Todays Sentence

Never establish a position in the market until you see the potential for a large profit as opposes to a small loss. – Conard Leslie

Stock To Trade 1 03 2011

• Cairn India :- Insync is moving up in Cairn. Buy with stop loss below 335.
• Renuka Sugar :- NR7 bar pattern in Renuka. Buy above 74, Sell below 70.50.

Two consecutive DOJI pattern.

Nifty Watch:- Today Nifty opened at 5335. As budget is coming today the Nifty consolidate in staring period. During the day Nifty made a high of 5498 with a gain of 163 points to its open. From this level nifty falls quickly and made a low at 5310 with a decline of 188 points to its day high. Finally nifty closed at 5343 with a gain of 8 points to its today’s open.
Nifty made another Doji today. This means that the uncertainty is still there in the mind of the bears.

Trend:- The short term trend remains up. The Intermediate trend remains down, with the Nifty trading below its 200 days and 50 days moving average. TA Insync(55-5) is above the level of -45 and moving down. This indicator is suggesting a downside momentum.

Summary:- Today’s market saw a volatility in the trading. Market trading between the ranges of 180 points and closed near to its open. This suggests that the market is in uncertainty. This also indicate that a big move about to come.

Market Outlook FOR 1 03 2011

Union Budget was presented in the Parliament and the markets witnessed a see-saw movement post Budget. It rallied sharply immediately after the Budget speech and Nifty was up more than 3% at one point of time. As the current Budget was low on expectations it seemed more like a relief rally. But, as the Budget lacked any big bang announcements, the higher levels once again attracted selling and Nifty lost almost all its post speech gains in the last 60 minutes to close with a marginal gain of only 30 points. The stocks or sectors that gained post Budget were the ones that were expecting some negative announcements and the absence of such negative measures provided a leg up to these sectors. Cases in point are Auto stocks and tobacco stocks. The banking or financial stocks were also amongst the gainers as FM pegged the fiscal deficit at just
around 4.6%. So, the prominent gainers were ITC, IDFC, TVS Motors, IOB, Central Bank, Reliance Cap, Canara Bank, Federal Bank, M&M and Maruti. Coal India was the biggest gainer as the Coal prices were increased 30%. But this measure had a negative fallout on the user sectors and power and cement stocks reacted negatively. There were some measures to boost infra spending but nothing much to enthuse the markets. Sesa Goa was impacted negatively as 20% duty was imposed on iron ore exports. So, the list of losers had stocks like BGR Energy, Patel Engg., Sesa Goa, Jain Irrigation, Mundra Ports, Pantaloon, Educomp, Reliance Infra, Ambuja Cement, TV18, Ranbaxy and JP Industries. So, the Budget has come and gone and has largely failed to have much of impacts on markets. We are back to looking at Global cues and Crude oil movement. But, since there were no or muted expectations market is unlikely to react much on the lower side. We could see a drop in volatility and perhaps a sideways movement between 5200 and 5600 for the short term. Some base building is likely in certain banking/financial stocks. The Auto counters too could consolidate around current levels before moving higher. But, broadly nothing much seems to have changed technically for the overall markets and the bigger sectors. Nifty must trade above 5375-85 consistently to be in the neutral territory, at least 5250-60 is likely to provide support in the near term.

Stock To Trade 28 02 2011

• Hexaware :- Hexaware corrected to its support and TA Insync is moving up. Buy with stop loss below 52.
• LIC Hsg Finance :- NR7 bar pattern in LIC Housing Finance. Buy above 186, Sell below 180.
• PFC :- TA Turtle upside breakout in PFC 30 mins chart. Buy with stop loss below 240.

Market Outlook FOR 28 02 2011

The Arab States are in a conflict between the rulers and the masses who are the ruled. Demands for an open society and democracy have gained strength to such an extent that the resulting upheavel has caused a conflict in the stock markets, with the bears and bulls battling it out while the market remains volatile. The Nifty has retarced almost its entire up move from 5175 to 5600. I say almost since the low of 5175 did hold on Friday when the Nifty fell a 100 points suddenly, then equally suddenly rallied a 100 points to close the day with gains. But, the week ended with a net loss.
The Nifty made a DOJI today, where the open and the close are roughly equal. The DOJI is a sign of uncertainty. Since we have seen sahrp declines over the past few days, the uncertainty can be in the minds of the bears. After all, they were in full control, then, suddenly on Friday, inspite of lower levels intraday, the DOJi came about. This small pattern suggests that the bears may be apprehensie of further declines in the short term. his matches with the big event that is coming about on Monday – the union budget. Every year, traders enjoy a traditional budget rally. This year, the markets have fallen a 1000 points before the budget. Therefore, we are entering a big news event with declines in the market, and, quite possible, large short positions among traders. This is a strange situation just before the annual poilicy statement by the government. It is uite possible that all sorts of bad news relating to the budget has been discounted y the market. Even the slightest feel good can trigger a rally.

