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.

My friend and I was discussing about the markets on last Sunday. I showed him my last article that I had written in the Informed Investor and he was really surprised to now that the markets were actually surging ahead on the rumors that the Ambani brothers may reunite. Then I explained him that it is not the only reason for which the Indian markets were flourishing. Global markets too faired pretty well in the last week that gave some support to our markets.

Finally the RIL agreed to supply gas to RNRL 8mmscmd/day for 17 years at USD 4.20/mmBtu. It is also learnt that pact entails gas for 8400 MW for power. He asked me a very simple question as in why did RNRL agreed to buy gas from RIL now on the said price, when few months back they did not??? I did not have any answer for the same. He pointed out on the various block deal happened in RIL few months back or else this is just the beginning of the reunion session between the Ambani brothers. My friend told me “ Its better we don’t talk on this complicated matter as of now. Tell me about the future of the market and why did it bounced back in the last week.”

I started my conversation with a big sign of relief as actually talking on the topic of the A’ brothers were very complicated. I told Yeah its better we shift our focus on something else as this matter “God only knows or they themselves”. As we all know that the EU countries are facing the problem and everything is been discounted by now. Global markets bounced back in the last market so did ours. There has been no slowdown in the Indian markets now. Expect the Rupee depreciating there is no other issues in the Indian markets. He paused and asked me “Don’t u think the depreciated rupee will effect the Indian markets?” Yes surely, but still the markets are not looking that bad to me.

He asked “What do u think about the Inflation in India?” I said “That is the 2^nd most talked matter about. Headline Inflation measured by the WPI, has entered the double-digit zone, raising the possibilities of further tightening by the RBI. The numbers released estimated inflation at 10.16 per cent for May, compared with 1.38 percent in the year-ago period, driven by higher fuel and primary article prices. In April, inflation was estimated at 9.59 per cent.

He said now the inflation will surely sky rocket now. I was confused and asked him why are u saying that? He said the deregulation in the fuel price will surely hit the inflation now. On Friday Government decided to free petroleum products. petrol got costly by Rs 3.50 per litre, diesel by Rs 2 per litre, kerosene by Rs 3 per litre while LPG will be hiked to Rs 35 per cylinder.

Rise in the Petroleum product prices will take the inflation rate soaring. I said “As the rising inflation is known by almost everyone and that the Rate hike is also on the cards now, as mentioned in my earlier articles”.

My friend was very keen about how will the Indian markets trade technically in the coming week. Last week Indian markets faired pretty well but this week markets corrected few points. On the opening day of the week markets rallied and closed in green. Nifty after making a high of 5367 closed in red for the week. I showed him my last weeks article that mentioned that the Nifty will rally and will be in the new range of 5325-5375 levels and will face resistance at 5375 levels. This journey will not be so easy. I showed him the technical chart of Nifty. And showed him that the road between the 5200-5400 is rough. Sellers become active in this range. We have seen profit booking happening in this range. I told him we might see some correction even in the next month. Except the global problems, we do not see any issues in the India markets, so we might not feel the heat as the global markets are feeling.

In the chart we can clearly see that the Nifty fell down from the levels mentioned in the last article. Nifty may continue to fall till the time it reaches the trendline below. Break below that levels may spoil the chart pattern and we might see some more correction. That will be only technical correction. Otherwise the Markets are good. RSI had bounced back from the low from the over trading zone to the over bought zone. But in the weekly patter the Nifty had made a small Doji pattern that might call for some correction.

I showed him the Nifty movement from the month of June 2009 to June 2010, which is trading in a Island pattern. Breakout either side will call for very fast movement. The range is 4800-5400. Currently the nifty closed at 5268 after making a high of 5368 levels.

My Friend thanked me for sharing all this information with him. He seemed to be really interested in the topic but his face showed that he was little confused.

Call for the week.

Sell Sesa goa below 365.

BUY Sesa goa only above 385.

