Now its Egypt’s turn

The political unrest in Egypt, which threatens to destabilize the oil rich Gulf region, fuelled a rally in oil and Gas exploration company shares on Monday. Markets men expects rally to continue for couple of more days. The higher crude prices will be beneficial to Ongc, Gail, Oil, and Cairn & Ril Ind. Many Indian Fmcg companies will be surely impacted.

Nifty and Sensex have fallen by 10% 2011 ytd on concerns such as high inflation, high crude oil prices, lack of progress in govt reforms, fear of populist moves by Indian govt in the wake of 5 state elections scheduled in May. I believe that while higher inflation may be partly priced, we are yet to see significant selling by foreign institutional investors yet. FII selling can take markets down by 10%-15% more.

After the record inflow in the Indian markets last year, this year since the start has been proved bad for the individual investors. Markets have lost more than 12% in just 1 month. There have been lots and lots of bad news in the markets since the start of the New Year. Political instability fear is also there. Scams have become a routine part of our life. Sebi have cautioned traders or investors to trade carefully in nearly 1900 scripts which are illiquid. 2G scam has roped in many others company which has been tangled with Mr.Raja.

FII have already sold equities worth $1053.50 mn in Jan and continued selling in Feb too. Increasing number of scams in the listed company and the political instability has been the major reason why the FII have been turned sellers in the Indian markets. Rupee depreciated 2.3% vis-à-vis the US dollar this year. In the last few articles this writer had mentioned that these will the main reason why the FII will the selling Indian equities.

Prices of crude oil have gone up to $92 which was around $85 earlier in the weak. It is likely to reach $100 and may be above.

Global markets have been rallying since last week. Dow Jones closed above 12000 for the fist time since 2008. New US claims for unemployment benefits fell sharply last week. Growth in the US services sector in Jan was the fastest in more than 5 yrs. Another sign the economy is started the New Year on a solid grounds. But Indian markets remained lackluster with low volumes and sinked nearly 10-12% since start of the New Year.

This weak Indian markets tanked nearly 2.2%. All the indices have closed in red. IT & Auto index lost nearly 3%. Fmcg and Reality index were the major looser. The index lost more than 6% in a weak.

Inflation is the major concern for the government now. To tackle the inflation the bank rates have to be increased once again in the near future. Reality sector have lost their shine as the sales have nose dive in the last few months. Prices in some places have risen too fast and too much and its out of the reach of the common people. Increase in bank lending rate will surely have an impact on the pockets of the common people.

Finally the Nifty closed below 5400 levels. Nifty did try to close above its 50% retracement levels but failed to do the same. Thursday Sensex surged more than 300 points but the gains were washed out on the every next day. Sensex dropped more then 475 points. Sensex and Nifty close down nearly 2.2% in a week.

This writer have been constantly mentioning that if Nifty closes below the 5700 levels than the next good support is at 5400 only in between there will be small supports. This week Nifty closed below its 5400 after a ‘DEAD CAT BOUNCE’ of 350 points on Thursday. Nifty is still below its 200DMA. This week for the first time nifty close below its 200DMA in last 5 months. Nifty will find support at 5348 but close below the same will take the Nifty to 5232 levels directly. 5348 is a 61% retracement levels.

Viewers can see that Nifty is trading in line with the Fibonacci Retracement levels. RSI is now in the oversold zone.

Last Weeks Call

Short United Phos below 151 SL 153 tgt 146-142. Tgt reached. Made a low of 134.

Buy Union Bank above 328 SL 323 tgt 333-339-342. Made a high of 335.

Short Torrent Power below 235 SL 238. Buy if closes above 241.50. Made a low of 213.

Sell Tata Motor Close below 1182 SL 1192 tgt 1172-1162-1141. Made a low of 1063.

Buy Tata Motor only above 1210. Did not trigger the buy price.

Buy SBI with SL of 2590 tgt 2610-2634. Did not trigger the buy price.

Buy SesaGoa with SL of 330. SL triggered.

Buy Relcom above 138 small resistances at 139. With SL of 134. Did not trigger the buy price.

Sell PNB close below 1125. SL 1133. Made a low of 1051.

Buy Icici bank above 1069 SL 1063.. Did not trigger the buy price.

