NEWSLETTER

(Nishit Vadhavkar)

It was a turbulent and truncated week which saw a brutal sell-off. By Friday afternoon, the carnage had abated. The question is going ahead is it buy on dips or sell on rallies? Let attempt to see the both scenarios. I think 2 scenarios are clearly possible now and we are at the inflection point:

Bullish Case:
1. As shown in the image the trend line draw joining lows from August have held.

2. The government is having huge PSU divestment in Feb. They will hold up the markets provided global cues are supportive. DII bought 7500 crores from Jan 21st. If FII selling stops the markets will go up.

3. The global markets are also oversold and due for a bounce.



4. If we take rally after the budget from 3918, we can see 4 clear waves:

a. Wave 1 - 3918 to 5181 (1263 points)

b. Wave 2 - 5181 to 4539 (642 points) approx 50% correction

c. Wave 3 - 4539 - 5310 (771 points) Wave 3 is 61% of wave 1.

d. Wave 4 - 5310 - 4766 (544 points) approx 70% correction

e. Wave 5 will unfold 4766 - ???

Now wave 3 cannot be the shortest of waved 1,3,5. So max would be around 750 points which takes us to around 5500 on Nifty. Now wave 3 was 61% of wave 1 and if wave 5 is 61% of wave 3, then 5236 would be the target.

5236-5500 (Sensex 17500 - 18500).

Wave 1 took 3 months and wave 3 took about 2 months to unfold. Wave 2 and 4 took about 3 weeks to correct.

This could mean wave 5 may take upto 1 month, the traditional pre-budget rally.

5. The 1 month rally could well also fall in line with previous history of mega IPOs sucking out liquidity and then the markets tanking.

Now the bear case:

1. FII sold 11000 crores of shares in last 10 days. Market and DII cannot absorb such selling on sustained basis.

2. The trend line joining the lows from July upmove is decisively broken on both daily and weekly basis. This could mean the up move is over.



3. We are just on a corrective upmove of the fall from 5310 to 4766. Retracement levels come to 4973, 5038 and 5100. 4940-4980 is key resistance level for the market. I would buy only above these levels.

4. Tony Caldero talks of a top in US Market. His Elliot count on the S&P has worked very well.
http://caldaroew.spaces.live.com/

5. The PIGS are in danger of a collapse. Portugal, Spain, Greece and Ireland are identified as potential sovereign debt defaults. If this default does happen, Lehman would look like a picnic.

6. Risk aversion would return, emerging markets would tank and the US Dollar would strengthen. This would be a vicious cycle. The Dollar Carry Trade would unwind further leading to FII selling.

To sum up, 2010 looks to be a time of caution.

newsletter

(Satyam Sit)

A very volatile but a trading friendly day it was. the high probability of the bounce was clearly told and discussed on previous day's post. Market just bounced off twice exactly from levels discussed (support was given @ 4825, low made 4824). But every bounce will be considered as correction as long it can not manage to go above 5080/85 and even 5180.Though short term traders who has been holding their shorts since 5080 is broken, can trail ahead their stop ahead to 4950 level. As it is indicating a short term reversal above that place.

Supports: Very very immediate is 4835, sustaining below that can be an early threat of a breakdown below 4810 zone. 4760-4730 will be the next target for nifty after the violation of the above said levels, where it'll attempt for another bounce back. But further violation can very bring 4640 in a whisker.
Resistances: 4910 and 4940 is big time important. later one can also be the s/l for short term shorts initiated. Above that Nifty can certainly add some more fuel to it's yesterday' bounce for the targets 4970/75-5040-5065/70.
Can be a range bound session before giving any valid buy/sell signal. So waiting patiently can be a prudent decision as the follow up move can be a larger one.

S means Srei Infra,Simmond Marshal and Sabero Organic.
All have come with great results and still going cheap.Aries Agro my old call has also come out with great results.Readers needs to follow and buy if found good......Buying and Selling decision is YOURS....I just point them....

Updates: Quippo Infra is getting merged with Srei Infra which will add value to shareholders and creditors.That is a great development that is taking place in Srei Infra.....
One more "S" has come out with excellent result which I have recomended.It is Surana Corp ltd which is in Jwellary Business.This is the 4th "S"....
Surana Corp has posted 14.78 cr NP against 3.21 cr last year same qr.Surana Corp has an eq of 21.86 cr.Do the math yourself....Np has gone up by 360% and sales up by 514%.
I know there are many readers who use to look at many things and when they look at my pick they gets puzzled because when I recomend there is nothing to say about.But then the story unfolds slowly......and that takes time....remember this always with my call......there cannot be instant appreciation....if that happens then it is your LUCK.........

