Sensex :: Very difficult to forecast future market in such kind of extended corrective up move.. Its advisable to avoid long term view and play in short term /midterm for maximum gain.. We already give sell signal exactly at top with Single Top formation for short term in last week.. And both indices correct sharply from top .. Now what to do after decline..
Today we post intraday and daily chart of Sensex..
In intraday Sensex break Head and Shoulder neckline with 5th Failure Terminal given bearish signal (Nifty still above neckline of H&S) but in Daily chart it’s still above strong support b-f line mark as pink color. May be short term intraday up move is there so be careful in fresh shorting at low .. Now those who short for short term revise stop loss of shorting at 16790 for intraday and for short term 16840 or maximum 17120..
In daily Sensex chart represent mid term bias.. Extend corrective move running like Bow Tai Diametric Formation .. Extended last g leg of Diametric may be finish at our Single top in last week If any up move is still pending now onwards e-g line works as strong resistance in coming day’s.. For mid term investor buying stop loss intact at 16485 as closing basis and in Nifty 4900 as closing basis..
Our strategy for 12th Oct.. If Sensex hold 16582 and in Nifty 4916 then buy in deep (S.L 4900/16485) Sell at high ..
If Nifty break 4900 and Sensex break 16485 then exit in all long position and hold short for coming week..
Today we post intraday and daily chart of Sensex..
In intraday Sensex break Head and Shoulder neckline with 5th Failure Terminal given bearish signal (Nifty still above neckline of H&S) but in Daily chart it’s still above strong support b-f line mark as pink color. May be short term intraday up move is there so be careful in fresh shorting at low .. Now those who short for short term revise stop loss of shorting at 16790 for intraday and for short term 16840 or maximum 17120..
In daily Sensex chart represent mid term bias.. Extend corrective move running like Bow Tai Diametric Formation .. Extended last g leg of Diametric may be finish at our Single top in last week If any up move is still pending now onwards e-g line works as strong resistance in coming day’s.. For mid term investor buying stop loss intact at 16485 as closing basis and in Nifty 4900 as closing basis..
Our strategy for 12th Oct.. If Sensex hold 16582 and in Nifty 4916 then buy in deep (S.L 4900/16485) Sell at high ..
If Nifty break 4900 and Sensex break 16485 then exit in all long position and hold short for coming week..
Understanding Equity market is the most difficult thing as the world is a Global village and event happening in any corner of the world normally has impact on Equity market. Frost in Brazil will impact tea prices in India and tea stocks move up this was my 1st lesson in my M.B.A in 1991 and today Sugar and Tea stocks are proving that with SUGAR being @ 28years high. Investor should understand there are multi-factor impacting market but best Investment is made following “You try to be greedy when others are fearful and you try to be very fearful when others are greedy”- Warren Buffett
http://www.fao.org/docrep/004/w7174e/w7174e11.htm IMPACT OF EL NIÑO ON AGRICULTURE, FISHERIES AND FORESTRY
http://www.mydigitalfc.com/sectoral-watch/dip-production-kicks-storm-tea-cup-100# Tea production in the country has fallen sharply. So has the export volume. But domestic demand is still firm, leading to a rise in prices.
China Baosteel cuts Nov steel prices by 9-13% - Umetal
SHANGHAI (Reuters) - China's Baoshan Iron and Steel Co Ltd (Baosteel) has cut prices for its major steel products by 9-13 percent for November sales versus the October tag, industry consultancy Umetal said on Saturday.
Baosteel, the listed unit of China's largest steelmaker, would cut the price of its major hot-rolled steel coil by 400 yuan ($58.61) per tonne, while reducing its major cold-rolled coil price by 700 yuan per tonne, Umetal said.
Baosteel's price of the major hot-rolled steel coil would be 3,942 yuan a tonne for November, while the price of the company's major cold-rolled steel coil would be 4,676 yuan a tonne, according to Reuters' calculation.
(Reporting by Alfred Cang and Edmund Klamann)
Bharti stock now needs to be discussed in this context. The way stock has been dumped in last one week really raises lots of question on the industry itself. The big question everyone is asking - where stock can go next.
In this article, I am making an attempt to answer the above question technically. Let us look at Bharti chart for some answers.
Bharti Daily Chart
Source: ChartAlert [www.chartalert.com]
Event: Breakdown below key support level: Bharti has broken down below two important support levels -
What Next after relief rally to 370?
