This article was written on 27^th Jan and the levels mentioned are based on the 27^thJan levels.

Nifty continued its downward movement. This week as the Nifty ended its Jan F&O series, Nifty spot fell below the long term support levels of 5700 once again. Nifty and Sensex lost more than 8% in the Jan series. Most of the frontline stocks lost heavily as the Nifty slide continued. Heavyweights like Bajaj Auto lost 14%. HUL which is normally considered the stock with rock solid performance lost nearly 13%. Jsw steel and Sail shred 18% & 12% respectively. In the Reality space Unitech and DLF lost 17%. Ongc tanked more than 14% in the Jan series alone. Hdfc and Icici bank also lost in the range of 10-12%. Sterlite lost 10%.

Finally as expected FM have mentioned that the government will not be questioning the Black Money lying in the Swiss Banks. The Black money can be brought back to India with a tax payment here. I really could not calculate the benefit achieved by doing this. It seems that Indian politicians are aware of the people and the amount kept in the Swiss Banks but they do not want to disclose. This might reveal most of the highend Netas name too….

Banks which gained the most in the last week, slipped down this week on the as the Reserve Bank of India (RBI) on Tuesday increased the key policy rates by 25 basis points (bps) each, as the central bank steps up its efforts to tackle a stubbornly high inflation at the cost of some moderation in economic growth.

The repurchase rate (repo rate) has been hiked by 25 bps to 6.50%, while the reverse repo rate has also been increased by 25 bps to 5.50%. The central bank also extended the 1% leeway in the SLR up to April 8. CRR has been left unchanged at 6%.

The inflation target for FY11 has been increased to 7% from 5.5% earlier while the GDP forecast for the current fiscal year has been kept steady at 8.5% with an upward bias.

In the last weeks article I had mentioned that the Nifty will face resistance at 5725 and levels and fall below the 5662-5639 levels may take it to 5580 levels. Nifty on the close of the Thursday’s close fell down to make a low of 5593.70 but close marginally higher above 5600 levels.

Nifty have slipped below its 38.2% retracement levels and close at 5607 after making a low of 27^th Jan 2011. Nifty closed below its 200DMA. The fall will continue till 5540 levels. Close below the same will take the nifty to 5488-5400 levels. Nifty is not at all in the mood to trend upwards. Rolls have been way below the average. Volumes have been vanishing from the markets. Nifty in the short term may trigger 5400 levels.

Nifty have been in the sell mode since when it closed below the 5700 levels. These have been mentioned in my last few articles also. The above mentioned levels are just the small support levels where we might see some pull back coming and then sell off at the end. These levels are for the traders who want to take some short term positions.

Last Weeks Call (prices as of 27^th Jan 2011)

Short United Phos below 151 SL 153 tgt 146-142. Target still not achieved.

Buy Union Bank above 328 SL 323 tgt 333-339-342. 2nd Tgt reached. Made a high of 340.

Short Torrent Power below 235 SL 238. Buy if closes above 241.50. Made a low of 230.50.

Sell Tata Motor Close below 1182 SL 1192 tgt 1172-1162-1141. 2nd Tgt reached. Made a high of 1160.

Buy Tata Motor only above 1210. Did not trigger the levels.

Buy SBI with SL of 2590 tgt 2610-2634. Made a high of 2737.

Buy SesaGoa with SL of 330. Made a high of 344.

Buy Relcom above 138 small resistance at 139. with SL of 134. Did not trigger the levels.

Sell PNB close below 1125. SL 1133. Made a low of 1102.

Buy Icici bank above 1069 SL 1063. Made a high of 1092.

This Weeks Call

Sell Adani Ent close below 612 SL 618 tgt 600-590-584.

Sell Ashok Leyland close below 58. SL 60 tgt 55-53.

Sell Asian Paint below 2600 tgt 2575-2547.-2520.

Sell Hdfc Bank below 2030. SL 2049.

After the Dubai bailout, Arab leaders are also moving forward to finally implement a proposed $2billion program to revamp the faltering economics across the region amid fears of protest over high unemployment, rising prices and rampant corruption, such as those that brought down Tunisia’s government.

Nifty is finding it hard to cross over above the 5700 that is around its 38.20% retracement levels. Nifty took support at its lower Bollinger band but failed to close above the 5700 levels on weak on weak basis. Nifty is almost close to it’s over sold zone.