If you are an investor, the markets offer nothing for the time being. In case you have trading positions, a post bugdet rally (if it comes about) should be used to get out of problem positions.
If you are a trader, then the slightest sign of a rally should be used to take long positions. mrkets can surprise us, both on the downside and the upside. In recent days, we have seen many surprises on the downside. We may now be seeing surprises on the upside. When we enter a big news day, there are no valid support and resistance levels. The best way to trade such days is to either take options positions or wait for the news to be over then take a position.

Todays Sentence

I look at losses as a businessperson looks at expenses. Losses are the cost of doing business. – Welles Wilder

Stock To Trade 25 02 2011

• Asian Paints :- TA Turtle downside breakout in Asian paints. Sell with stop loss above 2453.
• AIA Eng :- Oversold TA Insync in AIA Eng. Buy with stop loss below 325.

Market Outlook FOR 25 02 2011

It was a day to forget for bulls and day to cherish for bears. Markets opened on a slight negative note but it was a painful slide throughout the session. The levels were broken with utmost ease as there was not any attempt whatsoever by the bulls. Nifty lost a whopping 200 points before closing with a loss of around 175 points. It was the biggest single day drop seen in many months. No sector or heavyweight was spared as gainers were difficult to spot. The Feb series ended on an extremely bearish note with no buildup whatsoever ahead of Budget. Nifty has now gone below even 5300 while we expected Nifty to find some support around 5375-5400. Nifty is now precariously placed very near to the previous low of 5177 and the momentum as well as the technical structure of many heavyweights suggests that this level is not safe anymore and we could be headed lower towards 5000. The levels of 5375-5400 that were expected to provide support would now act as strong resistance. Any attempts to any technical rebound would find resistance around 5375-5380 and then around 5440-50

Todays Sentence

I’m always thinking about losing money as opposed to making money. Don’t focus on making money; focus on protecting what you have. – Paul Tudor Jones

Stock to trade 23 02 2011

• Pantaloon :- NR7 pattern in Pantaloon. Buy above 274, Sell below 264.
• L&T :- 70 TA Turtle downside breakout in LT 30 min chart. Sell with stop loss above 1635.

Choppy market, Ready for big move

Nifty Watch:- The Nifty opened at 5478 with a gap of 51 points. The Index remained choppy for whole day. It touched its day high at 5519. After that it made a low at 5427 with a decrease of 92 points to its day high and finally closed at 5475, almost at yesterday's close. Overall it’s a choppy market today. Nifty made an inside day pattern today. The Inside day suggests indecision in the market. After such periods of indecision, a big move usually comes about. If the nifty moves above 5520 then it can see an up move, while a move below 5410 should see the beginning of a
downtrend. Traders should watch for these levels to break. Between 5410 and 5520, the market is likely to remain choppy and almost untradeable.

Trend:- The short term trend remains up. The Intermediate trend remains down, with the Nifty trading below its 200 days and 50 days moving average but both are coming closer.
TA Insync(55-5) is now above the level of -45 and still moving up. This indicator is suggesting upside momentum.
Level:- Looking for support at 5400, then 5350. Major resistance comes at 5550.