This Weeks Call

Sell Icici Bank below 990 sl 998 tgt 964.

Sell Axis Bank below 1218 sl 1223 tgt 1201-1995-1182.

Sell Biocon below 340 sl 343 tgt 333-331-320.

Sell Cairn below 320 sl 323 tgt 314-312.

Sell Hcl Tech below 478 sl 481 tgt 470-462.

Sell Hdfc bank below 2005 tgt 2017 tgt 1995-1984-1967.

Sell Hdfc Ltd below 600 sl 605 tgt 592-589-582.

Sell Ibreal below 115 sl 118 tgt 108.

Sell Maruti below 1176 sl 1182 tgt 1150

Wednesday, Feb 2 - Morning brief for the stock market

TOP EVENTS TODAY

* Nifty companies detailing Oct-Dec earnings:

+ Bharti Airtel (net profit seen 15.70 bln rupees, down 30% on year)

+ Hero Honda Motors (net profit seen 5.74 bln rupees, up 7% on year)

* Oct-Dec earnings to be detailed by: Aarti Drugs, Aarti Industries,

Alphageo (India), Apcotex Industries, Apar Industries, Arshiya International,

Bemco Hydraulics, Cinemax India, Essar Shipping Ports & Logistics, Halonix,

Fedders Lloyd Corp, Great Offshore, GlaxoSmithKline Consumer Healthcare,

ICRA, Infinite Computer Solutions (India), Jai Corp, Jet Airways (India),

Jenson & Nicholson (India), Lloyd Electric & Engineering, Krebs Biochemicals,

Muthoot Capital Services, Nahar Industrial Enterprises, Neuland Laboratories,

Nitco, Sagar Cements, SEL Manufacturing Co, Sirpur Paper Mills, SJVN, State

Trading Corp of India, Taj GVK Hotels & Resorts, TTK Healthcare, Vardhman

Textiles, Voltas, Wanbury, and Wockhardt.

* Board Meetings of:

+ Gitanjali Gems to mull fund raising plans via convertible bonds, shares.

+ Kavveri Telecom Products to consider 4-mln-share preferential allotment.

INDICATORS (previous session)

* NSE provisional net buy/(sale) in bln rupees, Feb 1: FII (10.37), DII 6.30

* Institutional net buy/(sale) in bln rupees, Jan 31: FIIs (9.00), MF 4.15

* FII NSE futures net buy/(sale) in bln rupee, Feb 1: index 7.30, shr 0.03

* Sensex 18022.22, down 305.54 points; Nifty 5417.20, down 88.70 points.

* Crude: $90.77/bbl; Rupee: 45.75/$1; Gold: $1,338.80/ounce; 10-yr yld: 8.1527%.

OUTLOOK

* Local share indices are seen opening up tracking strong cues from overseas

shares. Initial resistance for the Nifty is pegged at 5450 and support at 5400.

.

GLOBAL STOCK MARKETS

* US shares ended up Tuesday, with the Dow Jones Industrial Average closing

above the 12000-mark for the first time since June 2008, driven by stronger-

than-expected growth in the US manufacturing sector.

* Asian equities were higher in early trade today tracking the US data and

higher commodity prices on the London Metal Exchange.

.

SECTOR NEWS

* AUTOMOBILE: Luxury carmaker Mercedes-Benz is planning to roll out up to 22 new models and variants in India during FY12.

* BPO: Aegis has formed a JV with Saudi Telecom Co to manage the latter's customer care ops, which may earn revenue of over $2 bln over eight years.

* COAL: Prime Minister Manmohan Singh is learnt to have asked the ministry toexpedite clearances to coal blocks in the "no-go" areas.

* ENERGY: Gamesa appoints investment bank Morgan Stanley to scout for wind power assets in India. (Mint)
Ratnagiri Gas and Power Pvt Ltd's plan to add to 2,100 MW at its Dabhol power plant stuck as Maharashtra government unwilling to pay more for the power. (Mint)

* GOVERNMENT: Life Insurance Corp of India paid dividend of 10.30 bln rupees to the central government for 2010-11 (Apr-Mar).

* POLITICS: National Democratic Alliance will not budge from the demand for a Joint Parliamentary Committee probe into the 2G spectrum allocation scam.