RIL- 3Q FY2011 Results – in line with street estimates, marginally lower than our estimates.

Bottom-line at Rs51,360mn v/s our expectation of Rs53,142m and Street estimate of around 5,1890m. Topline at Rs597,890mn as against street expectation of 6465,620 m and our expectation of 6,03,030 m. Other income higher than estimates expectation was Rs 5410 m.

Banks were the flavor for the week. Banking stocks outperformed the markets. Last 2 days banking stocks were in light. Bank Index jumped 4.2% out performing rest of the stocks. Axis bank closed 7% higher, Sbi gained 3.8%, BOI gained them most by 10.5%. Kotak Bank was up 4%, Dena Bank 8.5%. Sensex and Nifty closed marginally higher, recovering just 0.7% on week on week basis after the sell off in the last week. IT Index surged 3%, while Metal Index was up more that 2%.

Sail which close at its 52 week low in the last week closed higher 3.8%. Bajaj Auto who came out with results gained nearly 5%. Hcltech too gained nearly 6% after the announcement of its 3Q results. TCS gained 8%. M&M gained 4%. In the Midcap space Shree Ashtavinayak gained nearly 30% after the sellers turned Buyers in the week. Lloyd steel once again saw some buying as it used to see before the 2008 meltdown. Stock rallied 25% in a week. Rumors in the market that the stock can touch Rs.40.

After the SEBI barred Anil Ambani to trade in the securities market for a year. ADAG stocks seem to have a free fall on the brousers. Rel infra sinked 7.5%. Relcapital lost almost 5%. Oil Index lost 2.3%. Ongc lost nearly 6.5%, Gail close down 7%. RIL lost 1.5% before the announcement of the results. Capital Good closed down 2%. Lnt close down 3.5%. Hero Honda tanked 3.5% while Bharti Airtel lost 2.5%. HCC tanked 8% while GVK project lost 6%.

Nifty for the upside move have to close above the 5750 levels. Till that time Nifty will trade in a narrow range of 5650-5750 levels. Nifty will continue to face resistance at 5725-5750 levels. At the lower levels Nifty will find support at 5662-5639 levels. Nifty if closes below 5639 then the levels that could touch is 5600-5580 levels.

Gold seems to be in the correction mode now. Buy silver in correction…

Last Weeks Call

Short AB nuvo below 738 SL 745 tgt 724-708. 1^st Tgt reached. Made a low of 719.

Short Andhra Bank below 128 SL 130 tgt 123-119. Made a low of 124.

Short Axis Bank below 1198 SL 1215 tgt 1156-1150. Did not trigger the sell price.

Short Bharat Forge below 348 SL 352 Tgt 350-341. 1^st Tgt reached. Made a low of 342.

Short Cipla below 339 SL 344 tgt 335- 330. Did not trigger the sell price.

Short Cummins below 708 SL 711 tgt 697-690. Did not trigger the sell price.

Short Hdfc bank below 2050 SL 2055 tgt 2030-2010. Did not trigger the sell price.

Short Icici Bank below 1013 tgt 1001-995. Tgt reached. Made a low of 993.

Short PNB below 1108 SL 1120 tgt 1091-1080. Did not trigger the sell price.

This Weeks Call

Short United Phos below 151 SL 153 tgt 146-142

Buy Union Bank above 328 SL 323 tgt 333-339-342

Short Torrent Power below 235 SL 238. Buy if closes above 241.50.

Sell Tata Motor Close below 1182 SL 1192 tgt 1172-1162-1141.

Buy Tata Motor only above 1210.

Buy SBI with SL of 2590 tgt 2610-2634.

Buy SesaGoa with SL of 330.

Buy Relcom above 138 small resistance at 139. with SL of 134.

Sell PNB close below 1125. SL 1133.

Buy Icici bank above 1069 SL 1063.

Bear control. FINALLY!!

Finally the Government had given the intimation that it cannot control the inflation. HAHA how so the government realized it. After so many exports now Indian government have started importing the same thing again back in India. The big example is Onion.

Bears have totally got in control of the market. Nifty dropping and closed below 5700 and Sensex below 19000 levels for the first time since Sep 2010. This writer in the last few article has been constantly informing the readers about the impact on the market when Nifty will break below 5700 levels. Nifty finally closed below its long term support levels of 5700 and closed at 5646.

