ALL THAT GLITTER IS NOT GOLD

ALL THAT GLITTER IS NOT GOLD

As everyone knows that “All that Glitter is not gold”. Indian markets were near their all time. FII’s flows were very positive since the last month. Markets continued its northward journey. Gaining nearly 500 points in a single day, everyone thought that the markets will definitely make a new high in the current week. But this did not happen. Rally seems to be halted for a while.

As per the Wave theory the rally which started from 5100 levels continued to make a high of 6284.10. (See the Chart attached with). In the fifth wave Nifty rally should have been over at 6296.80 levels and Nifty in the week made a high of 6284.10 and then corrected. If this is true, then the downward journey should first have a target of 5601 levels. But that will entirely depend on the flows in India. Retail customers have been booking profits on back of the coming Coal India IPO, so as the big institutions too. Rally will more depend on the coming results season too. As mentioned in my earlier also that the Nifty if corrects will directly halt at 6073-6035 levels. And so here we are. Nifty closed at 6602 down 115 points on the last day of the trading session for the week. Sensex lost nearly 375 points, but some how managed to close above 20000 mark.

Government will do the good to keep the markets moving upwards as they do not want the India’s mega IPO to get a lackluster response. Coal India is offering nearly 66.33Crs shares at a price band of Rs.225-245 a share to raise Rs.15K Cr.

Indian markets witnessed slight correction. Major Indices corrected nearly 0.8% in a week. Midcap & Junior Index too corrected 0.50% & 1.80%, while Small cap index also only the Index which managed to close above almost 1.2%. Heavyweights corrected in the week. SBI after its rally in the last few weeks corrected nearly 2.8%, Axis bank closed down by 4.5%. Lnt, Dlf, Rcom corrected in the range of 2-3%. Hero Honda by 3.4%, Ntpc by 4.7%, Bpcl by 6.8%. Fertilizers stocks seems to have their best trading days after a very long time. Chambal fertilizer rallied 25%, Rcf 27%, Nagarjuna Fertliser

14%.

Dark clouds are still not out of the American people. Jobless claims continued to rise. At the same time, record high imports form China helped pushed the US trade deficit wider in Aug, while rising food and energy prices pushed inflation at the wholesale level up twice as fast as expected last month.

On the first day of the week markets, but ended with a deep cut. Nifty made a high of 6284 but closed below at 6062 after making a low of 6050 levels. Sensex which was just few hundreds below its all time high corrected and closed at 20125 levels after making a high of 20854. On Wednesday Sensex rallied almost 500 points the best in last 8 months. But corrected immediately after that. In just 2 trading sessions Sensex lost almost 560 points. On Wednesday almost everyone in the markets thought that the Sensex will make its all time high within 2-3 trading session but the dreams could not be fulfilled. Nifty closed at 6062 for the week.

In the last article also, I had mentioned that the RSI is trading in an overbought zone and the correction is insight. And here we are down from the overbought zone. Nifty below 6030 levels will continue to fall till 5930. MACD also gave sell signal as mentioned in my last article. Nifty in the weekly chart has shown signs of fatigue and indicates some more downtrend.

Last weeks call:

Short Tatasteel tgt 605. Below 625. SL 634. Made a low of 625 but did not trigger.

Buy Reliance only above 1055 tgt 1075++ made a high of 1081. tgt achieved

Sell Bhartitele below 350 tgt 333. SL 359. Made a low of 330. tgt achieved

This weeks call:

Sell Acc below 996 tgt 968 SL 1005.

Sell Ashok Leyland below 74 tgt 71-68. SL 75.70

Sell Axis bank below 1495 tgt 1450. SL 1525.

Sell Bharti Airtel Tgt 323 SL 336.

Sell Cromptom Tgt 305 SL 318.

Sell Gmr Infra tgt 52 SL 56.15

Sell Hdfc bank below 2380. SL 2400.

Buy Hdil only above 279.90.

Sell Icici bank below 1124 tgt 1100.

Sell Lic housing tgt 1347 below 1380.

Sell Pnb tgt 1269-1265.below 1298.