Sell ICICI bank with SL of 866.

Only Ambani’s needed in India……

I wish we had some more Ambani brothers…

Yes that’s true. It seems that the Indian markets needed only Ambanis’. The rumors about the Ambani brothers getting together sparked the Indian markets in the week. Mukesh Ambani and ADAG lead stocks rallied the most. Since last 15 to 20 days, I could read only ambani brothers stories in all most all the news papers. Markets men talking only about the Ambani brothers. Major activity in the Ambani brothers companies were as follows.

30 May: Anil Ambani stays at RIL's Sri Krishna Guest House at Tirupati.
31 May: R-ADAG and US-based CBS Corporation to form an equal stakes joint venture to launch a network of television channels.
1 June: MTN and RCOM to resume merger talks.
Shares of JM Financial Asset Management rise on speculation that RIL is considering buying a majority stake in the firm.
2 June: RIL likely to make big-ticket investments in coal-based power plants.
3 June: RCOM likely to sell a strategic stake to fund 3G spectrum acquisition.
Etisalat, AT&T and MTN said to be interested in RCOM stake.
7 June: RCOM board approves a 26% stake sale. The company will also explore M&A opportunities.
8 June: Anil Ambani drops a Rs10,000-crore defamation case against Mukesh Ambani.
10 June: RIL drawing up plans to enter telecom space.
Reliance Power acquires three coal mines in Indonesia for Rs 7,520 crore. 12 June: RIL enters the broadband space, acquiring 95% in Infotel, a big winner in BWA auctions, for Rs 4,800 crore.
13 June: Ambani brothers and their families vacation together at the Kruger National Park in South Africa.
14 June: RIL board approves the group's entry into pharma, power and financial services.
ADAG might buy Star India's 25% stake in production house Balaji Telefilms.
15 June: RCOM board approves restructuring its tower-owning unit, Reliance Infratel, into an independent company. American Towers, GTL and a consortium of Crown Castle and Blackstone, in talks to acquire the unit.
16 June: Reliance Capital (R-Adag) to buy 18% in Bloomberg UTV.
17 June: RIL considering acquisition of a 26% stake in Fortis hospital chain.
RCOM considering selling a 26% stake in its wholly-owned subsidiary Reliance Globalcom.
Mukesh Ambani might invest in R-ADAG firms, including RCOM.

Indian markets surged almost 3 % in the week. Nifty on Monday closed above its resistance level of 5175-5180 levels. Next day the same was broken and the Nifty closed above the 5200 levels after taking support at 5170 levels. On Wednesday Nifty closed at 5233 levels.

In my last article it was mentioned that the Nifty closed above its 100 & 200DMA. Decisive broke out above the same can take the Nifty to 5250 levels. Close above the same will take the Nifty to its next level of 5325-5375 levels.

Its been seen in the past also that whenever the Nifty approaches the 5200 levels, markets men try to short the market in anticipation that the markets might correct. It had happened several times in the past. But this time the scenario is totally different. Nifty according to me will make new high and might cross the 5300 levels.

Yes I have mentioned in the past also that there are still dark clouds in the Global markets and for the Indian markets Inflation is a major concern, But there is no other bad news for create new pressures on the government and this might lead to increase in the interest rate.

On Friday the benchmark Nifty snapped the 7 day winning streak and closed in negative. Ambani brothers stocks lost the most triggering the sell off in the Indian markets. Nifty some how managed to hit the 5300 mark in the intraday trade but closed below the same at 5262. Sensex closed down 46 points at 17570.

Nifty has bounced back sharply from the over sold zone. And closed above its 200 DMA. Nifty resistance levels are at 5325-5375.

BUY Gillette Ind. Cmp 1678.

BUY BOC. Cmp 288.

Still there is lot of steam there in the company pricing. Both the stocks have surged in the near past. Wait for some correction and then buy……..

