I have just made a new video presentation with technical charts of Sensex from various angles and technical observations. One of the charts which i forgot to include is posted above ( cant speak alone for 20 mins again )
Conclusion :
Sensex has a strong band of support at 15500 which should hold up for the short term. Investors were advised to book profits and generate cash above 16500 and 17200 should now look to redeploy cash slowly below 15900 to 15500 zone. Only a close below 14700 would make us negate the bullish approach.
Upside resistances 16350 ( mentioned yest and Sensex top at 16360 ! ). 16250-16350 and 16600 are resistances for short term moves.
Stocks to watchout for :
Bank Of India - Buy on declines from 340-310 with a medium term view and tgt 380-400.
EIH Ltd buy around 122-110 or lower with a medium term target 140/165.
Nifty :: High Wave, Inverted Hammer near short term third target, with extreme oversold indicator, suggest short term bounce.. Positive eight to ten down bar structure give classic buy signal in deep.. Now be careful in shorting at lower level in intraday.. Short only at higher level near strong resistance zone above 4900 to 5000.. Till then our strategy for 3rd Nov. up to 4670, buy in deep (S.L 4670) Sell at high (S.L 4904).. Resistance for up move at 4810/4846/4881/4904.. Supports at 4700/4670/4636…
BULL'S EYE SENSEX OUTLOOK - END OCT 09
As indicated by us in our earlier analysis the index did correct but what appeared to be a mild correction initially turned into a strong correction last week helped by weak international cues and a long weekend ahead and bears had a field day after a long wait.
However, now the index is very close to a very strong support at 15,580 and is not likely to breach this level. And if the global cues are supportive then a short covering rally is on the card any time this week. For those who do not want to wait for the rally may enter longs now with a stop below 15,550, as the risk reward at this level seems very attractive.
THE WEEK THAT WAS:
The Sensex and Nifty are down 5.3% and 5.5% respectively. From the index pack, Suzlon, DLF, and Unitech are down 21%, 18.5%, and 16.5%, while Tata Motors and Ranbaxy are up 7.5% and 4.5%.
The CNX Midcap Index and BSE Smallcap Index are down 5.7% and 8% respectively. All BSE sectoral indices have ended the week in the red, with the BSE Metals Index seeing the highest decline of 10%.
There seems to be no respite for telecom stocks. They had got a drubbing for the past two weeks on fears that a tariff war could further erode margins. Today, dismal Q2 performance by Bharti and a delay in spectrum allocation seems to have further weighed on sentiment. Reliance Communications, Tata Communications, and Bharti are down 23.5%, 16.5%, and 11% respectively.
OBSERVATION :
1) Total OI of NIFTY FUT up 3.64%, NIFTY FUT down 5.99% last week. OI up despite expiry indicating strong rollover of shorts to new series. NIFTY FUT closed at 4 points discount from 11 points premium compare to NIFTY SPOT.
2) Out of NIFTY 50 STOCK FUTS, 05 STOCK FUTS closed positive, 40 STOCK FUTs closed negative and 05 STOCK FUTs close flat last week.
3) OI of current series NIFTY 4700 CE is up 4856% prices down 61% showing call writing. OI of current series NIFTY 4800 CE is up 2664% prices down 68% and NIFTY 4900 CE is up 1356% prices down 73% last week showing aggressive call writing. OI of NIFTY 4900 CE is 37.46 LK highest OI in CALLs.
4) OI of current series NIFTY 4600 PE is up 321% prices up 162% and NIFTY 4700 PE is up 147% prices up 167% last week showing put buying. OI of NIFTY 4600 PE is 34.53 LK highest OI in PUTs.
5) Total OI of NIFTY NOV series CALLs is up by 1.39 CR to 2.07 CR, NOV series PUTs is up by 92.66 LK to 1.97 CR. NIFTY NOV series PCR (OI) at 0.95. New series started with lower PCR (OI).
