As mentioned in my earlier blog also that the Nifty and the Sensex both are trading in the overbought zone and we might see some correction. Nifty on 27thsep 2010 made a high of 6073. but closed at 6035. The Small inverted hammer like pattern had been created on that day. Since last 2 days Indian markets had been in correction mode. On wednesday Nifty closed below 6000 mark at 5984 levels. Nifty close below the 5959 will take the Nifty at 5885 levels.In my earlier article I had mentioned that the Nifty and Sensex are trading in overbought zone. Rsi is been trading at a similar highs which we had seen before the 2008 crash. Today MACD is on the verge of giving negative divergence. but the confirmation will come only after the tommorrows trading session.
Tuesday, September 28, 2010
The foreigners are invading Dalal Street like never before. Foreign institutional investors (FIIs) have net infused $17.9 billion so far this year into the Indian market, the highest ever yearly inflow since foreign funds were allowed to invest in India in 1992, data published by Sebi on Monday showed that so far this year.
This year's data beats the past record of $17.6 billion, witnessed during the frenzied 2007. As a result of this unprecedented inflow of funds from abroad, the Indian rupee is appreciating against major currencies, mainly the US dollar, and the leading indices are rallying to multi-year highs. On Monday, the rupee hit a four-and-half-month high against the greenback and ended at 45.10 to a dollar, compared to its Friday close at 45.25. And on the BSE, the sensex gained 72 points to end at 20,117, a 32-month closing high.
Institutional dealers and top officials at broking houses said a major portion of this large chunk of FII money is coming either through the exchange traded fund (ETF) route or from smaller countries where investors are now waking up to the India story. "ETF money will keep coming as long as we continue to give good return,'' said Ambareesh Baliga, VP, Karvy Stock Broking.
"We are in a virtuous cycle now,'' he added. An ETF is a fund that tracks a particular market or an index and tries to have a portfolio that replicates the weight of the index that the fund is tracking. While the upside, so far, looks good, but market players also warned about the downside of unabated flow of ETF funds into the Indian market. In case the India market stops giving good return and turns the other way round, the ETFs will start withdrawing and "we could be in for a vicious cycle,'' said Baliga.
A dealer with a local primary dealership said that while in the inter-bank market the rupee closed at 45.02 to a dollar, in the non-deliverable market the rupee was nearly breaching the 45-mark and speculation in that market was also on the ascent. In the government securities market, the benchmark 10-year Gsec yield closed Monday's session at 7.86%, down from nearly 8% level a few days ago.
President Barack Obama and his administration weakened the country’s economy by seeking to foster growth instead of paying down the federal debt, said Nassim Nicholas Taleb, author of “The Black Swan.”
“Obama did exactly the opposite of what should have been done,” Taleb said yesterday in Montreal in a speech as part of Canada’s Salon Speakers series. “He surrounded himself with people who exacerbated the problem. You have a person who has cancer and instead of removing the cancer, you give him tranquilizers. When you give tranquilizers to a cancer patient, they feel better but the cancer gets worse.”
Today, Taleb said, “total debt is higher than it was in 2008 and unemployment is worse.”
Obama this month proposed a package of $180 billion in business tax breaks and infrastructure outlays to boost spending and job growth. That would come on top of the $814 billion stimulus measure enacted last year. The U.S. government’s total outstanding debt is about $13.5 trillion, according to U.S. Treasury Department figures.
Obama, 49, inherited what the National Bureau of Economic Research said this week was the deepest U.S. recession since the Great Depression. Even after the stimulus measure and other government actions, the U.S. unemployment rate is 9.6 percent.
Governments globally need to cut debt and avoid bailing out struggling companies because that’s the only way they can shield their economies from the negative consequences of erroneous budget forecasts, Taleb said.
Errant Forecasts
“Today there is a dependency on people who have never been able to forecast anything,” Taleb said. “What kind of system is insulated from forecasting errors? A system where debts are low and companies are allowed to die young when they are fragile. Companies always end up dying one day anyway.”
Taleb, a native of Lebanon who gave his speech in French to an audience of Quebec business people, said Canada’s fiscal situation makes the country a safer investment than its southern neighbor.
Canada has the lowest ratio of net debt to gross domestic product among the Group of Seven industrialized countries and will keep that distinction until at least 2014, the country’s finance department said in March. Canada’s ratio, 24 percent in 2007, will rise to about 30 percent by 2014. The U.S. ratio, now above 40 percent, will top 80 percent in four years, the department said, citing IMF data.
