Sensex snaps 3 day winning streak

Indian stocks ran out of steam on Monday amid an all-round selling, as disappointing results from Maruti and Jaiprakash Associates offset an upgrade of India's local currency rating by credit rating agency Moody's Investor Service.

"In what was a rarity in recent memory, India was one of the few markets in Asia that closed in the red, while the rest of the region posted decent gains in the wake of the mostly positive outcome of bank stress tests in Europe and Friday's rally on Wall Street," says Amar Ambani, Vice President, Research IIFL.

In the process, the NSE Nifty closed well below the 5,450 mark and the BSE Sensex barely managed to avoid a drop under 18,000.

Earlier, the Indian stock indices opened higher after only seven lesser known European banks failed a region-wide stress tests, but those early gains evaporated soon and the market turned lower. The market never quite recovered from there despite the Moody's announcement.

Elsewhere in the world, markets in Europe opened with slight gains but soon turned choppy amid doubts about the credibility of the bank stress tests. US stock futures too were pointing to a marginally negative start on Wall Street.

Finally, the BSE Sensex ended lower by 111 points to close at 18020 while the NSE Nifty lost 30 points to shut shop at 5,418.

Technically speaking the RSI in the Nifty chart pattern is trading in a broad range and now its trading at its lower trendline. breakout below the same might invite for shorts in the market. But that's going to be a short term phenomena. So need not worry in the market. It will be a buying opportunity.

Finally Nifty above 5400 Levels

Nifty has finally crossed its major resistance level of 5400 levels. This week Nifty closed at its 30 month high. Nifty in the past faced major resistance at 5400 levels and corrected heavily. But this time as mentioned in my last article also that the Nifty will cross the mark and move further.

FII buying in the last week helped the Indian markets gain and cross above at 30 month high. Sensex closed above 18000 levels and Nifty above 5400 levels. But the markets closed flat on the last day of the week in expectation that 10 out of 91 banks subjected to Europe’s stress tests are expected to fail according to a survey of investors conducted by Goldman Sachs.

Goldman said 9% of respondents expected a capital hike of less than 10 billion euros, 33% expect a hike of 10 to 25 billion euros, 35% expect a hike of 25 to 50 billion euros, 18% expect a capital increase of 50 to 100 billion euros and 5% expect a hike of more than 100 billion euros. Banks domiciled in Spain, Germany and Greece were expected to raise the most fresh capital, and the source of capital was expected to be split between the public and private sector, Goldman said.

More than 60% of the respondents believed the amount of capital raised would leave banks adequately capitalised, while the rest saw a capital deficit remaining. However, opinions were split on the performance of the sector in the three months following the test, with 38% expecting outperformance, 26% underperformance and 36% in-line performance, it said.

Nifty for the week closed at 5449 and Sensex at 18131. Nifty on the last day of the week closed marginally above with a gain of 7 points after making a high of 5477.50 and a low of 5435.15. Nifty in the daily chart has made a small hammer like pattern. Bears will surely try to short the market once again in expectation of some correction in the coming week. But as the Nifty has crossed the 5400 after a long time, so the Bulls will surely try to support the markets and as such there are no negative signal in the Indian markets. Nifty could go upto 5600 levels.

Last Weeks Call:-

Buy united Spirits above

Sell ACL with SL of 110. made a low of 107 and Sl triggered

Buy BOB with SL of 717.5 made a hig of 742.

Nifty in the correction mode

Personal View:-
Nifty is finding very difficulty in trading above 5400 levels. Even with the Gap opening today, Nifty could not stabilize above the 5400 levels. And in the post session Nifty is sliding down. Currently its trading at 5365 after making a high of 5416. Yesterday also in the Nifty chart a Doji pattern has been made at the top. We might see some correction till the time the Nifty closes above 5400 levels for atleast 2 days. limit ur open trades as the Markets have corrected after making a DOJI patter yesterday.

Sent at 15:21 on Tuesday

After a Gap of 2 years….

Indian market remained very volatile since last 2 years. Some lost some gained heavily.

For the first time since Jan 2008, markets have given positive breakout signal above 5400 levels. But at the end of the week Nifty closed marginally below the 5400 mark.

So finally the Indian Rupee has also got its own identity. The rupee joined a select band of currencies such as the US dollar, Pound, Sterling, Euro and the Yen that have their own symbols.

In my last article I had mentioned that the markets are looking strong to me and that proved to be true. Nifty in a week closed above 5400 levels despite of profit booking by Local MF’s and Insurance. MF & Ins are being booking profits in many frontline stocks, but the markets are eyeing higher levels.

In the current week Indian brousers surged almost 0.7%. But Midcap and Small cap stocks performed better than the other major Indices. Small cap Index was up almost 2% and Midcap 1%. Frontline stocks that helped Index rally were TCS 8%, Tata Motor 8%, Axis Bank 7%. But there were some losers also. Like Infosys, Maruti and Bharti shrinked the rally by losing nearly 3.5% each. In the major looser was MNM which dropped 5.5%. Reality index was up almost 6%, Unitech 9%, DLF 8%, TCS 8%. Banking stocks too performed well in the current week. Bank nifty gained 3%. Capital Goods Index was up 2.5% whiled Oil Index lost almost 1% after a sharp rally seen in the last week. Deregulation of Diesel prices marked the correction in the Oil marketing stocks. Bpcl lost almost7 %, Gail 6.5%.