The only thing that is going in my minds since last few months is that, What will the Government of India will do with the Rs. 40000 Cr which they have planned to raise by selling the stake in their loss making company. The GOI have planned to rope in some investors to sell their 10% stake in the Hind copper ltd. But did anyone seen the companies balance sheet, the PE at which the company is trading. What ever said and done….. But where will the money go into. ALL the corrupt Netas of the nation????

Nifty on Monday closed above its resistance level of 5175-5180 levels. Next day the same was broken and the Nifty closed above the 5200 levels after taking support at 5170 levels. Yesterday Nifty closed at 5233 levels.

In my last article it was mentioned that the NIfty closed above its 100 & 200DMA. Decesive broke out above the same can take the Nifty to 5250 levels. Close above the same will take the Nifty to its next level of 5325-5375 levels.

Its been seen in the past also that whenever the Nifty approaches the 5200 levels, markets men try to short the market in anticipation that the markets might correct. It had happened many times in the past. But this time the scenario is totally different. Nifty according to me will make new high and might cross the 5300 levels.

Yes I have mentioned in the past also that there are still dark clouds in the Global markets and for the Indian markets Inflation is a major concern, But there is no other bad news for the Indian markets.

Welcome to the FIFA 2010 and Global crisis…….

64 matches will be played within 32 countries. $12.64bn amount world cup will pump into South African economy. 695000 Jobs will be created within 31 days of the tournament. 373000 visitors expected in SA. 3.3m spectators will be viewing the match LIVE. 26.3 bn TV viewer ship. With 214 countries watching.

Japan too in the race for bankruptcy… Just chill. There is still no news for the same. But the Prime minister of Japan has given indication about the increase in bad debts.

It’s been a Global recovery this weekend. Indian markets too followed the rally. But the fall in the initial days of the week treble the markets men. Nifty once again closed below the 200DMA but bounced back sharply to close above the 5100 levels. Positive global cues and buying in heavyweights like RIL and leading banks helped the markets to gain in the end of the week.

Markets corrected since the start of the week. As mentioned in my last article that the markets may feel some heat and Indian markets might correct in the coming weeks. Nifty even after closing in the positive zone on last Friday 04^th June, corrected heavily on Monday and Tuesday. Nifty made a low of 4967 below the 200DMA after closing 5135 on 4^th June. Sensex made a low of 16560.

Sensex almost rallied nearly 200 points on Friday but corrected in the post lunch session. The news in the markets was that the Japan Prime minister has hinted about the countries debt. But few articles back also I had mentioned about the debts of the various countries. There was nothing new in the news. It was just another round to panic the investors and trying to short sell or it may be some case of profit booking.

IIP grows17.6% in April vs 13.5% in March. The country’s IIP output rose for the 7^th month in April. There was strong growth in capital goods sector, which rose 72.8% from negative 5.9% on year on year basis. India's Index of Industrial Production (IIP) has maintained its double-digit growth rate for the sixth month in a row in Apr’10, backed by a strong growth in manufacturing and mining sectors, particularly capital goods.

The data enhanced the estimated growth rate for Mar’10 to 13.9% from the earlier 13.5%. The growth rate of the manufacturing sector surged 19.4% in Apr’10, as against 0.4% in Apr’09. The power sector fell by 6% in Apr’10, as against 6.7% in Apr’09. The mining sector grew by 11.4%, compared to the growth of 3.4% in Apr’09. Fifteen out of the 17 industry groups showed a positive growth in April, compared to the corresponding month of the preceding year. During April, the growth rate in six core-infrastructure industries, having a combined weightage of 26.7% in the IIP, was 5.1%, up from the 3.7% in Apr’09, mainly driven by growth in the production of finished steel, petroleum and crude oil.

Euro almost crashed to 1.20 as compared to dollar. Debts in the Euro countries are spreading like a Cancer.