“I am bullish on Canada,” he told the audience. “I prefer Canada to the U.S. or even Europe.”
Mortgage Interest
Canada’s economy also benefits from the fact that homeowners, unlike their U.S. neighbors, can’t take mortgage interest as a tax deduction, Taleb said. That removes the incentive to take on too much debt, he said.
“The first thing to do if you want to solve the mortgage problem in the U.S. is to stop making these interest payments deductible,” he said. “Has someone dared to talk about this in Washington? No, because the U.S. homebuilders’ lobby is hyperactive and doesn’t want people to talk about this.”
Taleb also criticized banks and securities firms, saying they don’t adequately warn clients of the risks they run when they invest their retirement savings in the stock market.
‘Have Fun’
“People should use financial markets to have fun, but not as a depository of value,” Taleb said. “Investors have been deceived. People were told that markets go up regularly, but if you look at the last 10 years that’s not been the case. The risks are always greater than what people are told.”
Asked by an audience member if returns such as those posted by Berkshire Hathaway Inc. Chief Executive Officer Warren Buffett -- who amassed the world’s third-biggest personal fortune through decades of stock picks and takeovers -- are the product of luck or talent, Taleb said both played a part.
If given a choice between investing with Buffett and billionaire investor George Soros, Taleb also said he would probably pick the latter.
“I am not saying Buffett isn’t as good as Soros,” he said. “I am saying that the probability Soros’s returns come from randomness is much smaller because he did almost everything: he bought currencies, he sold currencies, he did arbitrages. He made a lot more decisions. Buffett followed a strategy to buy companies that had a certain earnings profile, and it worked for him. There is a lot more luck involved in this strategy.”
Soros gained fame in the 1990s when he reportedly made $1 billion correctly betting against the British pound.
Taleb’s 2007 best-seller, “The Black Swan: The Impact of the Highly Improbable,” argues that history is littered with rare, high-impact events. The black-swan theory stems from the ancient misconception that all swans were white.
A former trader, Taleb teaches risk engineering at New York University and advises Universa Investments LP, a Santa Monica, California-based fund that bets on extreme market moves.
That’s called a very very fast movement. In the Seminar that was held on 3rd Sep 2010, I had mentioned that w will soon see 6000 in Nifty and had given a period till Dec, but it seems so that the markets men do not want to wait till that time.
Markets flared nearly 4.5% in a week. Nifty and Sensex gained on more than 4% each. The rally had been more off in the frontline stocks. Midcap and the Smallcap stocks felt left out in the rally. Mid cap Index was up marginally. Selected midcap and small cap rallied too. Delta corp surged 36% in a week on back of its land sale in Mumbai. Company will cut down its Debt via stake sale and land sale. On back of festive season, we saw positive movement in Archies which gained 27%. Company planning to scale up its number of stores. Ispat Ind surged surged 11% on back of stake sale news.
From the Large cap lots stocks Banking stocks rallied the most. Banking stocks had another week in a positive zone. Bank Index gained almost 6% in a week. Kotak & Axis Bank gained the most, nearly 10%. Hdfc Bank & Hdfc were up 8.5 & 7% respectively. Icici bank and Pnb were up nearly 6% each.
Oil & Gas index was up 5.5%. Ril after making a low of 925 surged past 1000 mark to close at 1027 up almost 5.7% in a week. Reality stocks gained some attention. The sector which lost the interest in the last few months has gained some attention from the markets men. Reality Index gained 4.5%. Dlf gained the most in the large cap stocks which was up 9% in a week. IT Index surged 3.2%.
FII’s has been a one sided buyer in the week. Since last Friday FII’s had bought stocks worth Rs.8500Cr. But on the other side the Domestic Institutions have been seller for nearly Rs.3500Cr. Markets men who try to short in the market, finds it really difficult to gain control of the market. Markets continued to rally. Nifty in the intra week crossed the 5900 levels and Sensex closed above 19500 odd levels.
Last week I had mentioned that the Nifty will find some resistance at 5663-5677 and close above the same will take the Nifty to 5750+ levels.
I had mentioned that the rally will continue and it is the extension of the 5th Wave. we will see Nifty trading at 6000 levels till this year end, but did not expected this to happen this fast also.
We need to stop here. Indian markets in the past few session had seen a sudden spark in almost all the sector. Indian markets have outperformed all the other global markets with a wide range. Indices closed almost at its 32 month high.
