NEWSLETTER

MY CHART

Nifty :: High wave body gap up bullish candle with volume. But as we say in last post facing strong resistance at higher level, correct once again sharply in final hour.. Still bearish Wolfe Wave and Ending Diagonal chart pattern valid even after breakout, be careful at higher level .. As far as Nifty stay above breakout level 4750 nothing to worry for bulls.. Our strategy for 11th Sep. up to 4750 buy in deep (S.L 4750) Sell at high (S.L 4912).. If Nifty open gap up avoid buy near highlighted resistance zone and change strategy sell at high (S.L 4912) buy in deep (S.L 4750) Resistance at 4832/4842/4885/4906/4912.. Supports at 4780/4760/4750/4733/4696..

(S S Cheema)

It has been almost a week of late night flying and there was no update on that account. A good upswing that has been there and the roles seems to have been reversed with the FIIs now convinced and buying and DIIs saying that this run up is false and selling. The same story all over again. (Reminds me of ‘Love Aaj Kal – Eko hai kahani – bas badle zamanna’). It seems that both the categories just cannot remain in sync with each other. Anyway there was a clean breakout a few days back and we are on our way up with a stop here and a stop there. Infact this is what that is happening now – with every few points of downward journey the markets has people buying into it and that is so far good and has supported the markets from a free fall. Let us see where we are off to now.

The global cues from the Europe seem to be mixed – FTSE closed 0.33% in red – and that is after seeing US recovering and coming off the days lows. DAX closed .37% in green – well it spent most of the time in green only visiting red only twice during the session. CAC was down 0.05% in red. Well the US too started the day in red but then steadily climbed to green – never to look back closing the session at the highest with DOW up 0.84%, Nasdaq up 1.15% and S&P 1.04%. The US seems to have officially called off the recession it seems and the markets ended with handsome gains in the fifth strait session. The Asia has not taken the US cues so far and Nikkei has plunged 0.5% – showing some signs of uptick now trading at 0.15 in red, Strait Times is in green by half a percentage points.

On the charts – as I see it there was a Gravestone Doji and that may show some selling pressure for a few days ahead of us. Since the FIIs have been net buyers the selling would have then come from the unconvinced DIIs and retail. The volumes have been 104% of last 50 day average so on that account cannot say that we have been overpowered. Second thing that I notice is that we have not been able to violate the upper Bollinger band – we should have been trailing by violating the upper Bollinger band if this upswing was to continue with steam. There is smart support around the 4 EMA levels and 4 EMA is at 4690 exact – so watch out for this level. If we do go below this level then the lower logical level should be middle of Bollinger bands around 4650 and the real bad downturn can come only below this level. One can never really say that this will come or not as there are reasons for strong supports along the way that I will cover as I complete this writeup. Needless so say that buy was generated on the 315 on Sep 4th. The trend line support is at 4660 levels. So that doubles the effectiveness of support available at around this level. ADX has finally started rising and is up to 16 as of today and I will still wait for the crossover of 20 to see the trend and crossover of 40 for the trend to strengthen up. MACD is bullish though mildly. RSI is bullish at 64 points and trailing above the SMA (15) at 59. If RSI is to fall below around the level of 58/59 - it could indicate weakness otherwise the party will continue. Another problem is the Slow Stochastic that are overbought and has had a bearish crossover of %K line below %D line. The TRIX too signals a rally up so far.

Now coming to a very interesting part – Options data. Since I had some time yesterday I took time to study it and what shows can scare away the living daylight of bears. The PCR is at 1.66 and if you think with this kind of open interest in Puts the operators will allow the markets will spiral down – just forget it. Short of some country Nuking the other I do not see a reason for the supports on the downside to be broken. I am pasting the Nifty open interest table sorted from high to low so you can have a look yourself. Only relief for the bears is that 4700 levels open interest is figuring at the fourth level and we may make an attempt to approach (I say again Approach it) but to violate it – just seems too far as of now. Levels of 4600 and 4500 are just too far and supports on account of options only too strong for a meaningful downside. On the upside the level of 4900 will be a stiff level to crack. So as far as the options data is concerned – we can be range bound between 4700 and 4900 levels.

I will summarise – as far as the global cues are concerned the US is doing great but it has failed to inspire the rest of the world in real terms. The downward infection now may travel from the rest of the world to US and we may see US sobering down at these or a little higher levels. The global cues for us remain mixed with a bit of weakness. The technicals are bullish but becoming stretched. Options should keep the markets range bound giving stiff resistance for the markets to break down meaningfully. So consolidation in this band might happen and levels will be broken on the upside or lower side next month. Ideal strategy might be to dilute longs at higher levels (talking of nifty positions) and buy on dips. For those holding longs do not hold if likely to close below 4791, for those who took shorts do not hold shorts if likely to close above 4852. For the day buy if above 4790 and sell below this level.

Best of luck and may all of you make money and tons of it.

Asian markets closed positive while European markets continued to trade on a subdued note. Our market had a disappointing close with some profit booking in late trade. Sensex shut shop at 16216, up 33 points and Nifty at 4819, up 5 points from the previous close. CNX Midcap index was up 0.04% and BSE Smallcap index was down 0.77%. The market breadth was negative with advances at 440 against declines of 819 on the BSE. Top Nifty gainers included Siemens, ICICI Bank and Sterlite while losers were Nalco, Hero Honda and Cairn.