Market Outlook for 23 02 2011

RIL magic failed to work as the global cues took precedence over the RIL-BP deal. Though RIL remained in the positive territory and traded just around Rs1000 for most part of the session, it failed to have any ruboff impact on other stocks. The other heavyweights were under pressure throughout the session and that kept the indices in check. Nifty did try to trade above 5500 but failed to do so as the European markets too opened on a weak note. The airlines stocks as well as the OMCs were the worst impacted as crude oil zoomed past $ 92 on increasing Middle East crisis. Jet lost around 8% on heavy volumes while BPCL, HPCL and IOC were amongst significant losers. Idea was also amongst the losers as it dropped around 5%. Even the banking stocks that were looking resilient till last session also succumbed to the overall negativesentiments. Some of the top losers were GE Shipping, Cummins, Educomp, IVRCL infra, Bombay Dyeing, Areva, MLL, Sun Tv, Aurobindo, Suzlon, Petronet, Hero Honda and Ranbaxy. RIL led the list of gainers that includes Cairns, HDIL, Titan, GSPL, Indusind bank, Sterlite and Renuka sugars. But, overall it was a disappointing session as Nifty failed to sustain higher levels.
We expected markets to trade higher after the RIL announcement but global cues caught up with the sentiments and came as a shot in the arm for bears. It’s difficult to take any confident call and that has been the case for past 3-4 weeks now. There has been a deluge of bad news and now the global cues are also turning negative. 5375-5400 should continue to be a strong support zone till the budget and we might see a technical rebound from these levels. The stocks that could lead the rebound are Bajaj Auto, Axis Bank, SBI ( support likely around 2680-2700) and RIL. Some others that are looking positive are Sterlite, Indusind Bank, ACC and Sobha.

Nifty has immediate support around 5440, 5415 and then around 5375-80.

DERIVATIVE PICK 22 02 2011

INFOSYS TECH (CASH – Rs.3165.25) : The stock after trading between Rs.3165 and Rs.3020 for the past 15 trading sessions has crossed the upper end of the range and has almost closed at it. The 14 day RSI during this period took constant support at the 40 level which clearly indicates that the stock is shifting into strong hands. Buying is advised above Rs.3178 for a target of Rs.3205 and Rs.3224. Higher target of Rs.3248-3256 is also possible. Stop Loss of Rs.3144 should be kept. For the last target to be reached, the time frame of the trade would be around 6-7 trading sessions.

EDUCOMP CASH (CASH- Rs.511.35) : The stock has been moving up in a slow and steady manner and in the hourly time frame it has already formed a series of higher tops and bottoms. Buying is advised above Rs.515 for a target of Rs.528 and Rs.539. Higher target of Rs.548-5552 is also possible. Stop Loss of Rs.499 should be kept. The time frame of the trade would be around 4-5 trading sessions.

INVESTMENT PICK

DIVIS LAB
Present Price – Rs.646.75, Projected price – Rs.720

Divis Lab is involved in the manufacture of APIs & intermediates for generics, custom synthesis of APIs and advanced intermediates for discovering new compounds in collaboration with global pharma majors. It is also involved in developing building blocks for peptides, nucleotides and carotenoids. Divis is the largest producer of naproxen (NSAID used for the treatment of arthritis) the world (~70% of total consumption) & it is working almost at 20 products in API segment, which would drive its growth in future.

Long-term prospects of pharmaceutical outsourcing to India has great potential and we expect Divi’s to be a key beneficiary of this trend given its inherent competencies and leadership in certain complex molecules. The high growth prospects in the Caretonoids segment would further add to the growth momentum. Divis is setting up R & D unit in Visakhapatnam (SEZ facility), which is expected to contribute to revenue from FY12 onwards. Further, it has plans to expand its high potency chemistry biosimilar and biopharmaceutical products.

In Q3 FY11 Divis Lab reported increase in revenue by 57.8% y-o-y & 21.3% q-o-q to Rs 3.10 billion. Its EBITDA grew 34.4% y-o-y & 37% q-o-q to Rs 1.20 billion and reported adj net profit of Rs 917 million was up by 40.4% y-o-y & 38.3% q-o-q.

We expect the company to report EPS of Rs.22 plus for FY12 which makes Divis and excellent investment bet at current levels.

Stock To Trade 22 02 2011

• HDFC :- HDFC made a NR7 pattern today. Ready for a big move. HDFC stand on its 200 days MA.
• SUN PHARMA : - Sun pharma trading above to its 200 days MA. Sun pharma is in short term up trend. TA Insync moving up.
• Andhra Bank :- Andhra bank made a NR7 pattern today. A big move may come. Andhra bank stand on its 200 days MA.

Uptrend Intact

Nifty Watch:- The Nifty opened at 5460 near Friday's close. The Index remained choppy for first half of the day and touched its day low at 5411. In the last 90 minutes of trading, a dramatic upsurge started, with the index quickly making a high at 5539 - a gain of 128 points from its day low and finally closed at 5529 with an increase of 69 points from the day's open.