Nifty after making and intraweek high of 5901 closed at 5885 levels. In the daily chart the RSI is trading well above the overbought levels. In April 2009 also the RSI approached the at this levels. But the rally continued to for sometime and then the markets corrected. But after certain point of time, Nifty corrected and fell down by almost 10%. RSI at that time was near 79.45 and currently the RSI is above 80.
Let’s go back to the year of 2007, month Oct when the RSI was nearly at 87. And the rally continued for few more sessions and then the Nifty corrected by nearly 15%. Let’s go a back to month of July 2007 when the RSI was up at 80.37 and markets again corrected for nearly 15%. Currently the Indian markets are trading at almost same levels. This rally may continue for another 1-2 trading sessions and after that we could definitely see some serious corrected.
But if we check the RSI weekly chart there is still more Steam left. At present the RSI is still at 71 and that is way below its top of 78. Nifty will face stiff resistance at 5923-5975 on weekly charts and in Daily chart Nifty will face resistance at 5875-5900 levels.
Keep booking profits at higher levels. No major buy positions to be kept at these levels. FII's bought nearly Rs.8500 Cr of stocks in last 5 trading sessions, whereas DII's sold almost Rs.3500 Cr of stocks. There is practically new bad news in the Indian markets but the sudden spike in the Indian markets is a lil fast. So we might see some correction.
Nifty trading at a PE of 24.74 and Bse at 23.18 and at the all time high Sensex PE was above 26.
For a Indian markets to have another round of bull market, we need to have some correction or u may say profit booking at these levels. There is no bad news in the Indian markets, just a lil bit of profit booking required. But midcap and Smallcap should outperform the Frontline stocks.
Sales at US retailers posted their largest gain in five months in August on strong receipts at gasoline stations and clothing outlets, further assuaging fears of a double dip recession.
Last weeks call:
Buy AB Nuvo above 880 with SL of 863.Made a high of 897 but SL triggered later on.
Buy Bob only above 848. Made a high of 906.
Buy Bel above 1745. Made a high of 1848.
Sell Cairn with SL of 330.SL triggered.
Sell Cipla with SL of 310. Made a low of 304 but SL triggered later on.
Before reading this, read the article posted on 03rd Sep named "Nifty above 5600 levels". I had mentioned in that the rally will continue and it is extension of the 5th Wave. we will see Nifty trading at 6000 levels till this year end, but did not expected this to happen this fast also.
We need to stop here. Indian markets in the past few session had seen a sudden spark in almost all the sector. Indian markets have outperformed all the other global markets with a wide range. Indices closed almost at its 32 month high.
Markets opened by almost flat but pre lunch session Sensex surged nearly 150 points. Buying by the FII's kept the markets in the positive trend and the Sensex closed up 150 points. Nifty after making and intraday high of 5869 closed at 5860 levels. In the daily chart the RSI is trading well above the overbought levels. In April 2009 also the RSI approached the at this levels. But the rally continued to for sometime and then the markets corrected. But after certain point of time, Nifty corrected and fell down by almost 10%. Rsi at that time was near 79.45 and currently the RSI is above 80.
Lets go back to the year of 2007, month Oct when the Rsi was nearly at 87. and the rally continued for few more sessions and then the Nifty corrected by nearly 15%. Lets go a back to month of July 2007 when the Rsi was up at 80.37 and markets again corrected for nearly 15%. Currently the Indian markets are trading at almost same levels. This rally may continue for another 1-2 trading sessions and after that we could definately see some serious corrected.
But if we check the RSI weekly chart there is still more Steam left. At present the RSI is still at 71 and that is way below its top of 78. Nifty will face stiff resistance at 5923-5975 on weekly chart and in Daily chart Nifty will face resistance at 5875-5900 levels.
Keep booking profits at higher levels. No major buy positions to be kept at these levels. FII's bought nearly 7500 Cr of stocks in last 4 trading sessions, whereas DII's sold almost 3000 Cr of stocks. There is practically new bad news in the Indian markets but the sudden spike in the Indian markets is a lil fast. So we might see some correction.
Nifty trading at a PE of 24.74 and Bse at 23.18 and at the all time high Sensex PE was above 26.
Central Banks From India, China, Russia and Saudi Arabia Have Been Amassing Gold. For Indian Investors There Is Another Alternate to Physical Gold-Gold ETF's issued by 6 Institutions and listed on the National Stock Exchange-these include Benchmark, UTI, HDFC, Kotak, Reliance & Quantum-that alone is like Rs 600 crore into Gold at issue price.
