Sensex Technical View :
Yes i am back with a detailed post !!!
Well whenever the index is uncomfortable i believe its better to just sit back and slow down on trades/volumes. Thats what has been the case for last few weeks.
1) RISING WEDGE :
The possible comparison of current wedge formation to the one in Jan was first put up in Aug 23 giving a possible target of 16500/17200/17700 which is almost done.
Although the pattern did look similar but no of days above the 16500 levels does make me believe the current wedge pattern may not yield results similar to Jan. As i had put up my reservations on the pattern couple of weeks back i ll take the liberty to cut it of !!! unless proved wrong with a major major crack in next 2 weeks.
Because a major rising wedge leads to a massacre which i dont see in next couple of weeks.
Current Rising triangle /Wedge /Trendline Breakdown:Simple pattern calculation suggests a possible target of 15550-15600.
Although there might be some interpretation which would give a range of 14200 or lower. But whatever be the targets they should be in very quick time to conform to the pattern
But important thing to note is technical analysis is not a strict science so we need to use a confluence of various observations to come to a conclusion.
If one sees the green band which was a major resistance 15500-16000 roughly. At this point there are many possible pattern implications which some would call inverted head and shoulders/ cup and handle but such confirmation can come if the index comes closer or just goes below the band to re-test the major breakout zone.
Conclusion ;
Short term trend may have turned negative and point to possible targets of 15900 or lower if index closes below 16450 for 2 days more.
On the medium term the major breakout zone/fibonacci retracements/wedge targets points to 15500 area to be very important. Also 15350/14684 are important bottoms in medium term which should ideally hold. Investors with a long term view can look for stock specific investments below 15900 till 15300 stop of 14700. Accumulation should be slow.
Once the testing is done we could expect a resumption of the major uptrend!
Stock specific View :
EIH Ltd :
Long term investors can look to accumulate the stock arnd 120-128 zone with a 1 yr tgt of 165-180. Fundamentally the tug of war between ITC and Analjit singh may lead to better price discovery. Technically good formation with medium term view.
Maruti :
Sustained move below 1450 could target 1300-1380 zones in short term. A move above 1550 gives a tgt of 1650-1700.
So wait for a move below either band for short term with a stoploss of 40 points.
High risk call Buy Punj Lloyd if dips to 178-190 stop of 175 tgt 220.
Reliance Inds
Major supports placed at 1950-1980 and 1880-1900. Buy closer to any range with 20 points stop for bounce back trades.
Nifty :: Last two candle made an Bearish Trending Candle Take Over pattern with Belt Hold Line bear candle.. After breakdown of strong support zone near 4900 Nifty turned down sharply and meet next strong support zone 4833/4866.. Volume is high in decline and faster retracement support our mid term top formation, now any up move gives us shorting opportunity at higher level.. After a sharper breakdown all short term indicator enter in oversold region. And that’s why be careful in shorting at lower level.. Below 4829 next strong support level at 4800/4789/4767.. Our strategy for 28th Oct up to 4767 buy in deep (S.L 4700) Sell at high (S.L 4959).. Resistance for up move at 4858/4890/ 4907/4959.. Supports at 4830/4800/4789/4767/4700..
Close : 4847
Supports : 4818 / 4797 / 4777
Resistances : 4888 / 4918 / 4949
A Sharp profit booking was seen in markets once Nifty broke 4950 levels with high volumes, a 100 to 125 points of Nifty sheded after these breakdown & managed to close at 4847.
Reality / Metals / Banking were the Top loosers among sectors. Yesterday RBI came out with Credit Policy & Repo Rate / Reverse Repo & CRR were unchanged while hiked SLR limit from 24% to 25%, the bankers welcomed the Credit policy but Bank Nifty was hammered from 9100 to 8700 & sheded only 400 points after the Credit Policy.
Nifty is currently testing 50 days DMA which is currently around 4830-4850 levels, this can act as mild support for the markets but the sentiments are -ve & markets may test lower supports as updated above. Also as updated earlier people & analyst were expecting the correction in markets & the same has happened. Nifty is down by 300-350 points from recent high & if sheds more 50-75 points then Nifty will complete correction by 10% in fast & furious way.
Provisional Fund Flow Figures Rupees Crores for 27 October 2009 :
Fii-549
Dii+142
Fii(deri)-1597
Idx Fut-1018
Idx Opt+189
Stk Fut-739
Stk Opt-26
Fii OI 76k.
About The Company
REI Agro is a basmati rice processing and marketing company. It has well known brands like Kasauti, Real Magic, Mr.Miller, Hungama, Ikon, Hansraj and Rain Drop brands of rice. Its current processing capacity is at 692,040 MTPA. It also has wind farm with a capacity of 46.1MW. And as had been the expectation in the market, the company has posted a set of good results.
REI is the one of the largest purchasers of Basmati paddy in India. Upfront payments and consistent purchase policies is why farmers have given the company a “preferred buyer status”. Over the years, it has established a strong network spread over 150 auction houses (mandis) in India.
About The Financial Results
The company has posted net sales for the quarter was up by a whopping 124% at Rs.969.79 crore. Rice contributed Rs.959.95 crore while wind farm contributed Rs.9.84 crore. EBIDTA was up 52% at Rs.164.43 crore and net profit surged by 170% at Rs.48.92 crore.
The absolute numbers are good but the margins indicate pressure, especially on the operating level. OPM was at 16.96% v/s 24.94% in Q2FY09. But there has been a marginal improvement in NPM at 5.04% as against 4.19%. Its interest outgo stands at a huge Rs.83.40 crore v/s Rs.74.38 crore in Q2FY09.
During the quarter, the company issued and allotted 2,99,45,550 shares of Re 1 each to Qualified Institutional Buyers (QIB´s) at the rate of Rs.61/share. As a consequence, the company raised Rs.176.68 crore net of issues related expenses, leading to an equity dilution to the tune of 9.5%. The company has a debt of around Rs. 2500 crore and the proceeds of the QIP were used to retire part of this debt.
The company had got approval to raise $150 million but it raised only $37 million but has lined up plans to raise more in Q3 and Q4. Infact it is planning to raise $100 million thro’ FCCBs and this issue has already opened and would close by this weekend. It is also planning to raise money thro’ rights issue to the tune of about Rs 1150 crore .
About The Stock
My personal opinion on this stock with regard to its’ price performance in short to long term on basis of Fundamental analysis , Technical analysis and exclusive multi bagger reliable news sources are exclusively reserved for the registered member with detailing of the same. Only registered member have right to email me mentioning the name and date of registration to ask for the same.
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