In the mid cap and the small cap stocks landmark Property rallied the most by gaining 70 in a week, followed by Onward tech 28%. In the Eduucation stocks Educomp surged 15%. DCB was up 9%, HDIL 6&, Hind motors 11%, Rallis 10%.

TCS surged 6.6%, reacted to better-than-expected Q1FY11 numbers. It reported net profit was at Rs 1,844 crore and net sales were at Rs 8,217 crore as against expected net profit at Rs 1784.39 crore and revenues at Rs 8079.6 crore.

Technically speaking, if we check in the line chart of Nifty we clearly see that the Nifty has given clearly indication of breakout through the inverted Head and Shoulder pattern. In the last weeks article also I had mentioned that the Nifty weekly chart is showing good strength and breakout.

As mentioned in the earlier article also that Nifty is taking good support at its 20DMA, and this week bounced back from the same levels and closed marginally below the 5400 levels. Nifty if closes above the 5400 levels, may take the Index to higher levels. Nifty will face resistance at 5428-5477-5549 levels.

FII’s remained net buyers to the tune of Rs.2700 Cr. While DII’s continue to book profits with Net selling of Rs. Rs1860 Cr ( till Thursday ).

Markets are still bullish and will continue to remain till 5600.

Last Weeks close:-

BUY Axis bank above 1280 SL 1262. Made a high of 1368 in the week.

BUY Maruti above 1431. Did not trigger the price.

This Weeks call:-

Buy United Spirits above

Sell Ambuja Cement with SL of 110.

BUY BOB with SL of 717.5.

BUY Drreddy close above 1497.

Whats gonna happen with the BANDH…..

Actually nothing going to happen with the Bandh declared by the BJP and the Shivsena people. According to me its just another way to harass common people. Private vehicles remained offair while the govt agencies remained opened. The bandh was declared to protest against the rising inflation. But did the party people think about the common people who live on daily wages. Did those people have been compensated for the same. There are many other things to be protested for….. Think….

I just remembered the article which I had written in the month of March 10. Viewers can view the same on the below mentioned site address. Topic is GOLD, Sugar & IIP,

http://technicalsvishaldangaich.blogspot.com/2010_03_01_archive.html

In that I had mentioned that personally I like Silver far better than Gold. As this metal is also on the verge of extinct. Production has drastically fallen down. But still the prices have been constant. Use of this precious metal is much more than the Gold. Its been used in almost in everything from cell phones to Ipod to solar panels telescopes, mirrors, batteries, and even in purification of water. It has a very good anti bacterial qualities. So the product which is used in almost everything and the production has fallen and the inventories have fallen down from 10bn ounces in1940 to 1bn ounce, will surely see a wild movement in the near future. Prices of Silver have not surged as the way the Gold prices have shoot up. Buy Silver is the only mantra now…..

As mentioned in my earlier article also that the Indian markets are looking good to me. Technically in this week the Nifty chart pattern showed some correction below the trendline and the same was seen in the last week. But as mentioned If Nifty breaks below its 20DMA might trigger selling pressure, but the same could not happen as Nifty took good support at its 20DMA and bounced back sharply.

Markets were very volatile this week. Global markets have been supportive this week. Indian markets gained almost 2%. Nifty which closed at 5237 in the last week closed higher at 5353 for the first time since April 2010.

In the Daily chart of Nifty we can clearly see that the pattern which is marked in the rectangle box No1. shows that the Nifty faced resistance at 5350-5385 levels, and currently the Nifty is trading in the same band. In the month of April Nifty made a high of 5399 and had fallen down to 4786 levels. Since then the Nifty have made the bottom and have surged. Rectangle box No.2 shows that the Nifty has made a low of 5225 levels i.e at its 20DMA and rallied from there. This time the Nifty will surely break the 5400 level mark. Market people are waiting for the correction to happen, but according to me the correction will not happen and the markets will continue to rally. MACD is also showing positive trend. Nifty had taken good support at the trendline 2.

In the weekly chart also Nifty is showing good positive signal. The chart is marked with the broad trendline which indicates that the its trading in the broad range. Breakout above the same will take the pattern to the new levels. Trendline 2. in the weekly chart shows that the Nifty faces stiff resistance at the same and had corrected after approaching the same. But this time I personally feel that the Nifty will surely break above the same move forward. Close above the same will take the Nifty to 5428-5477-5549 levels.

Hold on to your long position and wait for the breakout.

Last weeks call.

Few weeks before I have given call on RNRL to buy for the risky traders.

Sell Infosys below 2718. Did not trigger the price low was 2720.

Buy Boc India cmp 291. Long term, hold on.

This weeks call.

BUY Axis bank above 1280 SL. 1262.

BUY Maruti above 1431.