Nifty is once again near its resistance level of 5150-5187 levels. This week also Nifty corrected from almost the same levels. Nifty closed above the 200DMA on Thursday. On Friday, Nifty closed above the 100DMA also. Nifty will continue to find support at the 5000 levels. Nifty will face resistance at 5180-5187 levels.

Is it recovery time or correction time???

Wow it’s been a great recovery in the Indian markets. From the low of 4786 in the last week, Nifty bounced back to close higher at 5000 mark once again. But the worry is still that, will the markets stabilize here??? Not only Indian markets, Global markets flared within the week. Indian markets closed higher for the week. On the last day of the week, European markets were trading higher but as the Indian markets closed the Euro markets tanked.

ECB said Euro Zone banks would need to make provisions for further losses of E90bn this year and E105bn in 2011, on top of some E238bn in debts written off by the end of 2009. After the Lehman Brothers collapsed in Sep 2008, the ECB began offering Euro zone banks unlimited, flat rate loans in a bid to revive inter-bank lending and keep credit flowing to the real economy. Last Friday Spain the 4^th largest Euro Zone economy saw its credit rating downgraded a notch by Fitch Ratings agency from the min AAA to AA+.

Nifty closed higher at 5135 after making a high of 5147. Nifty gained 1.3%. Sensex for the week gained nearly 250 points or 1.5% and closed higher at 17117 levels. Mid cap & the Small Cap Index were the star performer gaining 2 – 2.5%. Smallcap Index was up 1.7%. For the Index gainers ONGC contributed 5%, Ril infra, Rel Cap & Sbi by 4.5% each. Auto stocks flared gaining almost 4.4%. Maruti contributed 8.5%, MNM by 7 & Herohonda by 3.8%.

Telecom stocks did pretty well. Government made a killing by 3G Auction for Rs.68000 CR. But this created pressure on the Telecom companies. Companies raised money from the Banks to pay back the govt. But still the stocks pretty well on the brousers. Rcom surged almost 14% in a week on news that the company is in talks with Etisalat or Merger with MTN. Idea was also in the news that the Mukesh Ambani may take over Idea after the breakup of the agreement with the Ambani brothers. Bharti Aritel jumped 5.5%. Metal stocks were down. Stelite closed lower at 4.8%, JSPL by 3.8%. FMCG Index was up almost 3.6%. HUL surged 6.4% on back of Buyback news and ITC by 2.6%.

Rupee after making a low of 47.7 against Dollar, bounced back to 46.85 levels.

As mentioned in my last article that the Nifty might face resistance at the trendline and the same thing happened. Nifty tanked when it could not close above the trendline on the first day of the week. Nifty made a low of 4961 and closed below 200DMA. But bounced back sharply to cross over the 200DMA and the 100DMA. Nifty broke the 5^th wave and closed above the trendline. As mentioned in the last article the MACD may show some positive up move. RSI also showed strength when it was trading near the over sold zone.

Markets have bounced back sharply on back of Global markets recovery. Most of the markets a man have come in the positive route and expects the markets to continue the upside move for some more time. European markets closed higher on back of the bail out package. But the worry is still there in the global markets. Dark clouds are still there. Any bad news will spoil the sentiment of the Indian markets. Markets may correct in the next week.

Nifty will face stiff resistance at 5150-5187 levels.

BUY Relcap, close above 681.

BUY Infosys above 2735.

The Paris based Organisation of Industralised nations raises its forecasts for global growth to 4.6% in 2010 and 4.5% in 2011 from 3.4% & 3.7% after a contraction of 0.9% in 2009. Unemployment in 31 members countries may have peaked at around 8.5%. The OECD also said that interest rates should start rising by the end of the year in the US, the UK and Canada, as the global economic recovery continues.

The OECD raised its forecast for US economic growth in 2010 and 2011 to 3.2% each, from 2.5% and 2.8% in its forecasts of last November. Japan's growth will be 3% in 2010 and 2% in 2011, up from 1.8% and 2% previously. The euro-zone will lag with growth of 1.2% and 1.8% this year and next, still marginally more than forecasts of 0.9% and 1.7% announced in November 2009.