 

 

newsletter

(Satyam Sit)

Yesterday I stated............. "a break bow 4975 can certainly make Nifty weak for the day and a immediate target will be 4940. Further breakdown can cause in more damage to Nifty which can lead fall up to 4860-4810/15-4730." We broke below those areas in very early morning and the downward slide was smooth enough. Impulse moves on every time frame is live and kicking. 

Re-posting the first chart posted in the view for 20th January, and check for yourself. HERE is the chart posted earlier and below is the current update.

 

Perfect..... isn't it?

Supports: 4825/10 looks like very close. But I am personally expecting some bounce as correction on the upside.So holding 4810/25 can provide some reasonable upmove on intra day basis. Further Violation can cause 4725/30.

Resistances: 4855 is immediate. Above that 4905-4955 is possible. Bigger bounces will be targeted by the shorters to create further short positions. Will try to update intra day tomorrow.

SENSEX takes strong support around 16210 and should sustain above the channel support line too. It may take a dash below 16200 briefly but should close above the support in weekly chart.

NIFTY too has honoured strong support at 4810. It is showing more weakness than the SENSEX as it has breached the channel support in daily chart. However the combined volumes of both the indices  suggest that the bottom may be very near. Adventurism at this stage could however be dangerous and entry is advised only after an emphatic upmove.

(Nooresh Merani)

Today in the morning had just made a post on RSI reaching highly oversold levels. The markets were down arnd 100-200 points in the morning. As per RSI we have reached to levels which were last seen around 15300 and previous major lows.

Check the RSI suggests oversold post -- http://nooreshtech.blogspot.com/2010/01/rsi-suggests-oversold-time-for-bounce.html

Further Technical/practical Observations with charts :

The index has fallen more then 16600 levels which i expected to hold or at least give a bounce. Better part is we were early into the rally with leverage taken at 16600-17k last time which we kept booking at higher levels so such a healthy correction is digestable.

Currently for stock specific actions this is a time to watch and enter/average on turnaround signals. But i would continue to maintain that avoid leverage as volatility can cut traders.


1) Fibonacci Retracements :

In the last few short term uplegs none of them have fallen much below 61% which comes to 16250-16300.
Retracement for the last move from 15.3k the 38% level comes to 16100.
For the total upmove from 8k the 23% retracement comes to 15500.

So ideally one could see bounce from 16100 band or in case we see further downmoves even after that then also 15500 should hold up for the next few weeks.
Move below 15500 opens up a correction of a higher degree.




Trendlines/Averages :
The extreme short term trendline which was at 16600 and a few bottom supports in that zone got broken today and the next important one comes around 16100.

Recent bottom at 16200 is a level to watch for. 200 day moving average comes closer to 15500 which would be the worst case in near term.
Sustaining below 15500 could really open the gates to much lower levels.

Conclusion :

Traders can look towards a bounce back trade on Nifty with a stop of 4770 and buy niftybees in parts. If the level gets broken look to re-enter around 4640-4670 with a stop of 4600.

Momentum could be seen on crossing 4950 levels which can take it to 5050-5090 also.

Sensex levels are 16100 and 15500 respectively. Do adequate risk management.

(Ilango)

Stocks have broken major trendlines and the correction or the downtrend will be deeper that the ones experienced during this last one year upmove. Do not get deceived by any rallies. Sell into 3- 4 days old rallies.

 

(Ilango)

Last time Nifty made a sharp reversal from 4807. Would it consider the same now. May be briefly or may be not, being the settlement day can be wild.. The weekly set up has now changed to a serious reversal.The settlement day will be a serious one with huge choppiness. Only the "harvesters"(Positional Shorts) will have it good. High volume selling could be of only delivery selling which may not attract rallies. Only if there are "shorts" in a big way, will it result in a sharp rally. As my critic puts it, "Stuck longs will come in to unwind on every small bounces to cut their losses".

 

 

 

 

 

 

 

 

 

 

 

 

There seem to be a positive divergence developing in hour charts but the manner in which it is developing(sharp falls) do not give it much credibility. A good +ve div should have an exhausting index/ stock where as Nifty seems to be sprinting fast..

The serious minded positional shorts may book profits either @ the multiple tops of 4700-4750 zone or when Nifty is able to close above the "Day Low Ema". Let me add this: this is not a foolproof reversal but a likely sign of "pause".

newsletter

(Satyam Sit)

Supports: All the supports are in tact as 4975 & 5080 is in tact on either side. a break bow 4975 can certainly make Nifty weak for the day and a immediate target will be 4940. Further breakdown can cause in more damage to Nifty which can lead fall upto 4860-4810/15-4730.
Resistances: Immediate strength for intra day can come above 5045 zone. Above that 5080 is possible. Further violation of 5080 on the higher side can bring 500-5140-5180.