No wonder gold rose to $1,260 an ounce this week before easing. One by one, central banks are amassing major gold positions, proof positive that they want to participate in the world's most glamorous asset class. Think central banks taking investment advice from global hedge funds.
This is probably a unique order in the investment jungle. The major seller, the International Monetary Fund, does not look too sharp. It sold 541,700 ounces of the shiny metal in July alone according to Uncommon Wisdom, an investment service I've been monitoring.
So far in 2010 Russia has increased its gold holdings by 2.8 million ounces, $3.6 billion at current prices. Total holdings by the Putin government total almost $30 billion. Saudi Arabia and the Philippines have disclosed new gold buying in 2010, plus India, Sri Lanka and Mauritius bought gold in 2009.
The World Gold Council seems sure the People's Bank of China also is a major accumulator of gold. It makes sense that some portion of China's $2 trillion in reserves would be held in gold. It is a hedge against global economic uncertainty. For others, it is a substitute for paper money. More recently, it's been a hot investment.
This central bank buying reverses the prevailing trend of the past several decades of central banks selling excess gold to the speculators. Can China not be steadily and secretly taking a massive position? We will try to find out next week from a well-placed Hong Kong source.
Gold is rising in price and will continue to do so because demand is rising far faster than any potential supply to meet it. Mine production has remained flat even as investor demand more than doubled so far in 2010 compared to a year earlier.
Exchange-traded funds like SPDR Gold Shares and iShares COMEX Gold Trust have exploded 25% higher in the past year, far better than 8% advance for the S&P 500.
It has not been lost on central banks that the dollar has lost 80% of its value against gold since 1999. Just as serious, dollar-denominated stock market indexes have also lost around 80% of their value relative to gold in the past decade.
There is unmistakable fear that precious metals may well hold their value or rise in value as paper money gets trounced.
A wealthy precious metals investor recently warned me to move at least some of my investments out of the U.S. to safer havens and to switch dollars into gold and real assets, like other commodity producing properties.
Think about it, the price of gold has gained 12% in the past 30 days, 24% over the last six months and 192% over five years. Does that seem like a fad, a fluke? Sure, gold is volatile. It is back down to $1,245 an ounce from $1,260 two days ago. It backed and filled for some time before rising to new highs in the past decade.
The role of gold is changing. For some it is a hedge against global economic uncertainty. For others it is an alternative to holding paper currency, especially because of doubts sovereign debt levels can be permanently reduced to manageable levels.
Gold as a safe haven is a concept driving pension funds, endowments, and family offices, sophisticated investors, to have a portion, say 5% to 15% of their massive portfolios, in some form of gold, be it gold bullion held in a bank safety deposit box, gold mining shares like the Market Vectors Gold Miners ETF. There's even outright ownership of part or all of a gold mine.
We'll never hear of it, but I know for a fact that leading investment banks own for their own account gold mining properties. Investors are looking at publicly traded Russian gold companies that are expected to double their gold production in the next five years, according to Frank Holmes, CEO, U.S. Global Funds.
Safer choices probably are Barrick Gold or Newcrest Mining in Australia, which has an 8% weighting in Christopher Wood's long only absolute return portfolio for Asia ex-Japan. Wood, author of the Greed & Fear weekly letter, has been recommending gold since it was $375 an ounce.
My prediction is that further negative equity returns will result in further positive price action in gold.
First I would like to thank the “Informed Investor” newspaper, to consider me as a Speaker at the Seminar which was held at Thane on 04th Sep 2010. At the seminar I had mentioned that the Nifty will continue the rally which raised many eyebrows. But still we can see the outcome. As mentioned in my earlier article that the Nifty had close above the 20DMA and RSI has given positive divergence which could lead to rally for the current markets. The last article was for the week ended 02nd Sep 2010, so that did not consider the price movement for the last day of the last week.
Indian markets maintained positive momentum throughout the week and gained nearly 160 points on week on week basis. Sensex gained more than 575 points. Banks had their dream run on the browsers. Sbi gained the most from the lot. Ril too bounced back from its low of 925 and closed above 960. Piramal Health after seeing blok deals since the last 10 days, is now on the buying mode. Special dividend by the company will definitely prove to be a positive trigger for the stocks in the coming days.