NIFTY (4711.7) : Important Supports@ 4590/4610 & Important Resistance@ 4930/4950
Resistance : 4770 / 4860 / 4950 / 5160
Support : 4640 / 4590 / 4455 / 4340
SENSEX (15896.28)
Resistance : 16070 / 16375 / 16680
Support : 15375 / 15150 / 14935
SECTOR WATCH : CAPITAL GOODS (EARLY SIGNS OF WEAKNESS )
ABB FUT : OI up 3.62% prices down 3.93% last week. Key Resistance@ 780/790/800 & Support@ 705/695/685.
BHEL FUT : OI down 10.14% prices down 7.16% last week. Key Resistance@ 2325/2350/2375 & Support@ 2150/2125
LT FUT : OI down 16.87% prices flat last week. Key Resistance@ 1635/1655/1675 & Support@ 1520/1500/1480
SIEMENS FUT : OI down 7.36% prices down 11.39% last week. Key Resistance@ 540/555/570 & Suppot@ 490/475/460
STOCK FUT TO WATCH NEXT WEEK : SAIL FUT ( BEARISH )
OI down 7.60% prices down 10.13% last week. OI down due to expiry. Key Resistance@ 175/180 & Support@ 160/155
BUY
ABAN Around 1175/1225,Sl 1050,Tgt 1375/1400/1425 [CMP : 1274.6]
FSL Around 33/34,Sl 30,Tgt 38/40/42 [CMP : 34.7]
HUL, Sl 275,Tgt 295/305
DRREDDY, Sl 955,Tgt 1100/1125/1150
ASHOKLEYLAND, Sl 42,Tgt 52/54/56
CONCLUSION :
All indications of BEARISHNESS. Strong rollover of shorts and fresh addition in new series. First time in current year, PCR (OI) below 1.00 levels at beginning of new series. Downtrend to continue.
NIFTY SPOT Supports@ 4610-20, 4560-70 levels, below 4550 levels, next TGT will be 4500 levels. NIFTY SPOT need to sustain above 4500 levels for bounce.
High possibility of bounce from below 4500 levels. Any bounce will face strong R above 4700 levels.
Selling will emerge on every rise. Sell on rise is best strategy now for trading.
Here is a study on the difference between price and 20 day average of Nifty stocks. Nifty is now below its 20 day average by 5.7%. The largest difference is in RCOM (below) where price is 25.9% below the average! On the lighter side, this process can go on for ever - prices can keep going down and the average will just follow the price! haha! But in reality, sooner or later, mean reversion does happen, so let's see how RCOM does in the next few weeks. (Note:- Mean reversion in stocks is not strong since the data (prices) are not normally distributed.)
Readings > Linear regression of time and price
Readings > Linear regression of time and price
For the last 2months I have been warning about market correction and many following me would have invested around 8000-10000 levels in Sensex and 16k was good return and right time to take profit and we have talked about Telecom, Realty, Ambani brothers stocks and these stock have corrected more than market. In SUNNEWS interview on 09/October/2009 30-40% correction was strongly said and duly posted in blog on that day.
Today in modern day investment, investors are more carried by daily stock movement, and want to buy as low as possible and sell @ possible highest price. Many tell me I am always few months in advance in my prediction maybe they are right, “But when I asked to book profit there were buyers to all the stock, now where is the buyer?”. Investor Greed & Fear have always given way to euphoria and panic and before my Graph can suggest market is going to correct, my interaction with investors has given me advance signals.
When many investors who have not seen Graph tell me about Support & Resistance then Mr.Market has become maniac. Many times people are worried about I being right or wrong this time, which I think is never important, Think about your hard earned money and the risk you have taken. If I go wrong it will be talked out of 10 times he was wrong first time.
Common mistake investor make when we say correction many book profit and stay out and any 10-15% correction they feel the stock are sector has become very attractive and they start to buy, check how many investor hold Telecom stock, UNITECH, SUZLON and Realty stock where we have in advanced given adequate caution.