US bank exposure to the European Union as a whole was $1.5tn, but still the US guys are giving surety that the banks would not end up having trouble. Marketsmen are predicting a double digit in US.

Germany proposed naked short selling ban to include all German-listed stocks. Italy has also joined Europe’s austerity club with deep spending cuts.

We cannot rule out that we will not see another blood bath in the world markets. It may happen as Euro countries are facing a major financial crisis and the Euro is under pressure. Other key economies like China, Japan, the UK and the US also have their own set of issues to overcome.

Nifty for the week made a low of 4786. On Tuesday Nifty closed below the trendline but closed above the 4800 mark. As mentioned in my last article that the Nifty if closes below the 4800 levels may take it to the next level of 4600. But the markets bounced back sharply. World markets too gave good support. Europe markets and the US markets bounced back sharply. Indian markets to closed higher. Nifty for the week closed higher at 5066 after making a low of 4786. Sensex closed at 16863 and the low was 15960.

Nifty for the week closed above its 200DMA, but faced resistance at the 20DMA. Nifty may face resistance at the trendline (as marked in the chart). Chart suggests that as per the wave theory, Nifty is in its 5^th wave. It was also mentioned that the RSI was near the over bought sold which bounced back sharply. MACD is also trying to be positive.

At the close of the Friday trading session, Dow futures were trading in the positive zone. Personally do not feel like the markets will still be so comfortable trading in the coming week. Markets have bounced back sharply in the last week. Nifty bounced back 250 points in the last 3 days and Sensex nearly 900 points. Nifty will face resistance at the trendline. We might see some more correction.

Last weeks article title was “ Is this the end of correction” and the markets bounced back from the low of 4786 as mentioned. It won’t be so easy for the investors to search for the diamond at the decent buy price. Investors are still advised to wait till some more time.

FII’s continued to dump their stocks in the Indian markets. They sold almost $1bn worth of stocks since last thursday. DII’s remained net buyers to the tune of $500mn.

Last weeks call..
Short TCS below 710 made a low of 691.

Short DLF below 260 made a low of 254.

==>> Its all over for the Bulls....

It's been a long wait for the Bears to get the control of the markets. Since the start of the week, Sensex lost almost 750 points from the yesterdays high. Nifty made a low of 4786 and closed marginally above the 4800 mark. Nifty closed down 2.78% or 137 points at 4806. Sensex sinked more than 500 points but recovered marginally in the end. Since the close below the 200DMA, Nifty seems to have a very bad time. Nifty faced resistance at 4950 levels, crossover of the level triggered heavy selling in the markets. With the expiry date nearing the volatility in the markets was at top. Yesterday Sensex fell from the high of almost 300 points slipped down 700 points till today. FII's remained net seller. The selling continued since the start of the month. FII have sold almost Rs.10K Cr of stocks till date. DII's on the other hand has been net buyers, but the question is "TILL WHEN they could buy". Are our Domestic funds sitiing on cash, that could be pumped in the markets during the FII sell off. Its not only the Indian markets who are feeling the heat. Its a Global Sell off. European markets were down more then 3%. Dow futures were down 150 points post lunch session. As mentioned in my earlier articles also, the Euro problems wont be solved out with few bn dollars. They need really BIG money for the bailout. Investors are adviced to wait for the markets to settle. Nifty close below the 4800 levels might see some the level of 4780- 4692.

On back of positive close in the US markets, our markets today opened pretty well, but in the end markets tanked to trade in the negative zone. Sensex which was trading more then 300 points post lunch session slipped down nearly -25 points.

==>> Is this the end of the correction???

Is the Indian markets bottomed out???? This is the question in everyone’s mind. But this may not be correct….