FII’s remained net buyers for the week, But DII’s on the other side kept on profit booking.
On first day of the week Nifty closed marginally below the opening, but in the evening global markets surged nearly 2%. On back of that Indian markets opened with positive gain and closed higher. MACD had given buy signals on that Tuesday. Nifty closed higher and the rally continued and closed above at 5632. Sensex closed at 18799.
Sensex will face resistance at 18886 – 19162 levels. Nifty resistance level is at 5663-5677. Nifty if closes above this we can soon see Nifty making high of 5750 levels. Indian markets may see some wild movements in the coming weeks.
If we see the Nifty chart through the Wave theorey, this could be an extension of the 5th wave or the 7th wave. If this trend continues then we could see Nifty at 6000 levels within 2010.
Last weeks call:
Buy Tata Steel above 547 with SL of 539 made a high of 596
Buy Ril only above 945 with SL of 925 made a high of 970.
Buy Axisbank above 1388 SL of 1360 made a high of 1405.
Heck, this is heights. India ranks in one of the most corrupt countries in the world, but still the 2nd fastest growing economy in the world. The mess that was created in counting the GDP numbers has raised the question on the credibility of the FM. The GDP numbers for Q1 stays at 8.8%. The Central Statistical Organization (CSO) nearly tripled the initially estimated growth on the demand side to 10% from 3.7% announced on Tuesday.
On Thursday US markets flared on back of excellent manufacturing numbers. The US Manufacturing sector grew faster than expected in Aug the 13th straight month of expansion, claiming fears that growth was stagnating. But private employers unexpectedly cut jobs, showing the recovery still face major headwinds.
Pawar takes step to decontrol sugar.
Indian markets started on a rough note. Markets closed almost flat on the first day of the week after making a high of 5469 but closed down at 5390. The day after, markets tanked but recovered sharply. Nifty slipped to make a low of 5349 (as mentioned in my earlier article support at 5350) but closed above the 5400 levels. On Wednesday Markets bounced back sharply. Global markets surged nearly 2% high. US markets closed nearly 2.5% high on back of unexpected rise in manufacturing numbers. Indian markets opened positive on Thursday, but corrected in the end.
Nifty is still trading inside the range of 5495- 5391 range. In the past 4 trading session the Nifty have not been able to close outside this range. Close outside the range will give us the indication of the trend of the market. Till Thursday, looking at the chart the Indices have not given any indication to buy. Nifty closed above its 20 DMA. For the further move Nifty should close above the trendline and above the rande. Nifty will continue to find support at 5400-5350 levels. RSI has given positive move but still the MACD has not given positive divergence.
Last weeks call Till ( 02nd Sep 2010)
Short Abb below 757. SL 775. Did not trigger the price.
Buy Zee Ent with SL of 290. SL triggered.
Short Unitech below 77 with SL of 80. did not trigger the price.
Short Tech Mahindra below 654 with SL of 668. Made a low of 634.
Buy Tata steel close above 513. Made a high of 546.
Short Tata Power tgt 1200. Made a low of 1212.
Short Sbi below 2785. SL of 2780. Made a low of 2738.
This weeks call
Buy Tata Steel above 547 with SL of 539.
Buy Ril only above 945. with SL of 925.
Buy Axisbank above 1388 Sl of 1360.
Wednesday, September 01, 2010
Happy Janmashtami. The bull camp appears to have regained its winning ways just as the festive spirits are beginning to escalate here in India. The start promises to be good given the cheerful mood across the globe following encouraging reports on manufacturing output – first in China and then in the US. While people in India form human pyramids to reach a high-hanging pot of butter and break it, the bulls too will team up to help the Nifty break past 5500.
The crucial thing to watch out for is whether the Nifty can sustain above 5500. Just recently it crossed 5500 but failed to extend its ascent. Bulls are of course hoping this time things might be different. But, the precarious and uncertain global situation could continue to play spoilsport every now and then. All eyes are on Friday’s US monthly payroll data, which could swing the sentiment either ways, at least in the immediately short term. The fact that global data points are not consistent will make world markets that much more volatile.
Back home, the Government has revised GDP data (based on expenditures) at market prices to show even better growth. However, if the latest batch of reports are any indication, we could see some softening in India as well. The overall GDP number for FY11 will be fairly robust. The big challenge will be how to tackle an apparent slowdown in key regions like the US, China and euro-zone. Inflation of course continues to be a big issue, and the RBI is likely to continue hiking rates to try and contain it.