Today’s market increase gives a second chance to the investors and traders to sell and exit from trapped buy positions. Investors and traders should not rush in, but wait for the dips to buy.
Trend:- The short term trend remains up. The Intermediate trend remains down, with the Nifty trading below its 200 days and 50 days moving average but both are coming closer.
TA Insync(55-5) is now above the level of -45 and still moving up. This indicator is suggesting upside momentum.

Level:- Looking for support at 5450, then 5350. Major resistance comes at 5600.

Summary:- The choppyness of market will remain for few more days due to pre budget session. Traders and investors should look for the dips only to buy and they should not take more risk. Keep volume light.

Market Outlook for 22 02 2011

Markets opened with a slight negative bias and traded in negative territory for all but last 90 minutes. Nifty dropped to just around 5400 before some strong buying in key heavyweights. IT bigwigs TCS, Wipro and Infosys were the ones that really kick started the recovery and later the others like SBI, RIL and L&T too joined in. RIL came out with its tie-up with BP after the market hours and that should help market to retain the positive momentum. RIL stock should have a positive impact and it is expected to regain four figure mark. SBI has also been resilient and is likely to move up towards 2835-2850. L&T opened on a positive note but then struggled to sustain higher levels and dropped to around Rs 1610. But the rebound from these lower levels suggests that the stock has retained neutral to positive bias and could move up to around Rs1720-25 and then even to around Rs 1765-1775. Overall, Nifty has found support just around 5400 and it looks likely that Nifty may not break 5375-5400 ahead of Union Budget. On the upside resistance could be seen as the markets heads higher to around 5650. Some of the banking stocks like SBI, HDFC bank, Syndicate Bank, Allahabad Bank, BOB, BOI and IOB could see more upside. Others that are looking positive are Welspun Corp, HDFC, Educomp, Sobha, Bajaj Auto and JSW Steel. Nifty has immediate support around 5450-60 and then around 5375-5390 while resistance is seen around 5560-70 and then around 5620.

Todays Sentence

What you have to do is to separate yourself from the money so that you’re thinking of thetrade and not how much money you’re making. That takes a certain amount of disciplinethat’s hard to master, but it’s very important to do if you are going to trade correctly. –George Angell

Stock To Trade 21 02 2011

• HCL TECH :- HCL Tech is giving a bearish signal, bearish on close below 447.
• TCS :- TCS suggests signs of major top, but still pattern is not confirmed. Making bearish H&S pattern.

NIFTY GAINS FOR WEEK, PULLBACK ON FRIDAY

What the Market looks like. We are in an uptrend after a sharp decline. This should be considered a relief rally. But, as rallies go, the market can go up and give a lot of relief. However, the long term trend remains down. We should expect lower levels in the next few months. Nifty Watch:- The Nifty opened at 5566 with a gap of 16 points. The Index quickly made a high at 5589, and then moved down to its day low at 5436 with a decline of 153 points to its day high and finally closed at 5468 with a decline of 98 points to its open.

Today’s market decline may be a correction of the ongoing short term up trend. As we have discussed yesterday, traders should have taken partial profits in the morning when the Nifty was touching 5600. Any remaining short term positions should have been stopped out at 5500.

Trend:- The short term trend is remains up despite today's correction. A close below 5350 is required to change this trend to down.The Intermediate trend remains down, with the Nifty trading below its 200 days and 50 days moving average. We may see choppy market conditions next week with markets responding randomly to various pre-budget events. Fresh buying is suggested if and when the Nifty closes above 5550. These levels will change over time.
TA Insync(55-5) is now above the level of -45 and still moving up. This indicator is suggesting upside momentum.

Level:- Looking for support at 5460, then 5350. Major resistance comes at 5550. After a rally of 414 points this week (from 5175 to 5589) nifty may start a consolidation. Thus coming few days may be trading between the ranges of 200 points - 5350 to 5550

Summary:- As Budget will come in next month thus the market may start consolidation before the budget. This can lad to choppy market conditions. Below the fibonacci retracement down levels are shown in the chart. We note that the Nifty has corrected 38% of the up move. This was the minimum requirement. We could expect a correction towards 50% - 5382 or even 61.8% which will be 5333. Therefore, it is wise to wait till the Nifty either moves up above 5550 or
remains stable at any one of the retracement levels.