This is just a technical bounce back from the 4850 levels. Below 4980 levels Nifty finds support at 4850 levels and that was mentioned in my last article. Recovery in the European markets and US futures triggered the pull back in the Indian markets.

In the last week it was mentioned in my article that the Nifty has closed below its 100 DMA. And now, the Nifty is below its 200DMA also. For the first time since April 2009 Nifty closed below the 200DMA on Wednesday.

Euro problems are not seems to be fading out so easily. Some even bets that the problem will not be solved even with the $1tn bailout. On Thursday evening US markets fell sharply on back week data for the first time since the start of the new financial year, which created doubt about the sustainability of its recovery in the second half of this year. Thursday on growing fears the euro zone's efforts to tackle its sovereign debt crisis will fall short, jeopardizing the global economic recovery. The number of US workers filing new applications for unemployment benefits unexpectedly rose last week for the first time since early April. The index of leading economic indicators slipped last month for the first time since March 2009, while factory activity in the US mid-Atlantic region accelerated less than expected in May.

Four Years of delay in the auction of 3G mobile spectrum had bought unexpected revenues to the Government. Govt managed to garner nearly $15bn (68k Cr). The country’s top two mobile firms—Bharti Airtel and Reliance Communications (RCOM)—each won 13 of the 22 telecom zones on offer while other major operators Vodafone Essar, Idea Cellular and Tata won a total of 9, 11 and 9 circles, respectively. Bharti, RCOM and Vodafone won the coveted 20-year licences for Delhi and Mumbai, which account for a lion’s share of the country’s customers and revenues and attracted top bids of Rs 3,317 crore and Rs 3,247 crore, respectively—effectively Rs 166 crore and Rs 162 crore per year of the licence period. The auctions were for a maximum of three operator slots in all but one circle. Staterun BSNL and MTNL will be the fourth operator of 3G services.

Not only the Equity, even the commodities and the currency felt the heat. Gold fell down to $1181. Rupee tumbled to its 27 week low. Rupee closed down at 46.96.

FII’s for the week remained net sellers to the tune of Rs.3700 Cr while DII’s were Rs.1500Cr.

According to the Indian Meteorological Department there will be good Monsoon season. Good Rains would raise farm output, boost rural incomes and lower flood inflation. But at noticed in the past also our Met Dept’s prediction have never been right. So all I could say is “May God Bless Us”. Still if the rains are not good, then will surely see another fall in the Indian markets.

The latest data showed the food price inflation picked up for the second consecutive week in early May 2010. The food price index rose 16.49% in the year to 8 May 2010, a tad higher than the prior week's annual reading of 16.44% as fruit and vegetables prices climbed on the back of a heat wave. The fuel price index was steady at 12.33%, while the primary articles index was up 16.19% versus 16.76%

India's exports rose an annual 36% to $16.9 billion in April 2010 as demand picked up for gems and textiles while imports rose an annual 43% to $27.3 billion buoyed by industrial recovery, stronger domestic growth and rising oil prices

UPA govt has successfully completed its 365 days as the ruling party. This year has been very good for the UPA govt. Government raise money via selling stakes in the govt owned companies. 3G mobile Spectrum sale helped govt garner nearly Rs.68kCr. But the question which rose in my mind is, “Is the govt doing anything for the raise in the corruption levels, raise in the food prices….”

We might see some bounce back as the Nifty is very close to its support level of 4850, but I do not think that it is still the right time to buy in the markets. Indian markets and the Global markets are still in the correction mode. Euro problems are still far from getting solved. Euro countries will still require more such kind of bailout.

But the markets might see some bounce back, as seen in the chart attached together.. A similar of a Hammer like patter was seen. From there the markets had bounced back. Nifty is almost at the same levels with almost the similar type of the candle stick pattern. RSI is closing near the oversold zone. Nifty is closes below the 4800 levels then we could see 4600 levels in Nifty.

Last weeks call..

Short SBI with SL of 2242. Low was 2141 after that Sl triggered

Short Rel capital with SL of 684. Low was 611.