The Indian market kicked off the first trading day of September on a high and closed the session with a big bang, as investors snapped up beaten down stocks following the recent reversals. The sentiment got a boost after data showed improvement in China's manufacturing sector output and Australia's GDP growth.
Such good was the bullish undercurrent today that the market ignored reports showing a slowdown in India's manufacturing output and merchandise exports.
The broader market did slightly better and the market breadth was decisively positive. Interestingly, the Auto index on the BSE gained the least despite fairly strong monthly sales volumes. All BSE sectoral indices ended in the positive territory.
Real Estate, Metal, IT and Telecom stocks led the rally along with Consumer Durables, Oil & Gas, Banking and FMCG shares. Capital Goods, Power and Pharma indices on the BSE were rose marginally.
The BSE Sensex closed at 18,205, up 234 points over the previous close. It had earlier been as high as 18,227 and opened at the day's low of 18, 027.
The NSE Nifty closed up by nearly 69 points at 5,471 after touching a low of 5,403 and a high of 5,478. It had opened at 5,403.
US Jobless claims higher, are any more bad news on the way??? Was my last articles name……..
The bad days will be back again in the Global markets. Euro has temporarily bounced back but the changes of Euro zone going bankrupt has not been phased out. No change in the US jobless claims indicates that there has been no change in the US markets.
Chicago Federal Reserve Bank President Charles Evan said the risks of a double-dip US recession have risen in the last six months. While he added he did not think that was the most likely scenario, he said high unemployment and a fractured housing sector would make the recovery a fragile one. Asian stocks fell on Wednesday, with Japan's Nikkei at a 16-month low, as investors sold riskier assets after a spate of worrying US economic data, while the yen slipped from a 15-year high on a report Tokyo was considering weakening its currency. But even if Japan's government acted alone to try and halt yen strength, dealers were skeptical it could reverse the growing unwillingness among investors to take risks that has underlined the yen's 10 per cent rise against the dollar so far this year.
The UShousing market is taking a turn for the worse.
Tuesday's report from the National Association of Realtors about sales of previously occupied homes is expected to show sales plunged in July. Economists are predicting as much as a 26 percent drop from a month earlier to a seasonally adjusted annual rate of 3.95 million. That would be the worst month for sales in more than a decade.
Many say the market is hurting because buyers and sellers are in a standoff over home prices. Sellers have unrealistic expectations about their home values and are listing properties on the high end.
The Japanese Nikkei was down 1.66%, on reports of its export growth slowing for a fifth month in July and the appreciating yen against the dollar. It had touched a new 15 year high and that caused some panic amongst the investment community as a siring yen is detrimental to the export oriented Japanese economy.
Buyers are afraid home prices will start falling after being flat nationally for about a year and even rising in some parts of the country. The housing market is also being hampered by a weakening economic recovery. Unemployment remains stuck at 9.5 percent and many prospective buyers worry they might not have a job to pay the mortgage. Prices are low, but that's largely because foreclosures are running about 10 times higher than before the housing bust. And while mortgage rates are at the lowest levels in decades, many people can't qualify because banks are being selective in the tough economy.
Major Indices closed down nearly1.7% each. Midcap and Smallcap Indices also tanked this week, loosing nearly 2% each. Name whatever group, it crashed this week. Except the Oil refining companies surged ahead and out perform the Major Indices. Bpcl & Ongc were up by 12% & 5% each. Banks and the Infra stocks had their bad week on the street. Hdfc Bank tanked nearly 3.4% and Icici bank & Kotak bank corrected 3.2% & 2.5% each.
Some of the midcap stocks outperformed the markets. Indswift Lab surged 35% while Surya Pharma was up 30%. Natco Pharm stock was up 16%. India witness above average rainfall in this season, this might be the reason for which major small cap and Midcap fertilizers could see some good rally.
Markets remained very volatile for the week. Nifty made its new 52 week high but ended up with sharp correction and triggered its lower trendline also. Nifty at the close of the week made an intraweek high and low of 5549 & 5391. Last week’s recommendation (Nifty for the upward movement need to close above the 5490 levels).I had mentioned that the Nifty if triggers the lower trendline then we might see some serious correction.
(But if the Nifty close below the trendline we might see serious correction). Nifty on Friday closed below its 20DMA and took support at its 50 DMA.