 

(Satyam Sit)

Supports: All the supports are in tact as 4975 & 5080 is in tact on either side. a break bow 4975 can certainly make Nifty weak for the day and a immediate target will be 4940. Further breakdown can cause in more damage to Nifty which can lead fall upto 4860-4810/15-4730.
Resistances: Immediate strength for intra day can come above 5045 zone. Above that 5080 is possible. Further violation of 5080 on the higher side can bring 500-5140-5180,

 

 

 

 

NEWSLETTER

Nifty intraday broke out of the Bullish FLAG pattern @ 5276-5281 range & made a high of 5292, but closed @ 5274.

• Momentum Oscillators on Daily basis are in support of further Upmove. Hence, there will be buying support on intraday basis near support zone.
• Resistance Zone @ 5287-5300-5310
• Support Zone @ 5254 - 5234 – 5210
• Nifty closed well above all near MA’s – 5/10/20 DMA showing buying strength.

Nifty consolidated for a major part of the last week between 5300 & 5170. Nifty made a low of around 5170, support area of 5160/5170 mentioned in earlier chart is holding well.

Any, closing below 5160-5110 on daily/weekly basis will signal change in short to medium term trend. One needs to be cautious on any move below these levels.

If Nifty crosses above 5300-5310 with volumes, it will touch 5370-5420 in next couple of sessions. Buying the dips near support will be rewarding with necessary stop loss.

__._,_.___

GE shipping

Mahindra Life





There has been few news flow which are important for market moves which will have impact on market as said earlier PSU stocks are still looking strong quoting @ trailing 17.12 P/E as per BSEPSU index and BSEPSU holds 29% of the total BSE market capital and in next 2years when more companies are listed this would increase beyond 40% so no wonder many mutual funds are announcing launch of PSU equity fund like Religare has done.

Government need to attract investment so many news flows is expected and good dividend payout possible so investor should take informed decision as many penny stocks are also moving and this can create a problem for investor. So please check track record, ownership, dividend payment in last 5years, promoters holding and even market cap as low equity base stocks can be easily be manipulated in this euphoric market.

The government came out with a disinvestment policy last month, under which PSUs earning net profit for the last three years would be listed and all profitable, listed PSUs not meeting the mandatory public shareholding of 10 per cent would be made compliant. There are 10 listed PSUs where public holding is less than 10 per cent and at present, there are 61 unlisted profit-making public sector undertakings (PSUs) and 10 listed PSUs, in which the government is looking to offload its stake, Sunil Mitra, disinvestment secretary said. The department of disinvestment will submit a action plan by end of March’10 after consulting with the administrating ministries of the 71 PSUs.
 http://akprabhakar.blogspot.com/2010/01/markets-consolidated-their-gains-this.html  MRPL, NEYVELILIG, GSPL, POWERGRID are PSU and GICHOUSING & IFCI are indirectly held by government in our Fabulous-15 list

http://www.bseindia.com/mktlive/indiceswatch.asp?iname=BSEPSU&sensid=01&type=comp&graphpath=/applet/images/graf_appBSEPSU.gif

Religare Mutual Fund has announced the launch of its new open – ended equity scheme – Religare PSU Equity Fund. The fund seeks to generate capital appreciation by investing in companies where the Central/State government(s) has majority shareholding or where the management control lies with the government. The fund will invest in companies having presence in core sectors and are expected to benefit from the divestment process and reforms.

http://www.business-standard.com/india/news/the-psu-opportunity/382889/  The PSU edge, Apart from higher stock returns in the past, an important fact is that most of these companies have a strong advantage in their core business and enjoy leadership position. Today, companies like BHEL, Power Grid, NHPC, NTPC, ONGC, Indian Oil, State Bank of India, BEML, Bharat Electronics, Shipping Corporation and Concor are the largest players having a lion’s share in their respective industries. Some of these companies have created huge entry barriers in the form of their manufacturing capacities, distribution networks and consumers, which cannot be easily replicated. This gives them a clear advantage, particularly in a growing economic and increasingly competitive environment. Notably, most of these companies operate in industries like power, engineering, banking, logistics and so on, where the growth prospects are enormous. All this will help them not only grow their businesses bigger and generate huge cash, but also distribute the latter in the form of dividends, which makes PSUs an attractive investment.
 IDBI Bank is believed to have zeroed in on Federal Bank for acquisition. IDBI Bank has also completed due diligence, an exercise undertaken by the acquirer to assess the value of the entity before purchasing it, a source close to the development said. http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/IDBI-Bank-zeroes-in-on-Federal-Bank-for-acquisition/articleshow/5473157.cms