Market Outlook for 21 02 2011

The ongoing 5 day rally was cut short abruptly and violently on Friday as Nifty slipped more than 150 points from its intraday peak of 5600. Nifty had rallied another 50 points in the morning session before selling in most heavyweights pushed the indices lower. Selling was seen across the board as bears pounced upon the opportunity. The infra and realty were the first to lose ground but even the banking counters encountered a drubbing. Still, Nifty ended the week with a gain of around 2.8%. Banking index emerged as the biggest gainer with Capital gains and metals index following closely. All sectors finished the week in green. But, as we enter the expiry week for the Feb series the momentum may have shifted towards the bearish scenario as the volumes on Friday were huge. 5350-70 would be the first significant support zone on the downside and while it was broken without much sweat, it is expected to provide some strong support this time around. But more than the technicals, it’s the other happenings that could impact the markets. Monday happens to be the beginning of Budget session and traders and investors would be watching it with anxiety and nervousness. If the parliament is not allowed to function properly then it would provide more fodder to the confident bears and would be a big negative. Then, the CBI enquiries into 2G scam is another event that’s causing much nervousness and there’s always a question hanging in air, ‘who’s next’. Even Friday’s session was hot on various rumors and that may have added to the unwinding/short selling. And then, we have not even touched upon the various international events, be it Middle-east crisis or tightening by China. So, overall next week is expected to be extremely volatile and it would be foolhardy to anticipate anything. As for technical levels, as mentioned earlier 5350- 5370 should be the first hurdle for bears while more support is seen around 5280-5300. Drop to the second support could be utilized for some bargain buying in banking and Capital Goods/infra counters. On the way up, 5510-25 would be the initial hurdle while strong resistance is likely around 5575-5610.

Todays sentence

To truly master trading, an individual must be open to evaluation and change, and to adjustment if necessary, based on the observations and recommendations of those who have been successful over time. – Jake Bernstein

Stock To trade 18 02 2011

• PIRHEALTH :- Piramal Health stops the decline. Ready for an up move.
• Reliance Inds :- Reliance is coming out for a trading range. keep stop loss at 930.
• Sesa Goa :- Sesa Goa is consolidating for last 3 days ready for an upmove. TA Insync is showing over sold, ready for an up move.

Market rallies towards resistance

Nifty Watch:- The Nifty opened at 5496. The Index made a low at 5460 with a 36 point decline, and then moved up to its day high at 5550 and finally closed at 5550 with a gain of 54 points to its open. As we have discussed yesterday about a big move, that move did come about today due to yeterday's NR 7. This 90 point up move rally from its Intraday low to high shows, there is enough bullishness in the market. However, all markets correct. The Nifty has retraced 100% of its down move that started from 5550. It is quite possible that the market may now face resistance at current levels. A pullback could see a correction of 100 to 125 points.

Trend:- The short term trend is up. The Intermediate trend remains down, with the Nifty trading below its 200 days and 50 days moving average but these averages are coming closer with every advance. The 200 DMA is at 4637 therefore, it is now within strking distance of the current close. The average should act as resistance, at least initially. There will be many funds that are probably wanting to sell out, having missed the previous opportunity. These funds may step in to liquidate. If the Nifty continues to move up, crossing the 200 DMA, then we will have a strong buy signal. Let us wait and see. Meanwhile, buy on dips. TA Insync(55-5) is now above the level of -45 and still facing up. This shows us that the up move continues for few days more.

Level:- Looking for support at 5460. Major resistance comes at 5550. Today 4 times Nifty touches this level but could not able to break it and at last nifty closed at this level. So this is a significant resistance for nifty.

Summary:- Today Nifty recovered all the losses of previous downside decline which started from 5550 to 5175. Traders should take partial profit in their long position. 5550 is a resistance for the nifty. If Nifty strongly breaks it tomorrow then we can see a new high also.