I had also mentioned that the (“Any bad news in the Global markets can prove to be a salvage point for the Indian markets. Stay cautious; don’t take much open position in the market. Intraday trades are advised.”). There is not such bad news in the Indian markets except the growing inflation and the corruption. Indians are used to corruption and for govt has promised to get control over the inflation within 3 months, irrespective of actual prices coming down, the inflation index will surely come down. HAHAHA.
In the last week RSI had take support at the trendline but triggered the downtrend and continued to fall. MACD also showed negative divergence. Nifty will find support at 5375 -5350 levels.
This weeks call
Short Abb below 757. SL 775.
Buy Zee Ent with SL of 290.
Short Unitech below 77 with SL of 80.
Short Tech Mahindra below 654 with SL of 668.
Buy Tata steel close above 513.
Short Tata Power tgt 1200
Short Sbi below 2785. SL of 2780
Thursday, August 26, 2010
Market ended a volatile session in the red for 2nd day in running as traders squared positions ahead of August F&O series expiry today. Weakness in global markets kept bears active. Selling pressure was seen across the board with midcaps and small caps worst hit. Nifty closed at 5462, down 43 points. Open interests are on the high side, indicating that leveraged positions are higher in the market. Metal stocks fell as metals declined on LME by almost 4% in the last six days. TISCO is weakened by 3.2% & Hindalco shed 2.9% at Rs 163. Metal demand is already a matter of concern. Auto stocks weakened too. Nifty future closed at 5465 with 2 points premium. Open interest (OI)I for 5600 Nifty call & 5300 remained highest.
Telecom, pharma, & FMCG space can show good up move in the short-term. Yesterday Idea Cellular moved up by 4.5%. Bharti & R-COM are expected to follow. Bharti above 335 can reach Rs 370. R-COM target is around Rs 200. There is supports for Nifty around 5450 & thereafter approximately every 50 points down. A breach below 5350 would be confirmatory of end to the intermediate up trend that started from 4786 on May 25 & went to the 5549 on Aug 23, just 2 days back. If so, a fall to 5100 may happen. It may end around 5250. If Nifty remains above 5350, it can hit 5550-5600. Supports exist at 5455-5460 & 5410. Do not hold long position below 5450. Yesterday both DIIs & FIIs were sellers. DIIs have been consistent sellers while FIIs have been net buyers during last 3 months, which coincides with duration of intermediate uptrend. If the FIIs become net sellers, an intermediate downtrend is more or less guaranteed. We expect a flat opening to-day.
Markets are likely to venture more into the red terrain today mainly because of a lack of any major positive cues from the global markets. The domestic markets made a soft start on Wednesday, particularly as global cues weren’t too supportive, but fortunately enough, the markets did not slip down further like some of their Asian counter parts. The continuous weak economic reports from the US markets have raised the concerns of double dip recession and has made the global markets worried. Investors believe that if there is a weakness in largest economy it will ultimately impact the other nations as well. Asian indices continued their bear run on Wednesday as the markets closed in the red, bleeding to touch new lows. The Japanese Nikkei was down 1.66%, on reports of its export growth slowing for a fifth month in July and the appreciating yen against the dollar. It had touched a new 15 year high and that caused some panic amongst the investment community as a siring yen is detrimental to the export oriented Japanese economy. The local equity markets slipped further in the mid-morning session on the back of persistent selling pressure in select heavyweights on valuation concerns. Weak regional peers also weighed down the market sentiment in trade. The Indian equity markets oscillated in a tight range, and were then able to limit losses due to a recovery in most of the European markets. Although the markets were still in the negative terrain near the closing period, the markets managed to recoup some of the losses on the back of a positive opening of European markets, providing the much needed fillip to the local markets, though the European markets too succumbed to selling pressure few minutes after opening in trade today. The benchmark equity indices traded in a volatile manner on concerns raised by RBI that inflation, which has remained stubbornly high for several months, was a major near term challenge for policy makers, though it sees a very strong medium term outlook of the Indian economy. The Indian market ended in red for the second straight trading session on Wednesday, with the BSE Sensex closing at 18,179.64 down 0.72% and the NSE Nifty dropped under 5,500 and eventually closed at 5464.95 with a loss of 0.78%.
US Productivity falls for the first time in 18 months. Jobless claims in US climb. Initial jobless claims rose by 2000 to 4.84 lacs in the week ended Aug7, the highest level since mid Feb. Companies in the US might definitely be loosing confidence in the economic recovery, so might not be hiring.