* REALTY: The Reserve Bank of India asks banks to secure realty loans with escrow accounts and keep a tab on the end use of funds. (ET)

* TELECOM: The Supreme Court has declined a plea to suspend the controversial telecom license allotments made in 2008. Vodafone Essar defers plan to sell 7,000 towers across seven circles due to ongoing dispute between the joint venture partners Vodafone and Essar. (ET)

Department of Telecommunications asked all mobile companies to provide report on implementation of mobile number portability by today. (ET)

Vodafone Essar appoints Goldman Sachs to assess Essar's 33% stake in joint venture. (FE)

STOCKS

* BANK OF BARODA: Has raised interest rates on deposits of most tenures by 25-50 basis points.

* BANK OF INDIA: Has increased its Base Rate by 50 bps to 9.50% and BenchmarkPrime Lending Rate also by 50 bps to 13.75% effective Feb 3.

Has approved raising funds via issue of 30 mln shares.

* DABUR INDIA: May hike prices of some products in Apr-Jun if costs of raw materials continue to rise.

* DENA BANK: Has hiked Base Rate by 50 bps to 9.45% effective from Feb 1.

* EICHER MOTORS: Eicher Trucks and Buses sold 3,524 vehicles in January, up 28.5% from a year ago.

* FINANCIAL TECHNOLOGIES (INDIA): Has launched Bahrain Financial Exchange.

* GATI: Hires consultants for to draw blueprint for the makeover, plans buyouts.(DNA Money)

* GLENMARK PHARMACEUTICALS: Starts manufacturing samples at its new plant in Indore, samples to be shipped to US for FDA approval. (ET)

* GVL POWER & INFRASTRUCTURE: Emerges top bidder for IDFC's arm Dheeru Powergen which will set up 1,050 MW power plant at Korba in Chhattisgarh. (Mint)

* HERO HONDA MOTORS: Sold 466,524 two-wheelers in January, up 19.7% from the corresponding month last year.

* HINDUSTAN MOTORS: Planning to launch small car in July. (FC)

* HOUSING DEVELOPMENT FINANCE CORP: Raised floating rate on home loans by 25 basis points, effective Feb 1, for existing and new customers.

* IFCI: Delhi High Court has slapped a contempt notice on the company forhaving issued notices to shareholders of TOURISM FINANCE CORP of India convening an EGM.

* INDIAN OIL CORP: Planning to invest 50 bln rupees to expand its Koyali refinery in Gujarat to 18 mln tn from current 13.7 mln tn. (BS)

* INDUSIND BANK: The RBI has allowed foreign institutional investors to buy the bank's shares after obtaining prior approval.

* INFOSYS TECHNOLOGIES: Chief Operating Officer S.D. Shibulal to succeed Kris Gopalakrishnan as chief executive officer in April. (ET)

* MADHUCON PROJECTS: IS mulling to dilute 15-20% stake in subsidiary Simhapuri Energy to raise 5 bln rupees. (FC)

* MCNALLY BHARAT ENGINEERING CO: Has raised its holding in London Stock Exchange-listed Specialist Energy Group to 13.88% from 11% earlier.

* NTPC: Has got approval from the Ministry of Environment and Forests to start operations at its captive coal mine at Pakri Barwadih in Jharkhand.

* OIL AND NATURAL GAS CORP: Has said the government must resolve the issue of royalty payment on Rajasthan crude oil before the company launches its follow-on public offer.

Arm ONGC Videsh to exit oil blocks in Egypt as it did not find the discovery commercially viable. (BL)

* RELIANCE INDUSTRIES: Arm Infotel Broadband Services has invited bids from telecom tower operators willing to lease out 26,000 towers across India. (Mint)

* TATA STEEL: Is considering to issue a perpetual bond to raise $500 mln in Apr-Jun. (DNA Money)

* VISESH INFOTECNICS: Has bagged a Punjab government contract worth 23 mln rupees.

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.

Do Onions make u cry???

This is not only Onions which make my cry, but u name any commodity in the current scenario is making me cry. Vegetables, Metals, Milk products, Crude, etc etc. You name anything; you will find their price almost at their all time high.