Best Case - In a strong market, even weak stocks hold up. [Remember, Glenmark stock - how badly it suffered in the month of August on core business issues but the strong market has helped the stock to retain its price level.]
Bharti after strong sell off may turn sideways between 320 and 370 for a good period of time now. But one thing is certain - the stock will not be able to make strong gains for good period of time. It may best remain sideways. The reason - there is no case for out performance; and stock when it gets liquidated in such a big way will always have a pressure of oversupply at higher levels.
Worst Case - If market starts correcting sharply from current levels, then the stock will find more pressure. Technically, the stock can slip to 270 - the support level during 2008. [see in the chart above]
Final View: Long term investors can look to accumulate the stock around support levels of 280. Bharti is one of the best managed companies in India and hence it will find buyers at lower levels because of cash flows, mouth watering valuation and superior management.
It’s not that everyone is bearish. UBS in its latest report view Bharti very positively; and has put price target of Rs. 480. I guess right now the issue is not where Bharti stock can go on the upside but which is the price level on downside that offers attractive margin of safety.
Right now - the level where Bharti looks attractive is around 280.
was a day trader's paradise this week at the bourses as the markets oscillated.
Key events were the dumping of Telecom Stocks, Infy results and Reliance bonus announcement of 1:1. Reliance came out with a bonus issue which surprised the markets but there was no reaction from the markets. An intra- day spike of 6 pc and thats it.
The markets typically hail a bonus issue which is nothing but a sentiment booster for the Retail. Eventually after a month or so after the bonus announcement you get the stock cheaper. An example of this was the Siemens stock last year.
Infosys as usual delivered a good set of number. Their Eps of Rs 100 for this year puts it at a P/E of 22. Not cheap for a stock where there is no growth year on year. The P/E to growth ratio the thumb rule is that it should 1.
Fair P/E for Infy I would put it in the range of 15-17 giving it a valuation of 1500 to 1700.
The most shocking was the dumping of the Telecom sector stocks following a price war announced by Reliance and TRAI declaring a discussion per second billing. Bharti lost almost 25 pc to end around Rs 343. The institutions follow a herd mentality in dumping stocks. I would accumulate Bharti for the simple reason it has 110 million subscribers out of 443 million in India. It has submarine cables and landing stations i key cities.
Bharti is an integrated telecom player and with 3 G, data communications would be another major play. Voice would be just 1 plain vanilla low end offering to entice the customer. The idea is to lock in a subscriber and use his mobile to be his gateway for payments, accessing the net and even his supermarket.
I would not be surprised if free voice calls upto a limit are offered if an user goes in for data solutions from a vendor.
The FII flows seem to be pausing, with the dollar weakening. A weak dollar means for fresh inflows, 1 dollar can buy less amount of stocks. Good news for existing investors as they can exit the Indian stocks with more dollars.
Nifty ended at 4945. It has a cluster of supports. It is at the trend-line joining lows since March 2009. 20 EMA is at 4935. If it breaks this next support comes around 4750.
Nothing is impossible but next week it seems it would be tough to touch 4750. My reasoning is simple. A truncated week with a holiday on Tuesday. Indiabulls Power IPO closing on Thursday means the market will remain shored up at least till Wednesday afternoon or even Thursday.
Look at the put-call spreads, 5000 is a key pivot. Almost same number of puts and calls have been written around this mark. So, its in the interest of the option writers that the markets revolves around 5000. Thats what has been happening last week, and option writers have been eating the premiums.
4800 and 4900 have huge OI in Puts ad would act as strong supports. They will not break easily. 5100 and 5200 calls have good OI build which would be resistance points.
Looks to be a range bound week.
Nifty from the daily charts, it’s clear unless it breaks the 4900 level – there is no risk for the longs. So, buy on dips with stop loss 4900 or use any bounce to short at higher levels round 5030 with stop loss 5062. Short term shorts should be imitated only below 4900 for target 4750.
Nifty daily chart
In this article, I am making an attempt to answer the above question technically. Let us look at Bharti chart for some answers.
Bharti Daily Chart
Source: ChartAlert [www.chartalert.com]
Event: Breakdown below key support level: Bharti has broken down below two important support levels -
- 200 dma: As you can see in the chart above, Bharti stock has slipped below 200 dma last week - technically very disturbing sign.