Greece GDP shrinks for 7th Quarter and unemployment rose as the wage cuts and tax increases that aim to trim the European Union’s 2nd biggest budget deficit deepened a recession. GDP shrank 3.5% from a revised 2.3 pace in the 1st Qr.
Industrial production for the month of June expanded at 7.1% the slowest pace in 13 months. After declining for 2 consecutives weeks, food inflation shot back to 11.4% during the week ended July 31. Disruption in supplies on account of floods ion some parts of north India, rise in food prices globally, costlier cereals, fruits and milk are said to be the reasons behind the rise. Last week the Inflation was at 9.53%.
Markets had been very very volatile for the week. There was hardly any contribution from the Largecap stocks, except few stocks. SBI counter witnessed a power pack rally on back of better that expected results. On the other hand RIL Ind stocks fell on rumors of sell of treasury stocks. Midcap and Smallcap stocks were the star performer of the week.
Nifty and the Sensex closed flat. Midcap and the Smallcap Index were marginally high from their previous weeks close. In the Index gainers JSPL closed up by 6.2%, HUL 4.2%, ONGC 3.8% and Cairn surged 3.3% on stake sell news. SterliteInd closed down 8.9%, M&M closed down by almost 3.5% on Ssangyong buyout news. Rcom corrected 2.9%.
Real Estate Index was the star performer, surging nearly 6%. DLF closed 5% up and Unitech 3.5%. Banking Index also closed higher by 3.3%. SBI rallied the most on back of excellent quarterly numbers. Closed higher by 9%. ICICI Bank & BOR board finally approved the merger. Auto Index closed up 2.6%, with Tata motors contributing the most. T. Motors closed 13.4% higher and Hero Honda up 3%. IT index was the only looser of the week by closing in red. Index lost 1.5% on week on week basis. Wipro and Infosys counter saw profit booking and closed down by nearly 3.5% and TCS by 1.5%.
Some select midcap stocks did see a pretty good movement through out the week. Raymond jumped 55% on rumors on land sale and settlement between the management and Union Leaders. Bombay Deying too had a pretty good rally, which surged almost 16% in the week. Century was up 10.5%. IBreal post quarterly results also closed higher at 14.5%, HDIL was up 7.5% and Arvind mills by 7%. Major Textile stocks closed higher. Jet Airways rallied 10% & GMR Ind ws up 8.2%.
On the first day of the week markets surged and made a new 30 weeks high. Nifty after making an intra day high of 5492 closed down at 5486. For consecutive 3 days after that markets corrected and Nifty made a low of 5372 and closed almost flat at 5416. Nifty on 12th Aug bounced back from the lows and closed marginally in red. A Doji like pattern was made on that day and Nifty closed at its 20 DMA and above the trendline. The day after that i.e. on the last day of the week Markets opened up in green with a gap, rallied for most of the day but corrected some points post lunch session.
Nifty took support at the trendline. In the chart I have marked the last few weeks, Nifty movement. Nifty for the upward movement need to close above the 5490 levels. RSI have also taken good support at the trendline. And bounced back. Nifty on the last day of the week have given some positive signal and further movement can be seen in the coming week. But if the Nifty close below the trendline we might see serious correction.
The only worry is the downward movement of the trendline as compared to the Nifty movement. In the last two month the Nifty movement has been upward but the RSI have been negative. This was the same where the Markets were at its all time high. Any bad news in the Global markets can prove to be a salvage point for the Indian markets. Stay cautious, Don’t take much open positions in the market. Intraday trades are advised.
FII’s have been buyers for the week while DII’s are regularly booking profits at every levels.
Last Weeks call
Sell Baja Auto below 2700 levels. SL 2720. made a low of 2534.
Sell BOI with SL of 438. SL tirggered
Sell BEL with SL of 1767. made a low of 1723.
Buy HDFC with SL of 3030 made a high of 3120.
Buy Ibreal above 174.5. made a high of 198.
Sell Relcap with SL of 796. made a low of 753.
Wednesday, August 11, 2010
Indian markets continued to bleed. Sensex lost almost 150 points today and Nifty was down by 40 points on back of Global sell off post Fed meet. Global markets were also down almost 1-1.5%. Indian markets after an superb rally in the near past, started correcting after reaching its 30-month high. Nifty after making a high of 5492 corrected and will continue till it reaches 5400 levels. RSI has been giving negative signal and MACD is giving negative divergence. If the Nifty breaks the trendline 1 then we might see some more correction.
