NEWSLETTER

November !!! This is yet again the zone of 21st month from January last year. Had mentioned about losing confidence in the month of Oct/November in my post in March.

So when we are in an important time period month as well as at a crucial stage in the extreme short term with extreme volatility and indecision in the markets.

Although trying to project time and price over such a long period is definitely a difficult task but there is no harm trying it. In the last 1 year have been accurate with the time zones but finding the magnitude has been real hard. October we did see economic data and confidence at lowest but index did more then what we thought. For Feb-March did point out the bottoming time and a re-test but had expected the rally to extend till May but it went much beyond till Oct.

Right now !!!

1) Time Projections

Sensex has seen a roller coaster journey from 21k to 7.7k followed that by 8k to 17k and is back at 15k odd.

On the time front November being the 21st month ( not exact ) i do expect the confidence levels of the market-men reducing with lots of talk and speculation. We do see markets react weirdly around this time zones but end up making a major top or bottom.

There are two viewpoints here --- Me the BULL ! and the analytical Bear.

There would be a camp which expects a nice correction in the month of November ( already started couple of weeks back ) which may create an important bottom and set and upward welcome to 2010 !!!

The other camp is the one which believes its a major BEAR rally and index might have well made a major top in November and the next big dip is ahead of us which may take us to 12k-13k or the ultra bearish ones may even call it 10.5k !!

As always i would like to go wrong or very accurate then to be a diplomatic analyst and be right all the time with 4-5 alternatives in my hand !!

For me i do prefer the BULLISH Scenario.

The time projection for the same suggests that Index may see a good retracement bottom in the month of November followed by which next 3-5 months would see yet another upmove. This may also consist of a consolidation phase for 3-5 weeks which may be terribly boring also.

For the Bearish Scenario !

The people in this camp have been calling for a new low since march and a top since 12k !!. Index might have seen a major top at 17493 and should now well be on a major fibonacci retracement to the extent of 50% of the entire upmove. Ultra bears might even look for 60-80% retracement.

2) Price Projections

This is the most difficult part as projecting an accurate price target is next to impossible.

For the bullish scenario one would expect a retracement of 23.6% or 38.2% which would mean 15270 and 13900 would be a possible bottom area.If its going to 13900 then also it should see a stopover at 15.2k. Once the bottom is reached one can expect 17-18k to be tested in next 3-5 months. We would review the same in March 2010 !!

Some of fundamental supporting stuff for the same is ...

Expect earnings upgrade to happen in Dec/March quarters with demand pick up by March. Also the low base in last 2 quarters of 2008 ( i.e Dec/March) would make the current earnings much better. Financial window dressing for Dec/March by Institutions and so on.

Although i dont prefer the Bearish scenario such a projection suggests that Sensex is close to a January scenario and a major margin based panic could see a sell of of 4.5k points ( Rising Wedge range 13.2k to 17.5k ). The targets for the same would be 12.5k in the month of November itself and then index embarks on a re-test of 15k/17k which will take a longer time.

Fundamentally supporting stuff :

Excellent earnings in June/Oct are due to cost-cutting, fresh-inventory build-up,lower raw material/labour costs. Margings have increased sales have not.

100% move up leaves a lot of profit on the table to give the first correction and a cascading effect of sell-off takes it further.

Economy may have seen the worst but still in lots of trouble.

Thats a whole lot of sentences with possible predictions but the bottom line is next few weeks could be tricky which will then set the tone for Dec to March. Remain bullish for medium term but short term volatility will give excellent investment opportunities.

BELOW ARE THE EXCERPTS from previous posts.

SEPTEMBER 08

My expectation is that by end of October the major skeletons would be out !! although repercussions and lagged effect would stay till Jan 09 and a new thought process could emerge around March - May 09.

DECEMBER 08

Ideally the best time to invest would be in Feb-March and stability or turnaround could start March-May . This has been the preferred guess from my side since a long time although levels went wrong in Oct maybe again we may or may not be exactly correct in next few months. But yes i do feel there would be ample opportunities in these 3-4 months as a sharp bear rally could also be there and gr8 investment/trading gains on cracks too.

So if one is a a very defensive investor and low risk apetite then can go SIP mode very very slowly in this period or rather have a fresh look around Feb-March whether index is at 7-8k or 12k comfort could be back around Feb-March and more confidence by May.

MARCH 09

The next important time period comes around the 21st month which comes in November roughly where in we may see some uncertainty and loosing confidence also before we might get over the after effects of the bear run.

MY CHART

Nifty :: As per our yesterday post Nifty exactly take support at 4670 and bounce but unable to hold at higher level in last hour, after breakdown 4670 sharply touch strong support zone 4549 to 4491.. Fifth gap down red candle with third Bearish Candle Take Over pattern.. Volume is low in sharp cut at extreme oversold short term indicator.. 8 to 10 bar buy setup with strong support zone in between 4491 to 4549… Technically shorting at current level is danger.. Be careful in shorting..Our strategy for 4th Nov. Buy in deep (S.L 4491) Sell at high (S.L 4728).. Resistance for up move at 4606/4619/4688/4728..Supports at 4549/4537/4519/4510/4491..

 

 

About The Company

The power unit, Jindal Power is a wholly-owned subsidiary of JSPL and this company is planning on an IPO in early Jan 2010, to partly fund its 2,400 megawatt superthermal power project in Chhattisgarh. It already has 1000 MW operational. It has 10 units of 135 MW each of which the first unit would go on stream in January 2010 and then one unit every two months. It is also expanding its capacity by another 2400 MW which is scheduled to get operational in 2012-13. So by the end of 2013, Jindal Power will have 4750 MW.