Written On 17-Sep-2009:
Market has given excellent return and Investor who had followed me should be happy as for the past 7years we have almost been right but, always being right will be very difficult and by increasing cash position we can always find good stock ideas even if the market where to rise. When we can find buyers for our stocks @ fancy price time we take some profit, and have cash. Correction never happens when we want it, it always happens all of a sudden and many reasons will be attributed to it.
Like before I am unable to say (Predict) if correction is going to start, Time period wise market may be nearing its top so Caution is advised.
Recent correction in Telecom stocks was rightly predicted on 19-Sep-2009:
Index is @ 16month high while Telecom stocks IDEA/BHARTIARTL/RCOM are underperforming the general market and IDEA is looking the weakest of all Rs.74.50 below caution is advised in the stock.
Understanding Equity market is the most difficult thing as the world is a Global village and events 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 multitude of factors 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
Good Caution Was Given Beforehand on 14 Oct 2009:-
Everyone is aware of all the facts and figure and confusion is all around and caution is seen on both sides, bullish on long term no one has any doubts after 5-6 years markets will be more than double from here but is the pain over. Economic recovery has been on stimulus and continuing stimulus for long with create excess and can lead to more problems latter. Many talk of V-Shape recovery while few talk of W-Shape recovery, the problem comes only if this recovery is W as the correction could be deeper and this time recovery will not happen so fast as it did before and for a recession which is worst in 80years things can turn worst before it can get better. Times have changed and world is better equipped to deal with help of past history but investor avoid being euphoric in next few week advance tax figure will be known and results also will flow in next 30-40 days this quarter would be important to judge if there is real overall growth and Global Hedge fund allow their clients withdrawal once a year and all maturity will be known end of this month.
Risk: Many retail investors have invested seeing the huge return equity market has given in last one year and their expectation is very high from market and with Derivative position very high after January 2008 leverage trader can soon feel the pain. But excess correction and pessimism led to this rally where chance of excesses on positive side would create bubble and risk to reward ratio is not favorable in my view and holding cash level above 60% would do good.
Today in modern day investment, investors are more carried by daily stock movement, and want to buy as low as possible and sell @ possible highest price. Many tell me I am always few months in advance in my prediction maybe they are right, “But when I asked to book profit there were buyers to all the stock, now where is the buyer?”. Investor Greed & Fear have always given way to euphoria and panic and before my Graph can suggest market is going to correct, my interaction with investors has given me advance signals.
When many investors who have not seen Graph tell me about Support & Resistance then Mr.Market has become maniac. Many times people are worried about I being right or wrong this time, which I think is never important, Think about your hard earned money and the risk you have taken. If I go wrong it will be talked out of 10 times he was wrong first time.
Common mistake investor make when we say correction many book profit and stay out and any 10-15% correction they feel the stock are sector has become very attractive and they start to buy, check how many investor hold Telecom stock, UNITECH, SUZLON and Realty stock where we have in advanced given adequate caution.
Written On 17-Sep-2009:
Market has given excellent return and Investor who had followed me should be happy as for the past 7years we have almost been right but, always being right will be very difficult and by increasing cash position we can always find good stock ideas even if the market where to rise. When we can find buyers for our stocks @ fancy price time we take some profit, and have cash. Correction never happens when we want it, it always happens all of a sudden and many reasons will be attributed to it.
Like before I am unable to say (Predict) if correction is going to start, Time period wise market may be nearing its top so Caution is advised.
Recent correction in Telecom stocks was rightly predicted on 19-Sep-2009:
Index is @ 16month high while Telecom stocks IDEA/BHARTIARTL/RCOM are underperforming the general market and IDEA is looking the weakest of all Rs.74.50 below caution is advised in the stock.