Short Tata Steel below 542. Low 487.

Current Weeks call…

Short TCS below 710

Short DLF below 260

Its been a very volatile session for the Indian markets. Bse Sensex plunging down to sub zero levels from the high of 200 points and again back to northward direction to close up nearly 110 points. But Rupee could not stand this effect. Rupee continued to meltdown. It slide nearly 47 for June expirty contract and current month was down to 46.80 levels.

In the Intraday trade nifty made a low and high of 4924 & 4980. As mentioned that the Nifty will face stiff resistance at the 4980 levels. Nifty closed at 4954 and Sensex closed at 16520 levels. Markets will continue to slide. Nifty once again closed down the 200DMA.

Euro problems have really take the rest of the world for granted. As mentioned in my last update Nifty had closed below the 100DMA last friday. Today nifty broke its support level of 4980 and closed at 4919.65 down by 146 points. Nifty dropped and closed below its 200 DMA. Since May 2009 Nifty never closed below the 200DMA. For the 1st time it closed below its 200DMA.
For immediate support will be seen at 4890 levels, but the movement may lead to break the same and Nifty could fall down to its next support levels of 4850 levels. In the past also we have seen that 4850 seems to be a very good support level.

RIL close below 990 tgt 960

Euro Debt have taken toll on the World

It’s been long time I had written any article in this news letter. Nothing major had happened for quite a sometime. It’s been same old things of the countries facing bankruptcy. After Spain and Greece it was Portugal to go for austerity measures. Euro debt by some of the European countries gets some more countries in the trap. Greece owes $226bn to other countries. IMF came out with a $962bn rescue package. Not only Greece, Portugal, Italy, Ireland, and Spain. Portugal owes $286bn to other countries, Ireland $867bn, Spain $1.1tn, Italy $1.4tn.

France $511bn or 20% of its GDP. It owes Germany $190bn. Spain in turn owes Germany $238bn and France $220bn. Ireland owes $184bn to Germany and $60bn to France. Portugal owes $47bn to France. And the smallest of them all, Greece owes Germany $45bn and France $75bn. The Moral of the story is, if one country fails to make the payment then the rest of the countries might also get trapped in the same bankruptcy scene.

On Monday Markets surged sharply on back of rescue package for the Euro debt ridden countries which was announced late Sunday evening. On Monday markets opened with a gap. Till mid afternoon our markets were marginally up, but the opening of the European markets our markets too saw a sharp rise. European markets were nearly 5-10% up in the opening session. Later in the evening the US markets also closed higher. But the rescue package announced does not mean that all the problems in the European countries have been wiped off.

The heat was felt till the end of the week. Markets continued to be volatile. As usual Nifty faced resistance at 5200 levels. Even after making a high above 5200 levels, Nifty could not close above the same. Nifty closed down at 5093 down by nearly 90 points on the last day of the week. Sensex too close below the psychological figure of 17000. Sensex closed down 271 at 16994 after sinking nearly 300 points. Nifty chart suggests that there is still more pain that can be felt in the coming week. Nifty is showing weakness. Nifty could come down to 4850 levels if it closes below 4980. In the chart we can clearly see that the Nifty after making 3 tops at 5200 levels in the current week corrected to make a low of 5070 and closed below the 100DMA. RSI is also showing negative trend. MACD in the past 1 month had never given any long term bullish signal. Through out the period it has been negative. There was absolutely no sign of bullish trend.

FII and DII activity also have been lackluster in the week. Inflation for the week cooled off a bit. IIP numbers announced in the week were also upto the mark.

China property bubble news is also heating up. I really do not think any problem in the Chinese markets.

Aban Offshore shares plunged nearly 17% down on back of one of its Semi –sub rigs sinked. The impact could be on some of the banks too.

Short SBI with SL of 2242.

Short Rel capital with SL of 684.

Short Tata Steel below 542.