newsletter

(Nooresh Merani)

Sensex Technical View :

The up move with steep sloping support and resistance lines was meant to be broken on one side . In a simple manner it will seem that the breakdown has taken place today !! but the trendline slope is too steep to rely on for a decision.

The reason for the same can be seen from the earlier detailed powerpoint --- SENSEX THE NEXT BIG TRAPS ....

The near term support band is 16450-16650 which if broken on closing basis then only will we see a deeper correction or the index may go into a sideways consolidation for some sessions.

Another thing to note in bull / bear power is no of days to retrace last move. Every time the index touched the support line we did see a sharp reversal. The last upmove took 5-6 sessions from 16600-17500. So if we dont see a break below 16600 in next 3 sessions it would be a weak signal by bears.

In simple words watchout for 16450-16650 band. If it holds up over next week then it would be better avoiding shorts and going stock specific in a sideways consolidation on index.

MY CHART

Nifty :: Body gap down bear candle, third red candle in a row .. Break long term trend line from March bottom and break mid term rising veg lower trend line and move down sharply towards strong support 4950.. Now mid term momentum already damage but still required lower top lower bottom conformation in faster time.. Any up move gives shorting opportunity at higher level with S.L 5182… Our strategy for 23rd Oct. sell at high (S.L 5100) buy in deep (S.L 4900) .. Resistance for up move at 5011/5045/5060/ 5082/5100.. Supports at 4975/4955/4921/4900..

(In up move wait for strong resistance with conformation then short)

 

 (MURUGAVEL)

OPINION will follow within two days .....

 

The market did open flat to negative with seen selling pressure again from higher side and ended with negative closing on third consecutive day,market as expected again seen profit booking and exit from longs near 5055 and finally a round of selling seen in the last trading hours with nifty breached its trendline support breached and close below its short term support level of 5020.We expected selling from higher levels and it was mentioned so many times that market may if not hold the 5020 then we might see fresh selling pressure till 4945-25.Upper side it will face hurdles now at 5020-5045,while good support now comes near 4951 and breach and sustain below this mark nifty will slide to kiss 4880-4845 in the downside.Any rise will not sustain as long as we are holding below 5052.






NIFTY (4988.6)
Resistance : 5045 / 5105
Support : 4950 / 4910 / 4880


SENSEX (16789.74)
Resistance : 16975 / 17000 / 17160
Support : 16665 / 16600 / 16530 / 16430


NIFTY FUT (4997.4)
Resistance : 5035 / 5060 / 5085 / 5110
Support : 4970 / 4955 / 4920 / 4885 / 4830






On Friday,Opening Is Flat To Negative,
Buy NIFTY Above 5010,Sl Below 4990,Tgt 5030/5055/5080/5105
Sell NIFTY Below 4990,Sl Above 5010,Tgt 4970/4945/4920/4895






MKT COMMENTS
NIFTY FUT OI down 4.25% with 40% increasing volumes indicating unwinding of long positions plus rollover to next series.
We expect NIFTY FUT to trade volatile with possibility of bounce from lower levels.






Buy 5000Pe ,If NIFTY Trades Below 4970 (Sl Rs 30 On Price Of Put)




Sell GAIL Below 375,Sl 380
Sell BIOCON Below 270,Sl 275,Tgt 265/60


Sell SBIN (2325),Sl Abv 2340,Tgt 2300/2290

• UNITECH has been in news for many reason and now CBI filing charges on unknown DOT official for irregularities in the way 2G licenses to 9 new operator, UNITECH group sold 74% to Telenor for over Rs 6,100 crore making good profit.
• Unitech home buyers angry at stalled project, want monitoring agency was reported in Business Standard paper on Oct/09
• BNP Paribas in a report 29/Sep said, “Where's the construction?” If seeing is believing, we lack belief!

Bull market rally starts with Auto and ends with Realty and now most of the investor are holding realty sector I would advise take informed decision.

In many of my investor meet, seminar or interactive session I normally feel Realty is one sector liked by retail investor as they feel Land prices never falls and it is only one way that is up.  Sub-Prime in U.S was also cause of the same belief.     

CBI said it had registered a case on October 21 against “unknown” DoT officials and “unknown private persons and companies and others” under the Prevention of Corruption Act. The press release did not specify who made the complaints.

“It has been alleged that there had been serious irregularities in the award of Unified Access Services Licences to private companies. As per information received, there was criminal conspiracy between certain officials of DoT and private persons/companies and others in order to award licences to these companies by putting a cap on the number of applicants against recommendations of the Telecom Regulatory Authority of India and by awarding licences to private companies on first come first served basis on the rates of 2001 without any competitive bidding,” the CBI said in a statement.