Understanding Equity market is the most difficult thing as the world is a Global village and events 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 multitude of factors 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
Good Caution Was Given Beforehand on 14 Oct 2009:-
Everyone is aware of all the facts and figure and confusion is all around and caution is seen on both sides, bullish on long term no one has any doubts after 5-6 years markets will be more than double from here but is the pain over. Economic recovery has been on stimulus and continuing stimulus for long with create excess and can lead to more problems latter. Many talk of V-Shape recovery while few talk of W-Shape recovery, the problem comes only if this recovery is W as the correction could be deeper and this time recovery will not happen so fast as it did before and for a recession which is worst in 80years things can turn worst before it can get better. Times have changed and world is better equipped to deal with help of past history but investor avoid being euphoric in next few week advance tax figure will be known and results also will flow in next 30-40 days this quarter would be important to judge if there is real overall growth and Global Hedge fund allow their clients withdrawal once a year and all maturity will be known end of this month.
Risk: Many retail investors have invested seeing the huge return equity market has given in last one year and their expectation is very high from market and with Derivative position very high after January 2008 leverage trader can soon feel the pain. But excess correction and pessimism led to this rally where chance of excesses on positive side would create bubble and risk to reward ratio is not favorable in my view and holding cash level above 60% would do good.
Nifty for this week closed more than 5.75% in negative compared to the previous week. The weekly chart indicates, Nifty has broken the wedge with good volumes, targeting the 4350 levels. Immediate support zone is around the 4636 to 4580 level.Nifty trading below 13 WEMA (4797) and 26 WEMA is around 4512.
RSI – as clear from the chart the, is at crucial support levels (yellow Line), break would signal stall in uptrend and could test 4350 levels.
MACD has turned negative and giving weak signal.
Nifty levels for this week
Support 4685 4617 4550 4482
Resistance 4738 4808 4878 4947
Nifty daily chart indicate that the downward trend line should act as immediate resistance levels, it’s around 4865 levels.Moving Averages – Nifty trading below 21 DEMA-4935 and 55 DEMA 4823, indicating the uptrend losing the strength and weakness to persists for the days to come unless closes above the sloping trend line.
RSI is in oversold zone.
MACD is indicating weakness in the Nifty.
The strategy for this week,
Buy Nifty 4700 Ce at dips with stop loss 4630 on closing basis for a bounce back up to 4800 to 4860 levels.
Closing below 4580 would indicate the termination of the uptrend and more weakness would persist and could test the immediate previous low 4350.
AS TOLD IN LAST WEEK, MARKETS BROKEN CRUCIAL LEVELS
OF 50 EMA {4834.91} & 70 EMA { 4734.13} ALSO. AS OF NOW
SUPPORT SEEN @ 4580 WHICH IS 100 EMA, IF IT BREAKS ,
NEXT SUPPORT SEEN @ 4359, WE SHOULD EXPECT RECOVERY FROM 100 EMA
IF NOT ,MORE DOWN SIDE WILL COME, IF IT BREAKS 4580
THEN LOWER BOTTOM WILL FORM IN DAILY CHART,
THIS DECIDES MORE WEAKNESS IN COMING MONTHS,
SO CAUTIOUS IF IT BREAKS 100 EMA,WATCH FOR THAT,
MAJOR REISTANCE IS NOW 50 EMA WHICH IS @ 4834.
ANY HOW , TREND WILL DECIDE ONLY AFTER BREAKING ANY SIDE
EITHER RESITANCE OR SUPPORT, WATCH FOR THAT
IN WEEKLY CHART ALSO JUST ABOVE SUPPORT ,FOR KNOWING OF WEEKLY SUPPORT CLICK
OTHER CHART
BUT COULDNT SUSTAIN BECOZ OF BEARISH TREND
4634 IS 20 EMA AS PER WEEKLY CHART SO,
WE CAN EXPECT RETRACEMENT FROM HERE
ALSO ON TREND DECIDING DAY ON 5.11.09
{ THURSDAY} AS PER TIME ANALYSIS NEXT
MONDAY ALSO WE CAN EXPECT SOME REVERSAL ie., ON 9.11.09
Smart card biggie Bartronics has come out with excellent numbers for the second quarter. Good earnings visibility coupled with exciting prospects for the industry make it good buy at current levels for target price of Rs 200. 
No comments:
Post a Comment