Last weeks trading session was clearly based on the technical moves. Fall from the high of 6178 on 3^rd Jan 2011 which was near the long term trendline (marked in chart), nifty within few 3 trading session closed below the 23.6% retracement and the fall continued to find support at its 38.2% retracement levels as per the Fibonacci Theory.

Indian indices tanked for one of the worst levels since Sep 2010. Nifty and Sensex closed down nearly 4.5% in a week. Midcap & Smallcap Index closed down in the range of 3-4%. Capital Goods, Bankex and Real Estate index lost over 5% in week. IT Index and Metals lost around 3.5%. In the banking space Hdfc bank tumbled down more then 10%. Banking stocks lost their grounds in fear of the rate hike by RBI (informed in last article). Hdfc Ltd lost 6.4%. Ril close down 6%. Sail after its tragic fall in the Net profit closed down at its new 52 week low. Sail planning for FPO in the coming month. Kotak bank too lost 9%, Idfc 8%. Tata steel fell 6% just few days before the open of its FPO. Infosys after its lackluster results tumbled down 5% in week. All eyes are now on TCS results. Lnt lost 8%. Hdil fell 11%. Zee announced its results this week. Icici bank tanked 4%.

The Chinese government will surely be in severe pressure to devalue Yuan against Dollar after the formers trade surplus narrowed in 2010for the second straight year. China still remains the largest car producer in the world. European Central Banks threw Portugal a temporary lifeline on Monday by buying up its bonds as market and peer pressure mounted for Lisbon to seek and international bailout soon.

Industrial growth slumped to an 18 month low of 2.71% in Nov 2010 as compared to last year’s 11.3% in Nov 2009 coupled with the high inflation pressures, impact of interest rate increase and a modernization in export growth all weighed down IIP growth during the month.

In the last week Nifty close below its 23.6% retracement. Nifty in the current week decisively closed below the 5700 levels. Nifty tried to close above the long term trendline but could not do so. In the last Nifty closed below its 50DMA and continued the fall to close at 5646 levels. Nifty will find support at 5639-5590-5540. 5540 is again its 50% retracement levels. Close below the same will take the Nifty to 5400 levels. On the upside the Nifty will face resistance at 5800. Nifty will find support at is 200DMA.

Last Weeks Call

Sell Infosys below 3350 with SL of 3357. Made a low of 3185.

Sell Rel Cap with SL of 637 tgt 625-615. Tgt reached. Made a low of 595.

Sell Hdfc Bank below 2265 SL 2271 tgt 2240-2220-2208. Tgt reached. Made a low of 2030.

Sell Ambuja below 127 SL 128.50 tgt 126-121-119. 1^st tgt reached. Made a low of 123.7.

Sell Andhra Bank below 141 SL 141.50 tgt 138-134. Tgt reached. Made a low of 129.

Sell Axisbank below 1276. SL 289 tgt 1263-1245. Tgt reached. Made a low of 1195.

Sell Biocon below 400 tgt 395-391. Tgt reached. Made a low of 375.

Sell Canara bank below 602 tgt 585. Tgt reached. Made a low of 547.

This Weeks Call

Short AB nuvo below 738 SL 745 tgt 724-708.

Short Andhra Bank below 128 SL 130 tgt 123-119.

Short Axis Bank below 1198 SL 1215 tgt 1156-1150.

Short Bharat Forge below 348 SL 352 Tgt 350-341.

Short Cipla below 339 SL 344 tgt 335- 330.

Short Cummins below 708 SL 711 tgt 697-690.

Short Hdfc bank below 2050 SL 2055 tgt 2030-2010.

Short Icici Bank below 1013 tgt 1001-995.

Short PNB below 1108 SL 1120 tgt 1091-1080.

Inflation burns the pocket now…

Food inflation in India has surged to 18.32%. It surged to its high peak in the last one year. Food prices last month exceeded the level of the crisis of 2008 when a dramatic rise in agricultural costs sparked riots in over 30 countries.

Sharp recovery in the last week has been suddenly wiped out with the sell off in the Indian markets. Markets tanked for nearly 4%, the most sell off came on the last day of the trading session. Last weeks sharp rise, confirmed many people that the markets are in a good mood and the run will surely continue for some time. But nothing happened like this. Markets tanked on rising inflation and to control that the RBI may hike rates before the Policy Review.