Department of Telecommunications comes under CBI scanner, in response to complaints of irregularities in the way 2G (second-generation) licenses were awarded to nine new operators in 2008. Suspicions arose last year when two new players — Unitech Wireless Services and Swan Telecom — sold part of their stake in their companies at huge premiums within weeks of acquiring the licences. While Swan sold 45% stake to Etisalat for $900 million (Rs 4300 crore), Sanjay Chandra-promoted Unitech group sold 74% to Telenor for over Rs 6,100 crore. http://www.business-standard.com/india/news/dot-comes-under-cbi-scanner/374057/

http://www.business-standard.com/india/news/unitech-home-buyers-angry-at-stalled-project-want-monitoring-agency/372732/   Unitech home buyers angry at stalled project, want monitoring agency Irate buyers of homes from Unitech, the country’s second-largest real estate developer, today threatened legal action against the company for failure to complete construction within the promised schedule. Buyers of homes in the under-construction Unitech Habitat in Greater Noida have come together under the banner of the Unitech Habitat Owners Association. In a protest meeting today at the Unitech sales office in Gurgaon, they demanded refund of the money they’d paid, with 18 per cent interest.

BNP Paribas

Unitech: Where's the construction?

• Site visits to UT’s projects launched in 1H09 in Chennai, Kolkata, NCR (~80% of sales) indicate no construction activity.
• Incremental progress in old projects. Lack of const. activity raises concerns on fund use and receipts from sales.
• Investor sales increase cancellation risks. Reiterate REDUCE and TP of INR50 based on 1x book + INR10 for Telecom.

If seeing is believing, we lack belief!

8m sqft of sales and counting, but no construction!

We visited Unitech’s project sites in NCR, Chennai and Kolkata, which accounted for more than 80% of Unitech's 8m sqft of residential sales (~6.5m sqft on pro-rata basis) in the past 7 months. There was no sign of development activity on the new projects (see Appendix). Our channel checks with the company officials and brokers suggest more than 60% of sales are to investors who have paid a notional token amount of 5-10% of total cost as the booking amount. Unitech has raised approx INR1.5b through these sales bookings but we were surprised to see no construction progress even after 6-7 months of the launch of some of the projects. In comparison, HDIL has made visible progress in the construction of its newly launched residential projects in Mumbai, which provides more confidence on its sales. Developer cash flows are frontend loaded and lack of construction progress despite huge project launches raises concerns about diversion of funds to other projects and whether cash receipts for the stated bookings has been obtained.

CBI searches DoT office http://www.thehindubusinessline.com/2009/10/23/stories/2009102351970100.htm 

Among the lapses identified by the CVC are the non-transparent manner of spectrum allocation, the absence of competitive bidding, loopholes in tender documents that allegedly benefited some companies and the fact that the licences were issued in 2008 at a low price fixed in 2001.  http://economictimes.indiatimes.com/News/News-By-Industry/Telecom/CBI-zeroes-in-on-DoT-offices/articleshow/5151158.cms?curpg=2 The last time CBI raided DoT was in 1997 in a case that ultimately led to the conviction of then communications minister Sukh Ram and DDG (licence finance) Runu Ghosh. The scam involved DoT officials favouring a Hyderabad-based private firm that had provided substandard equipment, resulting in a loss of Rs1.6 crore to the government. A raid by CBI had found Rs3.6 crore in Sukh Ram’s house. http://www.livemint.com/2009/10/22234433/Telecom-dept-under-CBI-lens-ov.html?h=B

Source: Chartalert [www.chartalert.com]

What happened yesterday - i. Trend interruption; or ii. Breakdown?

• Trend Interruption: If this is trend interruption, Nifty may turn sideways with sluggish moves
• Breakdown: There is a trading rule which says: When a market breaks one moving average, then next moving average becomes the target. Is 50 dma the new target?

Market Observations

1. Underperforming: Nifty month to date is now down 1.8%; whereas DEFTY, Dollar denominated Nifty is up 0.9% month to date.
2. Bad News: Nifty has conclusively broken below 20 dma of 5040. The target now: 50 dma i.e. 4816
3. Overnight US market closed with +ve bias. Most of the indices were up about 1%.
4. Economic recovery is on: US Index of leading economic indicators continues to rise and is currently at its highest level since October 2007.
5. Today, Asian markets are trading with positive bias. SGX Nifty suggests opening at 5040….at 20 dma
6. Yesterday, Nifty declined 1.5% to close at 4988. The near term support for Nifty stands at 20 dma of 5040. Will it hold?
7. Surge in Volumes: The trading activity surged yesterday on aggressive profit booking. The F&O turnover was at Rs. 86000 crores as against Rs. 68000 crores on Wed
8. Cash market Liquidity: FIIs net sold Rs. 499 crores of stocks in cash market, whereas DIIs sold Rs. 18 crores worth of stocks in cash market yesterday.
9. FIIs activity in futures market: FIIs net sold Rs. 1125 crores worth of index futures and net sold 524 crores worth of stock futures.
10. Market Breadth: worsened yesterday on aggressive profit booking: only 251 stocks advanced against 994 declining stocks
11. Three Sectors that were under tremendous pressure yesterday - i. Banks; ii. Real Estate and iii. Capital Goods. [Profit booking]
12. As market corrected, money started moving in defensive sectors like IT and FMCG.
13. JP Associates: Profit booking or disappointing result? Yesterday, stock tanked more than 6%. Kotak has come out with reduce rating on the stock and new target price of 220 on the stock on disappointing construction revenues and weak cement margins.
14. Can Auto stocks run some more on the upside? Fundamentally, view is emerging the auto companies most profitable periods are behind them and growth will be more normal from now on. [Upside capped?]
15. Key Earnings report today: i. ITC; ii. IDFC; and iii. BHEL
16. Centrum broking has come out with buy rating on Everonn because of 2 reasons - i. strong growth momentum; and ii. attractive relative valuation. [Fundamentally, good stock to buy on pullback to 50 dma = 400]
17. Tinplate Company: There has been huge uptick in trading activity on the stock. FYI - Tinplate is a downstream steel product used in packaging food items [canned items].
18. Baltic Dry Index has recovered 38% in last one month. Keep an eye on Mercator Lines and GE Shipping stock.
19. Mcleod Russel at 50 dma: Will stock hold this level which it has not violated since March 2009? The 50 dma is 193. Yesterday, Capital International emerging market fund sold 600 000 shares of Mcleod.
20. Citigroup in its recent note has come out with 5.8% GDP growth in India for FY10. Reason: sluggish agri growth. Does it matter? GDP projection has also become a game.
21. Nifty now has two new faces - i. JP Associates; and ii. IDFC
22. Technical Observations are now only for members. To read, Technical observation, subscribe to member’s only section.
23. The market moves wherever it wants to go. It does not care about you or me. It does not play favorites. It does not discriminate. It does not intentionally harm any one individual. The market is always right
24. Don’t think about what the market’s going to do; you have absolutely no control over that. Think about what you’re going to do if it gets there.
25. Constant effort and frequent mistakes are the stepping stones to genius….Elbert Hubbard, American Writer