- Horizontal support line of 370: This was the level - Bharti chart was holding during the entire BHARTI-MTN deal. But post industry wide tariff war announced by RCOM, the stock has even broken this level.
What Next after relief rally to 370?
Best Case - In a strong market, even weak stocks hold up. [Remember, Glenmark stock - how badly it suffered in the month of August on core business issues but the strong market has helped the stock to retain its price level.]
Bharti after strong sell off may turn sideways between 320 and 370 for a good period of time now. But one thing is certain - the stock will not be able to make strong gains for good period of time. It may best remain sideways. The reason - there is no case for out performance; and stock when it gets liquidated in such a big way will always have a pressure of oversupply at higher levels.
Worst Case - If market starts correcting sharply from current levels, then the stock will find more pressure. Technically, the stock can slip to 270 - the support level during 2008. [see in the chart above]
Final View: Long term investors can look to accumulate the stock around support levels of 280. Bharti is one of the best managed companies in India and hence it will find buyers at lower levels because of cash flows, mouth watering valuation and superior management.
It’s not that everyone is bearish. UBS in its latest report view Bharti very positively; and has put price target of Rs. 480. I guess right now the issue is not where Bharti stock can go on the upside but which is the price level on downside that offers attractive margin of safety.
Right now - the level where Bharti looks attractive is around 280.
was a day trader's paradise this week at the bourses as the markets oscillated.
Key events were the dumping of Telecom Stocks, Infy results and Reliance bonus announcement of 1:1. Reliance came out with a bonus issue which surprised the markets but there was no reaction from the markets. An intra- day spike of 6 pc and thats it.
The markets typically hail a bonus issue which is nothing but a sentiment booster for the Retail. Eventually after a month or so after the bonus announcement you get the stock cheaper. An example of this was the Siemens stock last year.
Infosys as usual delivered a good set of number. Their Eps of Rs 100 for this year puts it at a P/E of 22. Not cheap for a stock where there is no growth year on year. The P/E to growth ratio the thumb rule is that it should 1.
Fair P/E for Infy I would put it in the range of 15-17 giving it a valuation of 1500 to 1700.
The most shocking was the dumping of the Telecom sector stocks following a price war announced by Reliance and TRAI declaring a discussion per second billing. Bharti lost almost 25 pc to end around Rs 343. The institutions follow a herd mentality in dumping stocks. I would accumulate Bharti for the simple reason it has 110 million subscribers out of 443 million in India. It has submarine cables and landing stations i key cities.
Bharti is an integrated telecom player and with 3 G, data communications would be another major play. Voice would be just 1 plain vanilla low end offering to entice the customer. The idea is to lock in a subscriber and use his mobile to be his gateway for payments, accessing the net and even his supermarket.
I would not be surprised if free voice calls upto a limit are offered if an user goes in for data solutions from a vendor.
The FII flows seem to be pausing, with the dollar weakening. A weak dollar means for fresh inflows, 1 dollar can buy less amount of stocks. Good news for existing investors as they can exit the Indian stocks with more dollars.
Nifty ended at 4945. It has a cluster of supports. It is at the trend-line joining lows since March 2009. 20 EMA is at 4935. If it breaks this next support comes around 4750.
Nothing is impossible but next week it seems it would be tough to touch 4750. My reasoning is simple. A truncated week with a holiday on Tuesday. Indiabulls Power IPO closing on Thursday means the market will remain shored up at least till Wednesday afternoon or even Thursday.
Look at the put-call spreads, 5000 is a key pivot. Almost same number of puts and calls have been written around this mark. So, its in the interest of the option writers that the markets revolves around 5000. Thats what has been happening last week, and option writers have been eating the premiums.
4800 and 4900 have huge OI in Puts ad would act as strong supports. They will not break easily. 5100 and 5200 calls have good OI build which would be resistance points.
Looks to be a range bound week.
Nifty ended this week with -2.72% compared to previous week closing with high volume and increase in open interest. MACD and RSI – indicating negative divergence for past few months. Now the crucial levels for this week are,
Support 4900 – 4865 – 4830 – 4795 .
Resistance 4991 – 5062 - 5134 – 5206.
Nifty daily chart
5 DEMA - 4988 20 DEMA - 4935
50 DEMA - 4756
50 DEMA - 4756
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