The last week’s article named “Sensex 25000” seems to be realistic but there is still more time to see the actual figure. Indian markets tanked nearly 4% in a week. Midcap and the Smallcap Indices too sinked nearly 4%. Selling in the frontline stocks by the FII and the DII triggered the sell off in the Indian markets. Frontline stocks tumbled down in the range of 5-10% in a week. The major looser was the Auto Index which lost almost 7.5%. Bajaj Auto after the downgrade by CLSA tanked almost 15%, while Tata Motors lost 9%. Hero Honda and Maruti close down nearly 6%. Real Estate and the Bankex closed down 6.5% each. DLF contributed the most to the sell off, falling almost 8%. In Banking stocks Icici and SBI shrinked in the of 7.5-8.5% range while Hdfc lost 6%. Indusind and Yes bank collapsed 14% in a single week. Capital goods Index lost 4.8 while Metals continued its downward journey in 2011 also. Metal Index sinked 3.5%. Lnt closed down6.5%. Hindalco and Sterlite Ind closed down in the range of 5.5-6%. Jindal steel lost 14%. IT Index lost 2% and Oil & Gas Index lost a percentage. Hcltech closed down 2%. Ongc & Bpcl lost almost 6%.

The possible trigger for sell off in the Global markets could be because of possible worsening of European Sovereign crisis. Chinese policy makers rising key rates to tackle the rising inflation. The stock market is highly overvalued. It follows then that stock investments are nearly guaranteed to deliver poor, long-term returns. The rally since August 2010 isn't based on sound and sustainable economic factors, but on unsound and fragile faith in the Fed's ability to inflate asset prices. Stocks are extremely overbought when momentum indicators and the number of stocks reaching new 52-week highs stay below their cyclical highs, thereby not confirming the current run up. There is a debt crisis brewing, not just in Europe, but also in Japan and the U.S. The financial sector's problems have not been solved, but only papered over with money printing. In China a huge bubble economy has developed. Since Beijing has already implemented a turn in monetary policy, this bubble is prone to pop in 2011, posing a major threat for a still very fragile global economy.

Technically speaking rise gave trigger to buying spear. But the positive divergence changed to sudden selloff and the positive divergence once again changed drastically. Nifty as mentioned in my earlier article faced resistance at 6180 and fell from the same levels. Nifty made a high of 6178.55 and low of 5883. Sensex lost more the 500 points on the single day to close at 19691.On Thursday Nifty closed below the long term trendline. On Friday Nifty once again close below its 23.6% retracement levels. Nifty tanked below its 100DMA on the last day of the trading session for the week. Nifty immediate support at 5855-5800. Close below the same at 5800 Nifty will trigger selling pressure till 5700 levels.

Last weeks Call

Buy Ashok Leyland with SL of 62.25. Made a high of 68.75.

Buy Axis Bank above 1354 SL 1345. Tgt 1365-1370-1384. Made a high of 1776.

Sell Bpcl below 656 with SL of 661. Made a low of 614.

Sell DrReddy below 1662 SL of 1676. Made a low of 1636.

Buy Hdil SL 188. SL triggered

Buy Ibreal SL 127. SL triggered

Sell Infosys below 3430 SL 3440. Made a low of 3356.

This Weeks Call

Sell Infosys below 3350 with SL of 3357.

Sell Rel Cap with SL of 637 tgt 625-615.

Sell Hdfc Bank below 2265 SL 2271 tgt 2240-2220-2208.

Sell Ambuja below 127 SL 128.50 tgt 126-121-119.

Sell Andhra Bank below 141 SL 141.50 tgt 138-134.

Sell Axisbank below 1276. SL 289 tgt 1263-1245.

Sell Biocon below 400 tgt 395-391.

Sell Canara bank below 602 tgt 585.

SENSEX 25000

I wish all the readers a “HAPPY AND A BULLISH NEW YEAR.”

In 2010 Informed investor had given me an opportunity to share my views in a conference organized at Thane and my topic was SENSEX 25000. That time the nifty was trading at 5500 odd levels and Ril Ind at 950 odd. When I started the seminar the topic raised many eyebrows about the figure. But I was successful in answering them. I had given nifty target of new high and sensex at 2500 within a year. Nifty made a high of almost 6300 levels. I hope this year we shall see new highs in market.