The market did open positive to gap up and It was a slightly positive closing for the Indian market,which saw decent profit booking in the last an hour and market almost lost its days gain led by mostly heavy weights.Market as expected by me that we can see profit booking from higher side and once again nifty could not surpass the 4825 level on close to close basis.Market shown some kind of profit booking sign today and if today high made is not taken out then we can see this selling to continue tomorrow and next week too.But still we are having good supports near 4770-55 and if we are not going to break this level then another round of buying is there and we can see again upward continue.But still Investors and traders are required to take upmost caution near this range as any selling and bad news can help the market collapse very sharply.

NIFTY (4819.4)

Resistance : 4835 / 4870 / 4920

Support : 4780 / 4745 / 4690

SENSEX (16216)

Resistance : 16240 / 16380 / 16400 / 16540

Support : 16110 / 16005 / 15980

NIFTY FUT (4818)

Resistance : 4840 / 4880 / 4915

Support : 4785 / 4755 / 4700

MKT COMMENTS

NIFTY FUT OI up 4.85% with 52% increasing volumes indicating not only unwinding plus forming of fresh shorts too.

We expect NIFTY FUT to trade negative with volatility.

On Friday,Opening Is Flat To Down,

Buy NIFTY Above 4840,Sl Below 4820,Tgt 4870/4900/4925

Sell NIFTY Below 4820,Sl Above 4840,Tgt 4790/4760/4735

NEWS (Rumours)

CLSA : Active Seller In TECH MAHINDRA & AXISBNK

JPMORGAN : Active Seller In DLF & UNITECH

RELIANCE MF : Active Seller In STERLITE

BIRLA MF : Avtive Buyer In RNRL

CITIGROUP : Active Buyer In SESAGOA

BUY

JINDALSAW@ 680,Sl 665,Tgt 695/705

RNRL Above 90,Sl 87,Tgt 92/93/94/95

SIEMENS Above 535,Sl 520,Tgt 555/65/75+

CANARABNK Above 295,Sl 290,Tgt 300/305/310

SELL

SBIN (1882),Sl Above 1900,Tgt 1860/50

OPTOCIRCUITS Below 204,Sl 208,Tgt 200/196

FUTURES

Buy UNITDPHOS Above 171,Sl 169,Tgt 172/73.5/75.2/77/78.6+ [Lot Size : 1400]

Buy ICICIBNK (815.55)@ 810,Sl 795,Tgt 820/30+

Buy ONGC (1180)@ 1160/70,Sl 1150,Tgt 1180/90/95/1200 (Close Above 1190,Hold Longs As BTST

Sell BEML Below 1075,Sl 1090,Tgt 1070/65/60/55/50/45/40++ [Lot Size : 375]

Sell DLF (408.75) Below 420,Sl 425,Tgt 410/05/400/395

Doji

LITL Chart - Hourly:

Update on Bullish Gartley in LITL posted earlier, it gave a good break out in intraday, from the resistance. It retraced around 50% of the previous up move and today it blasted with good volumes.

LITL Chart - Daily:

LITL formed a candlestick shooting star in daily charts, and it closed below the resistance line. As I have booked all the profits in this early, depending up on its performance, I would like to re-enter into this if it gives any good opportunity.

DLF Chart - 15 min:

DLF formed a Bearish ABCD pattern and reached its target. Posting this for study purpose.

SCRIP = PATEL ENGINEERING Ltd. (NSE),

SCRIP CODE = PATELENG

PREVIOUS CLOSE = 469.65,

STOP LOSS = 459,

TARGET = 538.

THERE SEEMS TO BE A PROBLEM WITH THE SERVER. SO, PLEASE COPY AND PASTE THE FOLLOWING ADDRESS IN YOU BROWSER = http://stockfilterintraday.blog.co.in/

SORRY FOR THE TROUBLE……. THE SERVER WILL BE IN ORDER SOON.

CHART AS ON 10-9-2009,

WITH A CONSIDERABLE RISE IN VOLUMES, THE STOCK HAS GIVEN A FRESH BREAKOUT IN THE LAST TRADING SESSION. THE STOCK IS IN CONSOLIDATION SINCE AUGUST. BUT, IF A SIX MONTHS CHART IS CONSIDERED, THEN, TECHNICAL ANALYSIS INDICATES, THIS BREAKOUT IS AFTER A MUCH LONGER CONSOLIDATION. SO, IN A LONG TERM VIEW THIS STOCK RESETS ITS TARGET TO A MUCH HIGHER LEVEL.

THE TECHNICAL ANALYSIS INDICATORS AND OSCILLATORS SHOW A GOOD SIGNAL IN THIS COUNTER.

THE PORTFOLIO MANAGEMENT RULES AND RISK TO REWARD RATIO INDICATES THIS STOCK FOR A MEDIUM TERM RANGE.

STRICTLY FOLLOW THE STOP LOSS.

Escorts Ltd Breaks Out on Heavy Turnover

1. Escorts Ltd broke out of a Cup-with-Handle base pattern on last Friday and cleared its buy point of 80.0 on huge turnover
2. Just as you would like to see, the stock had formed a handle on very low volume; a positive sign that big investors were not selling the shares in the shakeout process
3. Only a minor position can still be opened at the stock is 10% above its buy point and could pull back.

Escorts Ltd - 09/09/2009

Scrip Code: 500495