NEWSLETTER

MY CHART

Nifty :: An outsider bar with slightly high volume.. In daily chart Nifty take strong support as we say in our last post and made an Piercing Line Engulfing bullish candle..
FII net purchase figure in negative, and DII figure in nominal buy.. As per our last weekly post, US Dollar index almost made an bottom and turn up, in this week may be we see side way momentum with positive bias in Dollar chart.. Be careful in buying at higher level.. On 23rd Nov watch strong resistance 5064/5080 above 5080 next target of Nifty at 5113/5118/5143.. Our strategy up to 5064 wait and watch, above 5064 buy in deep (S.L 5025) Sell at high (S.L 5118).. Resistance for up move at 5064/5080/5113/ 5118/5143.. Supports at 5025/5010/ 4964/4955/4935..

 

(A K Prabhakar)

FIIs have turned sellers in the last 2days in Cash and Derivative segment and many question has been raised will FIIs be taxed in line with Brazil as many countries readying to tax inflow which is disturbing local currencies which is becoming stronger reducing their export capability, speculation Indonesia’s regional policy makers will restrict capital inflows dragged Asian market. In India there has been strong denial from Government, and in my view India can’t afford to anything which will reduce or stop inflows at this stage and we will see more views on this.

 PN-Participatory notes are around 16.5% of the total FIIs investment so there is no panic button. India Corporate need $15Billion in QIP by this fiscal and Government also needs equal amount and IPO lined up by Corporate India before this fiscal if included India needs anywhere between $35-40 Billion dollars in next 4-5months.

Deputy Chairman of the government's planning commission Mr.Montek Singh Ahluwalia said India has india needs to invest $500 billion on infrastructure over the five years to 2012. 

Global fear of taxing huge surge of inflow will be boon to India as a country we need more flows and possibility of funds routed here widens, but trouble will come only if this money is hot money or Dollar carry trade funds, as Dollar Index is showing a bottom formation and chances of the index rebounding sharply is possible in my view, which would push down Crude and Commodity prices and that can arrest asset price inflation which worries many countries and it would also see outflow of money from riskier asset.

And what would really worry FIIs and other investor is how strong Government is committed towards reforms.

Government couldn’t conduct parliamentary affairs in the first 2days and house was adjourned and government has bowed to pressure of opposition and own coalition partners in Sugar cane price issue. Dec 21 winter session of Parliament to end and how many bills will be passed and already some indication of Insurance bill unlikely to be passed in this session are reported by media.

Banking reforms mainly merger of Banks which boosted Market on Friday, will government be strong enough to go head Banking as unions call for a strike on November 16^th  and Telecom scam issue has the possibility of Ally turning foe as we have seen in the last 2days.

Coming week has derivative settlement and parliament session both together can create Volatility but important in my view would be Reforms we saw market giving thumbs-up by upper freeze on 18/May/2009 after the new Government got elected and expectation are running high and any failure to deliver will slow the economy and market would always sense this ahead and would react.

 Nov 30: GDP estimates for the Jul-Sep quarter to be detailed by CSO.

http://www.thehindubusinessline.com/2009/11/21/stories/2009112151381000.htm Foreign investors’ asset base shrinks in October

Parliament nod unlikely for insurance bill http://in.reuters.com/article/businessNews/idINIndia-44087720091119

http://in.reuters.com/article/economicNews/idINIndia-44108920091120

NEW DELHI (Reuters) - India is not considering imposing a tax to curb an influx in overseas funds, and indeed wants an increase in inflows, the deputy chairman of the government's planning commission said on Friday.

Foreign investors have so far bought more than $15 billion of local equities in 2009, after selling $13 billion in 2008, helping send Indian stocks up about 75 percent and lifting the rupee to its highest in more than a year.

Brazil and Taiwan have taken steps to curb hot money inflows, and other governments are keeping a watchful eye on inflows, wary that they could fuel asset price bubbles.

"It (capital flows) is rising but we want it to rise a little bit more," Montek Singh Ahluwalia told Reuters when asked whether government was considering restrictions on capital flows.

Asked if there was a possibility of India imposing a tax to curb capital flows, he said, "I will certainly not."

Ahluwalia, deputy chairman of the Planning Commission of India, a government body that advises on key economic issues, said foreign funds were needed for developing infrastructure such as road projects and were unlikely to create asset price bubbles.

"Bubbles only happen if you can't use the money productively. We should be able to use it productively," he said outside his office.

India has said it needs to invest $500 billion on infrastructure over the five years to 2012. 

Nov. 21 (Bloomberg) -- Asian currencies fell this week, led by Indonesia’s rupiah, on speculation regional policy makers will restrict capital inflows to prevent appreciation that may hurt exports. http://www.bloomberg.com/apps/news?pid=20601091&sid=aXjWX5HV_Zk4

 

(Nishit Vadhavkar)

It was a Friday second half rally which took everyone by surprise. It looks like the previous high of 5182 for this calendar year could be taken out. So how do we play this upmove?