SCRIP = JAYSHREE TEA & INDUSTRIES LTD. (NSE),
SCRIP CODE = JAYSREETEA,
PREVIOUS CLOSE = 317.65,
STOP LOSS = 310,
TARGET = 354.
FOR INTRADAY MOVEMENT OF THE STOCKFILTER PLEASE Click Here!
(OR CLICK THE LINK ABOVE LIVE SENSEX WATCH.)

CHART AS ON 22-10-2009

WITH A CONSIDERABLE RISE IN VOLUMES, THE STOCK HAS GIVEN A FRESH BREAKOUT IN THE LAST TRADING SESSION. THE STOCK WAS IN CONSOLIDATION SINCE SEPTEMBER.

RSI AND MACD SHOW A POSITIVE CROSSOVER.

TECHNICAL ANALYSIS AND PORTFOLIO MANAGEMENT SUGGESTS THIS COUNTER GOOD FOR A SHORT TERM RANGE.

STRICTLY MAINTAIN AND FOLLOW THE STOP LOSS.

The market did open flat to negative with seen selling pressure
again from higher side and ended with negative closing on third
consecutive day,market as expected again seen profit booking and
exit from longs near 5055 and finally a round of selling seen in
the last trading hours with nifty breached its trendline support
breached and close below its short term support level of 5020.We
expected selling from higher levels and it was mentioned so many
times that market may if not hold the 5020 then we might see fresh
selling pressure till 4945-25.Upper side it will face hurdles now
at 5020-5045,while good support now comes near 4951 and breach
and sustain below this mark nifty will slide to kiss 4880-4845
in the downside.Any rise will not sustain as long as we are
holding below 5052.

TOMM NIFTY MAY SEE SHARP BOUNCE & MAY TRAD IN 4962-5077
RANGE,NEAR 4930 IS STRONG SUPPRT

NIFTY (4988.6)

Resistance : 5045 / 5105

Support : 4950 / 4910 / 4880


SENSEX (16789.74)

Resistance : 16975 / 17000 / 17160

Support : 16665 / 16600 / 16530 / 16430


NIFTY FUT (4997.4)

Resistance : 5035 / 5060 / 5085 / 5110

Support : 4970 / 4955 / 4920 / 4885 / 4830

On Friday,Opening Is Flat To Negative,

Buy NIFTY Above 5010,Sl Below 4990,Tgt 5030/5055/5080/5105

sell NIFTY Below 4990,Sl Above 5010,Tgt 4970/4945/4920/4895

MKT COMMENTS

NIFTY FUT OI down 4.25% with 40% increasing volumes indicating
unwinding of long positions plus rollover to next series.

We expect NIFTY FUT to trade volatile with possibility of bounce from lower levels.

Buy 5000Pe ,If NIFTY Trades Below 4970 (Sl Rs 30 On Price Of Put)


Sell GAIL Below 375,Sl 380

Sell BIOCON Below 270,Sl 275,Tgt 265/60


Sell SBIN (2325),Sl Abv 2340,Tgt 2300/2290

STOCKS TO WATCH:
BHARTI AIRTEL,
UNITECH,
AMBUJA CE,
J P ASS,
SUZLON,
CIPLA,
HDIL,
ABG SHIPYARD,
ERA INFRA,
VENUS REM,
GOLDSTONE TECH,
AFTEK,

+VE STOCKS FOR 23OCT
HDFCBANK
YESBANK
AJMERA
CAIRN
HLL
UBI

-VE STOCKS
ICICBANK
RAJESHEXPO
PUNJLOYD
RIL
SAIL