Onions do make people cry, but the real guys are the one who produce and consume them. Farmers sell their onions to the middle men for just mere 4-5Rs in Nasik and the same is consumed by the consumers at the price of Rs.60-65. The wholesalers and the Retailers rig up the prices so much that the government finds it difficult to control the same. Few days back Indians were exporting Onions to other countries and now will be Import the same. Till now the Government had their eyes closed. The import will again cost Indian economy. I hope now there is no SCAM in this. Otherwise this would be another one to add to the never ending list of Scams. “Onion Scam”, how funny this could be. …. Now after so much pain the govt will interfere and the price will be bought down to Rs30-35, and finally the consumers have to consume at that price.

The US economy expanded at an annual rate in the third quarter. Economist projections ranged from 2.5% to 3.3%. Growing incomes, the continuation of Bush-era tax cuts and an improving labor market may encourage Americans to boost their spending, which accounts for about 70% of the world’s largest economy. US consumer spending rose for a 5^th straight month in Nov and incomes rose slightly more than expected.

But on the other side the UK economy showed slow growth rate, as compared to the estimate in Q3. GDP rose 0.7% from the previous three months. The ECB will lend banks 149.5bn Euros ($196.8 bn) for three months to meet their liquidity needs over the year end period.

Japan economic growth will slow in the fiscal year from April to only half the pace of the current year due to weak exports and consumption. Data this week also showed a pick up in export growth in Nov, but that failed to temper caution about overseas demand because it was partly due to Yen’s pull back from its 15year highs.

Euro gained against the dollar and recovered from all time lows against the Swiss franc, after the announcement of China to buy Portugal’s debt worth 5b Euros. Fitch downgraded Hungary one step to BBB-. The outlook for major of the rating companies are negative, which means they are more likely to reduce the rating to junk that to raise it or keep it changed.

Global markets remained lackluster due to the year ending. Indian markets closed marginally up with a very narrow range. Weeks Turnover was at their lowest levels since 2008 levels. Nifty and Sensex gained just 1% in the week. Smallcap Index gained the most. Index closed 1.8% higher then its previous close, while Midcap Index closed marginally up. Meta Index gained the most in the sector wise performance. It grew 4%. IT index gained 1.8% and Auto Index closed higher by 1.2%.

Hero Honda after its dramatic part with the Honda group tanked in the last few weeks, but gained the most this week. The stock closed up nearly 15%. Rcom surged 10.5% on rumors that some kind of merger is possible in the company. Metal stocks like Sesagoa, Sterlite Ind & Hindalco surged higher in the range of 7-8% while Jspl was up just 4.5%. Ranbaxy, Sunpharma gained in the range of 4.5% -5.5%. On the other side DRL tanked 5.5%, Bpcl corrected 3.8%. Tata motors stocks witnessed some profit booking and corrected3%. ONGC and Sail both corrected nearly2% each.

On the midcap side Bindal Agro surged nearly 45% in a week. Bf 21%. Jubilant Food 13.5%, Pipavav 10%. Sugar stocks rallied in the last 2 trading sessions on back of resuming trading in futures in the commodity exchange. Sugar prices are once again gaining grounds and seem to getting ready for its another dream in the coming year.

Crude Oil is all set to pinch the pockets of everyone. Crude oil had topped almost $93 per barrel and is all set to touch $110.

In the last few trading session the Nifty was facing resistance at it 50DMA and its long term trendline. On Friday Nifty did try to break the same but could not succeed in the same. Sensex closed once again above 20K. Gaining nearly a percent, Sensex closed at 20073.66. To the break the head and the Shoulder pattern, Nifty need to close above the 50DMA and 6070 levels. Nifty once again took support at the 23.6% retracement levels and bounced back marginally. Macd has given some positive divergence. Nifty will find support at 5932-5890. Nifty will find resistance at 6033-6070-6090 levels.

The speculation is there that the Indian markets will witness heavy selling in the month of Jan and the start date will be 3^rd Jan. Leading brokerage house have come out with report mentioning that the 03^rd Jan to be the day from where the Indian equity markets will start its downward journey. Personally I would not believe this. I would rather go technically in the market and wait for the proper opportunity to grab.