First there are several confirmations we need to wait for:

1. The fall from 5182 to 4539 was retraced in slower time than the fall. Retracement in slower time could mean that the rise was just a retracement to the fall. The pullback could be 80% of the fall in extreme cases, which in this case would be 5054 +- 30 points for whipsaws. We have already seen a high of 5079. The market corrected to 4933 (a weekly pivot). This fall was 27 pc of the up move from 4539.

2. The trend line joining the lows from 4539 comes to 5083 approx. The index needs to close above this for the uptrend to sustain. Weekly supports come around 5016-5022.

3. The 89% retracement comes to 5111. Beyond this level it is clear that this up move is more than just a retracement.

4. Reliance is 1 stock which has a record date of 1:1 bonus on 27th November. Typically stocks tend to move up after the ex-bonus date. This is also especially because of the perception in people's mind that the stock has become cheap. Reliance is currently trading at Rs 2125. If we look at the charts, it has broken the trend line joining the lows from Oct (Nifty 4539). If it moves up above 2150, it would also break the trend line joining the highs from October. Next would be a first target of Rs 2300.

5. Reliance formed a bullish engulfing pattern on the charts on Friday and also negating the highly bearish 3 black crow pattern.

4. Another advantage of playing Reliance is that if the market tanks, its a solid stock in one's portfolio.

5. The dollar index is strengthening. This could lead to FII unwinding. This needs to be watched. The next week is a shortened week in the US due to Thanksgiving. With our expiry on Thursday, the trend would be clear by Wednesday

 

NIFTY CLOSED ABOVE 5000 AS PER MY EXPECTATION IN THIS WEEK AS TOLD HERE:- 

5K CLOSE PREDICTION 

AS PER TIME ANALYSIS FRIDAY GIVEN REVERSAL WHERE AS WEDNESDAY CHOPPY
SESSION AS PER EXPECTATION ON 15TH NOV 09 POST NEXT REVERSAL WE CAN EXPECT
ON TOMORROW (LITTLE REVERSAL}  i.e., MONDAY { 23.11.09} ,NEXT IS FRIDAY i.e., { 27.11.09}

AS EXCPECTED NIFTY CLOSE WELL ABOVE 5000 IN THIS WEEK CANDLE
SUPPORT SEEN @ TREND LINE MENTIONED LITTLE WAY HIGH  TO THE LINE
WHICH IS SHOWING NO WEAKNESS IN THIS WEEK , IN THE SAME WAY HORIZONTAL
TREND LINE SHOWING RESISTANCE @ 5079 WHICH IS TESTED 3 TIMES IN RECENT RALLY
SHOWING HIGHER TOPS ,IF THIS IS BROKEN MY TARGET OF 5177 IS REACHABLE IN A SESSION
ITSELF, LET US SEE WHAT HAPPENS,HOPE FOR THE BEST ,CHEERS 

CLICK LEFT CHART TO KNOW WEEKLY LEVEL & CLICK RIGHT CHART TO KNOW TRADING LEVELS FOR MONDAY {23.11.09)

FOR TREND CHANGING TIMINGS WILL UPDATE IN CHAT BOX IN LIVE MARKETS

Sintex clocked huge volumes last week. Is the stock buy now? Well, let us not jump to conclusions and here are few observations

Sintex stock Daily Chart

Here’s a daily chart and some casual observations

Source: ChartAlert [www.chartalert.com]

1. Stock has strong resistance around 280 levels. In last six months - stock has twice stalled around that level. It means any trading position should be closed around 280.

2. Stock does not have any well defined support but in last six month - stock has made a low around 185 and one should treat it as support level.

3a-3b: The band looks mirror image of each other. The stock first tanked from 280 to 205 levels and then bounced back to 240-245 before tanking to 185. In 3b - the stock has bounced to 240. Will it follow the similar pattern like what happened in 3a.

4. This time, in 3a - the stock has bounced from 205 on above average volumes. Will this trading interest propel the stock to higher levels?

5. The stock is range bound and it makes sense to play extremes only i.e. Buy around 185 and Sell around 280 because within the range - the moves can be very choppy.

Summary

Fundamentally, Sintex appears to be a good play. The company is expected to post an EPS of Rs. 30 in FY11 and at CMP of 228, the stock is available at less than 8 times FY11 earnings. Range bound stocks are BUY Low and Sell high stocks - and Sintex can be traded that way.

As always, please note the above stock is not a trading recommendation.

 

 

  (Ilango)

In the very short term, Nifty has turned "UP". "5035" is a crucial support for the day. As of now, the view is that the upsides are limited...
It is an uncertain zone...there are many possibilities running with different time cycles. Trade light. In the very short term, both longs & shorts need to be quick to take their profits until some clarity emerges.
My preferred view is - Nifty is correcting the fall from 5182-4539 and it can come all the way upto 5150++ or fall right away as in 2nd wave OR can clear 5182++ also as in an irregular "b" wave, etc...