The merger talks of state-owned Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) are back on the table, according to government sources. Due to the poor financial health of the two state-owned PSUs, the government is looking at the proposal to merge the companies to have better synergy and efficiency. http://www.bloombergutv.com/industry-news/telecom-industry-news/42850/bsnl-mtnl-merger-back-on-the-cards.html

RCOM is learnt to have begun talks with strategic and financial investors for selling 5% stake in its tower unit prior to the planned IPO. Banking sources with direct knowledge of the development said the company was hoping to raise about Rs 2,500 crore from the proposed sale. J M Financials is the lead manager of the talks with a host of co-lead managers such as J P Morgan, Enam Financials , Duetsche Bank, ICICI Securities and HSBC. http://www.thehindubusinessline.com/businessline/blnus/17181606.htm

GAIL (India) net profit jumped over three-fold to Rs 860 crore for the quarter ended December 31, 2009, over the same period last year. Turnover rose to Rs 6,187 crore for the third quarter ended December 31, against Rs 5,812 crore in the same period previous fiscal.

Tata Communications has reached an agreement to acquire BT Group's Mosaic business, which offers on-demand digital media management platforms, that manage content and workflow from production to distribution across collaborative market ecosystems. http://www.business-standard.com/india/news/tata-communications-acquires-mosaic/83356/on

Suzlon Energy has forayed into the Swedish market with its first order coming from Triventus AB, a wind power developer and consultant. The order is for two S88-2.1 megawatt wind turbines. Suzlon will also sign service and maintenance partnership contracts with a subsidiary of Triventus for future projects in Sweden http://www.business-standard.com/india/news/suzlon-enters-swedish-market/83367/on

The Indian auto industry is likely to see a growth of 10-12% in sales in 2010, but companies will come under margin pressures as competition hots up in the market, according to global rating firm Fitch.

Steel futures prices dropped by Rs 390 to Rs 26,100 per tonne on Monday following heavy selling by traders, driven by weak demand in physical markets. http://www.thehindubusinessline.com/businessline/blnus/08181420.htm
 

http://www.business-standard.com/india/news//bsnl-ipo-may-happen-next-fiscal//83407/on  The government today rapped state-owned BSNL for poor financial performance and made a case for disinvestment in the telecom PSU through an initial public offer (IPO).

http://akprabhakar.blogspot.com/2010/01/mtnl-only-listed-telecom-company-having.html  MTNL - Only Listed Telecom Company Having 3G License

http://akprabhakar.blogspot.com/2010/01/idbi-bank-moves-ahead-on-bank-buy-and.html  IDBI Bank moves ahead on bank buy and update

Ilango)

Look for confirmatory break outs and follow the prices.

(Ilango)

Maruti has built a base around 1405-1415..if holds, it is set for a rally.

Tata Steel, if holds 625-630 zone, may start its 5th wave soon..

NEWSLETTER

MY CHART

Nifty :: Made an Harmi Black bull candle with outsider day ..Volume is high. As per our Friday post, as far as Nifty stay and close above gap area 5238 to 5242 nothing to worry for bulls.. Third down day indicate side way momentum with negative bias, be careful at higher level, now momentum once again turns strong only above 5287.. For 12th Jan watch strong support 5220 and below it 5170..As far as stay above 5220 our strategy buy in deep (S.L 5170/5160) Sell at high (S.L 5287).. If Nifty open up and face resistance near 5276/5287 change strategy as sell at high (strictly S.L 5287) buy in deep (S.L 5220).. Resistance for up move at 5276/5287/5297/5326/5360.. Supports at 5220/5214/5170.. 

 

NIFTY DAILY: BULLISH FLAG FORMATION?

Flagpole Length = 300Pts (5300-5000)

Flag Breakout = NIFTY 5300 + 300 = 5600 Target

 

 

Big Shopping by FIII's

 

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	11-Jan-2010	5973.59	2932.03	3041.56

 

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	11-Jan-2010	1674.68	1352.22	322.46

NEWSLETTER

Will the Euro Become the Most Hated Currency for 2010?

Countries that have joined the euro currency have unique challenges when economic times are tough. And we’ll likely find that the range of problems within the Eurozone will present a major threat to the euro’s lifespan ...

Two major tax reforms to give edge to Indian bussinesses

Two major tax reforms due by next year promise to reduce transaction costs for exporters significantly. A simpler income-tax regime will put more money in the hands of businesses, which can invest these as they consider best ...