2010 proved to be very good for some many people but at the same time has been one of the nightmares to some. CWG scam, 2G scam and lot more are now in public. The peopled linked with the scams have surely been made a killing on their Income. No doubt if the Indian markets have just given a return of 15%, but some have turned up multiple times also. But at the same time many people have tasted dust too. Investors who are stucked up with the midcap and smallcap stocks are still trading at their lower circuit levels after their names announced in connection with the stock operators.

Indian equity markets have gained almost 15% with the highest ever FII inflow. FII inflow for 2010 totaled to $28.8bn. On the MF side saw an outflow of nearly $7bn. But Domestic Insurance saw an inflow of $11.5bn. Only Metal index gave a negative return while the other entire index gained in the range of 20-50%.

Crude prices have gained 13%. Silver has gained the most in the precious stone side. It gained nearly 80% while Gold gained just 28%. This reader had suggested buying SILVER at $16. Now it’s almost $30. The Bull Run will continue the same way with some hiccups.

China to control its rising inflation raised the Interest rates on Last Saturday, the second rise in just over two months. The Peoples Bank of China said it would increase the lending rate by 25 bps and deposit rate also by 25 bps.

Inflation in India is been a major concern since a long time. Rising commodity prices lead to the rising inflation rate. Crude Oil prices are on the run and will continue the same in the coming months. There will be no stoppage for the same, as there is no immediately alternative available in such a big quantity.

Coming month once again we will witness volatility and stock specific movements on back of Quarter 3 results. Banking stocks will be in limelight.

In the metals sector, a trader will think gold and silver will be good performer sin 2011, but industrial metals like lead, zinc, copper, nickel and aluminum are more likely outperform than others. The world is running in to potential supply shortages in copper and nickel, demand remains strong.

In precious metals, platinum is also undervalued with relation to gains of gold and silver.

Gold is up more than 28% in 2010 and silver 81% but platinum is only 16% up while copper gave gains of 24%. Investors purchased gold and silver primarily as safe havens for inflation hedge. China has been buying and maintaining stock of copper which is used in wiring, cable and plumbing has a great potential for global growth. London Metal Exchange copper future hit a new all time high in December.

An aggressive pick is crude oil, the world demands more and more. An investor will see some significant appreciation in the coming next year for such reasons. The record high price of 2008 may not be seen in the near term, but technically, crude looks bullish for the coming year. On the other side, OPEC seems happy with higher prices and doesn’t look to change production levels, where as demand from emerging markets and low interest rate environment will have lead to addition in demand in US and the world.

Technically speaking Nifty has given breakout on the upside. As mentioned in my last article that the Nifty chart has shown some positive signs. Nifty had taken good support at its 23.6% retracement levels and bounced back. Today it has closed above its long term trendline. Last week MACD has given positive divergence. And this week Indices gained. Nifty closed at 6134. Sensex closed at 20509.

Nifty will face resistance at 6145-6180 levels. It seems that the Nifty is now in a new territory and the run will continue for some more weeks. Nifty chart suggests that now it’s in the making of a “W” recovery. It has breakout above its trendline and looks firm. Nifty might in the coming weeks may cross.

Last weeks Call

Buy SBI with a SL of 2730 tgt 2792-2805. Tgt reached, made a high of 1827.

Sell Ultratech Cement below 1040 SL 1045 tgt 1030-1018-1007. Did not trigger.

Sell Torrent Power with SL of 270. SL triggered

Sell Tata motors belo 1303 SL 1307 tgt 1286- 1269. Tgt reached, made a low of 1252.

Buy Suzlon above 51 SL 49.50. Made a high of 55.35

Buy Sunpharma above 470 SL 467. Made a high of 490.

Buy Relcapital With SL of 641. Made a high of 672.50.

Buy Rcom with SL of 132. Made a high of 146.35.

This weeks call

Buy Ashok Leyland with SL of 62.25.

Buy Axis Bank above 1354 SL 1345. tgt 1365-1370-1384.

Sell Bpcl below 656 with SL of 661.

Sell DrReddy below 1662 SL of 1676.

Buy Hdil SL 188.

Buy Ibreal SL 127.

Sell Infosys below 3430 SL 3440.