oil Fields

All the stocks in the exploration have seen a very quick upmove. Speculative buying interest can take this stock higher by 15-20% in quick time. take your own call.

Jyoti Structure looks good for a short term on sustaining above 149.

Kilburn Engineering looks interesting with some investor interest seen. Take your own call.

K S oils seems to be catching up with the midcap view. Buy with a stop of 3% .

(S S Cheema)

So another month passes by and as we look back – all said and done it has been a fairly good swing so far. Now all that remains is the last day to go by peacefully and that would be another achievement. The achievement may not be too much on the Nifty closing up this month – but the fact that the Nifty fell and recovered all the losses to close above in green on the monthly basis. Well there is today to be seen still. The FII and DII data as given by the SEBI is pasted above. On the weekly basis we are doing better than other markets. That by itself should be some consolation and an achievement. Before I move on to discuss other things some points that one can keep in mind before we end this month are:-

• PCR is generating bullish signs.
• India VIX has declined 524 basis points in last five days to close at 33.27% last week.
• FIIs seem to have become net buyers in out markets in the last five days. Though on monthly basis they have been net sellers.
• Crude prices seems to be hovering around the unchanged mark ending the week –1.15% at 72.49 $ a barrel.
• Inflation seems to be recovering and may come in positive soon. at the moment for the week ending 15 Aug it was at -0.95%.

As far as the Global cues on the last closing are concerned the Asia was all green except Hang Sang that closed 0.71% in red. Nikkei was in green up 0.57% and Strait Times was green 0.02%. Europe started the day green and ended green. FTSE was up 0.81%, DAX up 0.86% and CAC up 1.22%. US was confused at its best – oscillating between red and green to end mixed. Dow down 0.38%, Nasdaq up 0.05% and S&P down 0.20%. So like I said – confused. Bloomberg says that as per the consumer confidence, hosing data and Tech company earnings the recession is ending. Nikkei has opened in green and is up almost 1.77%.

Now as far as the candles on Nifty are concerned it was a white candle but it did not touch the upper Bollinger Band. On 315 – the 3 EMA continues to be above the 15 EMA and is a good sign. Volumes recovered a bit being 107% of last 50 Day average. RSI is rocking at 62.31 and the SMA (15) for RSI stands at 53.71. ADX still trails at 14. Slow Stochastic - %k and %D lines are almost overlapping and are in the overbought zone so some caution on that account is necessary. TRIX is looking up. MACD is bullish.

The options data as of now supports longs only with the put call ratio in nifty 1.45. The open interest is – 36.73 lac Put 4500, 31.83 lac at put 4300, 30.38 lacs in call 4900, 29 lacs in 4000 put, 5000 call and 4600 put. As per this we should now have a good run till about 4900 levels unless the Options data changes due to some reason drastically. Please take a look at the graphs also.

To summarise – Global cues are good to neutral. All the indicators baring Slow Stochastic and ADX are rocking. Slow Stochastic is overbought – but like I have said many times before it has a capacity to remain overbought and oversold for fairly long periods of time. ADX – yes it is an important indicator and till the time I see the markets in an upmove with ADX crossing 20 from below – I will keep saying that ideal strategy is that of cautious longs. All those who went long should trail stoploss on closing basis – do not hold longs if market closes below 4652, for those who are still bearish do not hold shorts if the markets close above 4716. For the day go long and remain long above 4684 and short below that level. Hope that this week too rocks. Only know that historically Sep and Oct are not too good a months for markets.

SENSEX (15922.34)

Resistance : 15975 / 16025 / 16090 / 16130

Support : 15880 / 15725 / 15665 / 15540

NIFTY (4732.35)

Resistance : 4745 / 4760 / 4775 / 4790

Support : 4705 / 4655 / 4630 / 4595 / 4535

NIFTY FUTURE (4737.8)

Resistance : 4780 / 4825

Support : 4705 / 4680 / 4605

If On Monday

- NIFTY Closes With Good Gains Or Around 4770, Start Lightening Your Positions By 20-25% Within Thursday, Would Get An Oppurtunity To Buy Again At A Much Cheaper Price.