Last weeks call performance.

Sell Dr Reddy below 1787 SL 1798 tgt 1776-1753. Tgt achieved. Made a low of 1616

Sell HUL price tgt 289-284. SL triggered.

Buy Icici with a SL of 1101. Made a high of 1145.

This weeks Call

Buy SBI with a SL of 2730 tgt 2792-2805.

Sell Ultratech Cement below 1040 SL 1045 tgt 1030-1018-1007.

Sell Torrent Power with SL of 270

Sell Tata motors belo 1303 SL 1307 tgt 1286- 1269

Buy Suzlon above 51 SL 49.50

Buy Sunpharma above 470 SL 467.

Buy Relcapital With SL of 641.

Buy Rcom with SL of 132.

The estimation is that the Spain has to raise Euro170bn ($226bn) next year, while refinancing needs for its regions total E30bn and for banks around E90bn.

Easing inflation has given the Reserve Bank of India (RBI) enough room to leave interest rates on hold at its policy review. And, as expected the bank has left all rates unaltered. Thus, rates including repo, reverse repo, cash reserve ratio (CRR) stand unchanged at 6.25%, 5.25% and 6%, respectively. Post lunch session India markets continued to surged higher.

Last three weeks the only buzz in the market is the scams that are going bust now days… As I have mentioned that the list of the scams in India are growing. Heard in the markets that the DMK pulling out the support to Congress. Markets remained very volatile through the week. Fears of DMK removing the support triggered some sell off in the market.

Moil got listed on the brousers with a premium of 55-60%. Before the listing the premium in the grey market have drastically fallen down from nearly Rs300-350 to just Rs200-250. On the listing day Moil opened at 590 and the sell off came and closed at

Nifty made a low of 5795 and high of 5956 to close at 5948 up by 57 points on the last day of the trading session. Nifty to breakout out above its wave theory should close above 6070 levels. Nifty will find resistance at 5966-5987-6033 levels. If Nifty turns down again and closes below the 5890 levels then we could see 5800-5700 levels again in the near future. Below 5700 there could be carnage in the market.

Nifty once again took support at its 38.2% retracement levels and the trend changed. On the last day of the trading week Nifty closed above its 23.6% retracement levels. In last one month Nifty for the 1^st time closed above its 20DMA. This could trigger that the Nifty is all set to move up once again. The RSI have given positive move and the MACD is all set to give positive divergence.

Midcap stocks after the sharp fall in the prices have started picking up. Stocks which have not been named in connection with any price rigging matter have been on the buyer’s radar. Market should continue to rally till the time there is no bad news in the market.

Sell Dr Reddy below 1787 SL 1798 tgt 1776-1753.

Sell HUL price tgt 289-284.

Buy Icici with a SL of 1101.

Important US Economic data to watch from 13/12/2010 to 17/12/2010

TIME (ET) REPORT PERIOD

MONDAY, DEC. 13 None scheduled
Tuesday, DEC. 14
7:30 am NFIB index Nov.
8:30 am Producer price index Nov.
8:30 am Core PPI Nov.
8:30 am Retail sales Nov.
8:30 am Retail sales ex-autos Nov.
10:00 am Business inventories Oct.
2:15 pm FOMC Meeting announcement
Wednesday, Dec. 15
8:30 am Consumer price index Nov.
8:30 am Core CPI Nov.
8:30 am Empire manufacturing index Dec.
9:00 am Treasury International Capital
9:15 am Industrial production Nov.
10:00 am Housing market index Dec.
10:30 am EIA Petroleum Status Report
Thursday, Dec. 16
8:30 am Jobless claims Dec.11
8:30 am Housing starts Nov.
8:30 am Building Permits Nov.
8:30 am Current account 3Q
10:00 am Philadelphia Fed Survey Dec.
10:30 am EIA Natural Gas Report
FRIDAY, Dec. 17
10:00 am Leading indicators Nov.

The List is growing…..

The last weeks Article named “India the den for the Scamsters” really fits well for the Indian economy. This week the list have been update with few more name like Sanjay Dangi, KP… And the list is just growing..