About The Financial Results

Jindal Steel & Power Ltd (JSPL) financial performance for the second quarter ended 30th September 2009 has not been as encouraging as expected. Net Profit on consolidated basis increased by just 6.05 % (YoY) at Rs. 808.36 crore. But what was more disappointing was that consolidated net sales dropped 14.48% at Rs.2445.28 crore.

DRI and pig iron production rose 5.01% but sales was down 21.94%. Steel products production grew 32.31% but sales was up by a marginal 2.14%. Net realisation from sale of steel products dropped during the quarter mainly due to drop in steel prices and this affected the overall performance. Steel prices on a YoY are down 43%. Production of power rose 2.57% at 701 kWh. And it is this division which really helped the company shore up the performance – sales was up 21.88%, which was 36% of the overall net sales earned by the company for Q2FY10. But net profit from the power unit was at Rs.514.71 crore, which was 64% of the net profit earned in current Q2. Clearly, power is what makes the company powerful today.

PLF (Plant Load Factor) was down at 84% in current Q2 compared to 96% in Q1FY10. This was because it two units were shutdown and due to the monsoon, power generation was lower. So this performance of the power unit could have been much higher than what it has come in Q2.

(ss)

The above table shows % losses in various sectors. Sensex has dropped 11% since this fall began on Oct 17. The strong sectors (top four) have suffered less damage. Realty has suffered the most at -26%

 

It was more than 20 years ago in about 1986, India entered into the Balance of Payment problems. India's imports were on a constant rise, while the exports were on a decline. The Indian industries were highly inefficient owing to many reasons such as the lack of competition, monopoly by state owned companies and no FDI. The fiscal deficit was inching upwards to about 12% by 1990. The foreign exchange reserves were drying at a faster pace.

The climax was sometime in 1990 - 91. India had Forex reserves to finance imports only for next 3 weeks and it was close to bankruptcy. As to how house hold jewelery would help a finance problem in a home, it was the Gold that RBI had, which gave the helping hand. India air lifted its Gold reserves and i believe it was taken to Bank of England. India pledged its Gold to avoid getting bankrupt.

And today, after almost 20 years, India, after reversing its fortunes, has bought 200 metric tone of gold worth 6.7 billion USD from the same IMF, with which it pledged in 1990. The transaction was equivalent to around 8% of the World's annual mine production. This was the first sale of gold from IMF reserves in almost nine years.

India is now said to be the ninth biggest government owner of gold and it is believed that it was holding around 358 tons prior to this buy. It was a total surprise to everybody including me, since China was widely expected to take all of the Gold that was on sale form IMF. As soon as the NEWS was out, gold immediately rose by around .2%.

The IMF sale accounts for almost half of the 403 tons that it had planned to sell to finance and lend at reduced rates to the low income nations. The transaction involved daily sales from Oct 19 to Oct 30 at market prices and is in the process of being settled. It was widely feared that there may not be much interest from the central banks to buy the 400 tons of gold from IMF, since it was quoting near to its record highs. In such a case, as the IMF had announced, it would have gone to the open market, which would have spiked the supply instantly, resulting in gold prices declining.

Russia, China or Brazil and even some south east Asian countries are expected to put a tough fight for the remaining 203 tons from IMF. China, the world's largest gold producer has increase its reserves of the metal by around 76% to 1050 tons since 2003.

India buying gold from IMF at record prices, have thrown out questions of the value the USD commands. It is being widely perceived, that countries are losing interest in USD and they are turning towards gold. The buy from India does not really indicate that it is betting on higher gold prices, but on a lower USD. 

 

4615-4622 MAY GIVE SOME RES TO UPMOVE,NIFTY CAN BE SHORTED WITH SMALL SL NEAR IT,4530 IS STRONG SUPP..IF NOT BREAK STRONG UPMOVE MAY COME,

SMALL/MIDCAP STOCKS TO WATCH:
PAREKH PLAT,
PRICOL,
RAMAKRISHNA FORGE,
SPICE MOB,
KOPRAN,
SAMTEL COLOUR,
GEMINI COMM,
THEMIS MEDI,
TIMES GUAR

STOCKS TO WATCH:
NALCO,
LUPIN,
BEML,
BEL,
ASHOK LEY,
DR REDDY,
RNRL,
GVKP,
CUMMINS,
GTL INF,
HIND DORR,
IFGL REF,
JK TYRE,
PRICOL,
KARUTUR

Nifty Fut 04/11/2009
Below 4533 plz avoid long TGT 4489/4413
Above 4659 cut all short postions

Buy NF Above @ 4580 and 4595 Target 4630-4701 to 4827.
SSL-4521.Main resistance 4580-4634-4681

Sell NF Below @ 4540 and 4521 Target 4482-4390 to 4171.
SSL-4595.Main support level-4516-4440-4341

 

Marico Ltd Shows Relative Strength Amid Sharp Correction

1. Marico Ltd shows relative strength and manages to stay above its line of support @ 95.0 amid a sharp correction in the general market
2. The stock has not closed below its 50-day moving average since the rally began in Mar'09

Marico Ltd - 03/11/2009 - Daily Chart

52 Week High: 106.90 (October 22, 2009)
52 Week Low: 47.0 (November 17, 2008)
 

 

how is the fall , hope u enjoyed this as predicted on exact day on yesterday post 

As expected nifty broken major support of 100 ema which is @ 4592
as of now, now support seen @ 4363 as suggested in yesterday post
May jump to 4784 on trend reversal days of tomorrow i.e.,5.11.09 and
coming monday ie., 9.11.09

Retracement happen as expected in weekly chart but failed to cross 1st resistance of 4734 ,just made day high