- NIFTY Closes In Red,Start Buying Good Stocks With Very Good Fundamentals Till Thursday, Will See Good Returns Soon.

Buy NIFTY Above 4750,Sl 4735,Tgt 4770/95/4835/75

Sell NIFTY Below 4720,Sl 4735,Tgt 4705/4670/10/4585

POSITIONAL

Heavy Risk Traders

Buy NIFTY Only Around 4710,Sl 4670,Tgt 4750/75/4800/25/50

BUY NIFTY 4700Ce & SELL NIFTY 5000Ce For High Returns In Short Term

ANULABS Around 11-12,Sl 9,Tgt 15/18/20+

COUNTRYCLUB Around 18/20,Sl 15,Tgt 23/25/28/30+

MKT COMMENTS

NIFTY FUT OI up 5.65% with increasing volumes indicating forming of long positions.

We expect NIFTY FUT to trade positive with volatility.

BUY

WELSPUNGUJ Above 250,Sl 240,Tgt 275/85/95

ONGC Above 1190,Sl 1170,Tgt 1210/30/50

SBI, Sl 1755,Tgt 1795/1805

RELIANCE, Sl 2040,Tgt 2080/95

FUTURES

BHARTI (434.8) : Buy@ 430,Sl 420,Tgt 440/45 (Close Above 440,Positional Traders Go For BTST)

ONGC (1179) : Buy@ 1175,Sl 1165,Tgt 1190/95/1200/1205

BHEL (2330) : Sell@ 2360/65,Sl 2380,Tgt 2330/20/10/05

NCDEX (Positional) : Sell TURMERIC@ 7900/8100,Sl 8200,Tgt 7600/400/200/6900/700/500

The debate is on whether Nifty has conclusively broken out above 4700 or not. There are many ifs and buts - monsoon worries, valuation etc - but i guess one factor that has kept the market in check - has gone unnoticed i.e. technical setup of three key stocks.

There are 3 stocks in Nifty that constitute of Nifty (based on weightages); and are struggling around certain levels because of fundamental issues. These 3 stocks are - i. Reliance; ii. Bharti; and iii. ICICI Bank

It is because of this reason that i am calling these 3 stocks as make or break stock.

Reliance

The company is locked in a bitter dispute with ADAG group; and it is weighing on the stock. Every time the stock climbs to 2080-2100 - it is challenged with strong selling pressure. But if stock on Monday morning starts trading above 2100 - one can be highly convinced of the breakout.

Source: ChartAlert [www.chartalert.com]

Pressure point = 2080-2100.

Bharti

Bharti-MTN deal has been a big drag for stock price performance. Just have a look below how stock tanked from 500 to 380 on the news. Stock has been big underperformer in last 3 months.

But things are changing now and new pressure point = 435-440 has emerged. On Friday, it was one of the buzzing stock and closed just near the resistance point. It is a stock to watch for on Monday. If it starts conclusively trading above 440 - one can derive great comfort on Nifty breakout.

Source: ChartAlert [www.chartalert.com]

Pressure point = 435-440.

ICICI Bank

ICICI Bank has been a neither here nor there stock in last 3 months. It gapped up post election results but it did nothing after that. Everytime - the stock reaches 800 - it retraces but everytime - there is dip - stock pulls back also. So, the stock has been completely rangebound. Another issue - sectorally, banks are under pressure. ICICI Bank needs to breakout above 800 to lift sentiment; and create more +ve energy for breakout.

Source: ChartAlert [www.chartalert.com]

The big question -

• What if Reliance-ADAG group kiss and make up?
• What if Bharti-MTN deal is construed differently?
• What if ICICI Bank decides to list all its subsidiary?

Well, then its all blue sky and market can see sustainable upside. But forget fundamentals - purely as price watcher - these are the three stocks one should keep an eye on because just by pure mathematics - they can lift or dump the Nifty.