Q2 farm sector growth at 4.4% V/s 0.90% (YOY) Q2 manufacturing growth 9.80 % V/s 8.4 %, Construction growth 8.8% V/s 8.30%, Mining sector growth 8% V/s 10.10%, Service sector growth at 9.80% GDP growth 8.8% V/s 8.7%..

The government today approved additional capital infusion of Rs 6,000Cr in 10 public sector banks with an objective to raise its holding to a minimum 58 per cent in all state-run banks. The government has already announced infusion of Rs 15,000Cr in the Budget to ensure that capital adequacy ratio of all the public sector banks increase to 7 per cent. The increase will give banks additional headroom to raise funds from capital markets without depending on the government.

After the approval of the Euro85bn emergency aid package for Ireland worries are still there for the much bigger problem in Portugal and Spain. The Euro dipped below $1.30 for the first time since mid Sep. The risk of the Europe is that Spain’s Economy is twice as big as that of Greece, Ireland & Portugal combined. So the Euro regions 750bn euro bailout fund may not be big enough if the country resorts to aid.

US jobless claims was up at 436000 an increase by 26000 since last week, indicating the labour markets will take time to improve.

Fresh short positions and partial profit taking were seen in Shipping Corporation of India, where the open interest surged 44% on speculation that the shares from the follow-on public offering will list at a price lower than current market price, a derivatives dealer said. The same thing happened with PGIL also. Before the FPO closed the stock was trading at 101-103 levels but till the new shares listing the price collapsed to 97 levels.

Last times article says “5700 is supposed to be a very crucial level for the Nifty. It is that point from where the Nifty had fallen down on 21^st Jan 08. The open and low on that day was 5700 and 4977 and the close was 5208.80. Nifty for the 2^nd consecutive close below the 5700 may be really bad for the Indian equity markets. Nifty may continue to fall it 5490 levels. That’s nearly its 50% retracement levels that can be seen in the chart.”

But the Nifty took good support at the same and bounced back. It was unexpected that the Nifty will bounce back till 6000 levels. But the 5700 level acted as a pillar to the Nifty. The dark clouds are still not out of the Indian markets. Everyday we are hearing new scams in the Indian equity markets. Recently Sanjay Dangi and some promoters of the companies are barred to trade in the markets.

As mentioned the Nifty is nearing its oversold zone. And closed below 5700 will take the Nifty to 5490 levels, but Nifty took good support at 5700 levels and bounced back sharply to make a Intraweek high of 6029 to face resistance at its 20DMA. Nifty on Monday took good support at its 50DMA and the Long term trendline. Nifty took good support at its 38.2% retracement levels which the writer had mentioned in his last article.

But the recovery seems to be very fast.

Markets have bounced back sharply. Nifty will face resistance at 6030. Close above the same will take the Nifty to 6056- 6079-6150 levels. We are still not sure that the markets are strong or this is just a start of the new Wave pattern in the downside. Nifty will find support at 5900-5860. Close below 5800 will once again take the Nifty to 5700 levels.

But in the weekly chart of Nifty after its 3 weeks continue downfall Nifty had finally pulled up. 3 Black crow patterns have been made in the Nifty weekly chart and after that it is normally seen that the next trading session is positive. And this week Nifty gained and closed above at 5992. But the in the weekly char the nifty is still facing resistance at it trendline shown in the chart. But still traders can trade with the levels provided.

Last weeks call

Sell Bajaj Auto below 1611 SL of 1616 tgt 1600-1587. Tgt achieved made a low of 1548.

Buy Boi above 429 SL 418 tgt 440-446-452. Tgt achieved made a high of 499.

Buy BEL above 1725 SL 1715 tgt 1747-1755. Tgt achieved made a high of 1759.

Buy Drreddy above 1794 SL 1785. Tgt achieved made a high of 1835.

Sell Hdfc bank below 2290 SL 2300 tgt 2276-2254. Tgt achieved made a low of 2258.

This week Calls.

Sell Acc below 980 SL 987 Tgt 970-965-950

Sell AshokLeyland below 71.50 SL 73.

Buy Bajaj Auto close above 1608 SL 1600 tgt 1630-1649.

Buy Ril close above 1010. SL 1000 tgt 1028-1034-1050

Sell Sbi below 3060 Sl 3070. tgt 3050-3039-3024

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