Manufacturing growth up for first time in 3 mths

"Concerns that growth in India's manufacturing sector was taking a decisive turn for the worse should be allayed by this impressive release," said Robert Prior-Wandesforde, Senior Asian Economist at HSBC ...

Bank lending up five-fold in Dec

Bank lending picked up nearly five-fold in December over the previous months. Food & non-food growth loans amounted to Rs 29.41 lakh crore, as on December 19 ...

Indian stock market in bubble territory in 2010

Prevailing economic conditions, both domestic and global, suggest the Indian stock market is poised to continue to rally in 2010, increasing the risk that a bubble is forming, according to analysts at research-led investment bank Noble Group ...

RIL raises Rs 2600 crore in share sale to LIC

The sale of existing treasury shares comes as energy-based conglomerate Reliance Industries, India's largest listed firm, looks to buy bankrupt petrochemicals firm LyondellBasell in a deal sources say could be worth as much as $12 billion ...

Limit likely on ultra mega power projects per developer

In an attempt to ensure that big electricity projects achieve financial closure, the Union power ministry plans to cap the number of so-called ultra mega power projects (UMPPs), each with a capacity of 4,000MW, that can be awarded to a single developer ...

Suzlon bags 27 MW wind power order from ITC

Wind turbines manufacturer Suzlon Energy today said it has bagged an order from conglomerate ITC for supplying 27 MW of wind power power turbines to projects in Karnataka and Maharashtra for an undisclosed amount ...

Steel Output Rises Again

According to the data released by World Steel Association (Worldsteel), global crude steel production for the 66 countries reporting to Worldsteel improved 24.2% year over year to 107.5 million tons in November 2009 ...

India Inc set to witness high level of attrition in 2010

"Attrition is a sign that there is a growth in the industry. Attrition will go up, the moment the job market picks up," GlobalHunt India Director Sunil Goel said, adding that sectors such as BPO as well as IT and aviation were likely to see the maximum attrition ...

Indian drug makers maintain pace of US marketing approvals

"Indian companies have realised that it is difficult to survive in the US market with a few products and, therefore, it is necessary to have a large basket of products. Established players like Ranbaxy or Reddy's are now concentrating on niche and specialised products, than trying to sell all products going off-patent," said Ajit Mahadevan, partner - health science practice, Ernst and Young ...

Ranbaxy launches anti-fungal chemical in India

The company has launched a new chemical entity Lulifin (Luliconazole) in the Indian dermatology market, the pharma major said in a filing to the Bombay Stock Exchange ...

FOR DATE 5-1-2010
SCRIP = MAH & MAH. (BSE),
SCRIP CODE = 500520,
PREVIOUS CLOSE = 1129.6,
STOP LOSS = 1110,
TARGET = 1235.
FOR INTRADAY MOVEMENT OF THE STOCKFILTER PLEASE Click Here!
(OR CLICK THE LINK ABOVE LIVE SENSEX WATCH.)

CHART AS ON 4-1-2010

WITH A CONSIDERABLE RISE IN VOLUMES, THE STOCK HAS GIVEN A FRESH BREAKOUT IN THE LAST TRADING SESSION. THE STOCK WAS IN CONSOLIDATION SINCE NOVEMBER.
MACD SHOWS A POSITIVE CROSSOVER.
TECHNICAL ANALYSIS AND PORTFOLIO MANAGEMENT SUGGESTS THIS COUNTER GOOD FOR A SHORT TO MEDIUM TERM RANGE.
STRICTLY MAINTAIN AND FOLLOW THE STOP LOSS.

MY CHART

Nifty :: Body gap up bullish candle with traded volume, value wise volume low.. As far as stay above breakout level 5182/5160 nothing to worry for bulls.. For 5^th Jan. watch strong resistance level 5326, be careful at higher level still midterm negative divergence is there.. After breakout max up side of this up move up to 5500/5550, but before 5500 too many resistance is there with bearish Wolfe wave formation… Our strategy for 5^th Jan. up to 5200 buy in deep (S.L 5160) Sell at high (S.L 5326).. If Nifty open gap change strategy near 5300 as sell at high (S.L 5326) buy in deep (S.L 5200).. Resistance for up move at 5255/5281/5294/5326/5352.. Supports at 5200/5167/5160.. 

Also posted a view on Accentia Tech so ppl might get inspired seeing a techie give funda analysis :) ... Stock moved from 120 to 200 in 1-2 mths ! and still not stopping.

Next i posted a detailed view and technical reasons to suggest why Midcaps/Smallcaps should start shooting up !

We have got many 20-40% movers in near term for our clients and consistently moving from one stock to another.

Below are few stocks and technical view on them.

(Ilango)