Market Outlook for 18 02 2011

After hesitating around 5500 for couple of days and even in the early part of session Nifty finally moved decisively past 5500 and shut shop around 5550. Banks and Capital Goods heavyweight helped the bullish cause as stocks like HDFC bank and L&T pushed for higher levels. IDFC, Suzlon, Bharti, HDFC, Tata Steel and M&M were other significant index gainers. The breadth was positive as more sectors and stocks participated in the rally. Some of the prominent gainers were Sobha, Tata Global, Patel Eng, Jain irrigation, Century, IOB, Educomp, Escorts, Tech Mah, Mphasis, LICHsg, IVRCL, Al Bnk and REC. Few that missed the list and ended up on losers’ list were Unitech, Sun TV, IBReal, Fortis, Auro Pharma, GMR Infra, HCL Tech, Gail and Wipro. Nifty managed to stay above 5450 and finally moved higher to close just around 5550. We have seen around 7% rise in 5 sessions. There is likely to be some resistance around current levels of 5550-75. But, the fact that market held the levels of 5450 and consolidated around 5500 for couple of sessions suggests that after a brief correction/resistance Nifty could move higher to challenge the next crucial levels of around 5625-40. Banks continue to lead and that is good news for bulls. HDFC bank has seen a nice up move and could move further to around 2220-30 before experiencing some resistance. SBI has more headroom as it could target 2830-40 and then 2910-30 in coming sessions. It finds significant support at lower levels around 2730 and then 2685-90. LIC has given a breakout on daily charts and could be headed higher to Rs 215 and even Rs 240. Rs 188-193 becomes a strong support level in the short term. Others that are looking good are HDFC( above 653), Indusind Bank, Allahabad Bank, Andhra bank( above
152), ABG ship and L&T.

Nifty has immediate support around 5470-85 while immediate resistance is just around 5560-75 and then around 5620-30.

Todays Sentence

I think most great traders are no different from great athletes, great musicians or great surgeons. It’s the life-long pursuit of mastering the markets. It means working 10, 12, 18 hours a day – Laurence Connors

DERIVATIVE PICK

JP ASSOCIATES ( CASH – Rs.90.30) : The stock has made a smart rebound and we expect the smallupmove to get converted into a bigger upmove. Buying is advised above Rs.90 for a target of Rs.94 and Rs.96.50. Higher target of Rs.99-101 is also possible. A slightly loose stop loss of Rs.85.75 should be kept. Since it is a positional trade, the time frame would be around 10-12 trading sessions.

STOCK WATCH

LIC HOUSING FINANCE ( LICHF)
Present Price – Rs.193.20, Buy Above – Rs.198, Projected Price – Rs.218-224

LICHF is the fourth-largest mortgage finance company in India. It provides loans for homes, construction activities, and corporate housing schemes. Almost 90% of the company’s loans are to retail customers and the balance 10% to large ticket commercial sector companies. On the technical front, once the stock price crosses the level of Rs.198, it will break out of a bullish pattern and the target of the stock works out to Rs.218-224. The 14 day RSI too after a consolidation between 40 and 60 levels is also ready for a breakout from the 60 levels which once happens will strongly support the pattern breakout.

Stock To Trade 17 02 2011

• GMDC :- GMDC Ltd made a NR7 today looking for a big move. Support at 115, Resistance at 124.
• HUL :- HUL is trading in a range since last 14 days today made a narrow range may lead to a big move.
• IDBI :- IDBI Bank made a narrow range today. May lead a big move. Support at 130.

CONSOLIDATION WITH NR7

Nifty Watch:- The Nifty opened at 5484. The Index made a low at 5458 with a 30 point decline, and then moved up to its day high at 5508 and finally closed at 5493 with a gain of 9 points to its open. Today market consolidates between trading ranges of 50 points. It may lead to a big up move tomorrow. Nifty made a narrow range today which shows us that a big move will come soon, maybe tomorrow. This could be up or down.

Trend:- The short term trend is up. Today’s market is in a process of consolidation. The Intermediate trend remains down, with the Nifty trading below its 200 days and 50 days moving average. TA Insync(55-5) has now crossed above the level of -45 and is moving up. This shows us that the up move which started may continue.

Level:- Looking for minor support at 5450 and major support at 5380. Minor resistance comes at 5500 and major comes at 5550. Nifty made a Narrow range today. This could signal a big move tomorrow.

Market Outlook for 17 02 2011

Markets opened on a flat note and for the whole day Nifty traded in a range of 50 odd points ( 5508 on the higher side and 5463 on the lower side). It oscillated up and down on alternate bouts of buying and selling but could not breakout on the either side of the range. Market response to Tata Steel’s results were positive as the stock closed on a strong note at Rs.641 and it appears that the stock has the potential to cross its previous swing high of Rs.664.50. The other stocks which ended with minor gains were Titan, L& T, Axis Bank, Jindal Steel and Bombay Dyeing. On the other hand stocks which were on the losing side were BHEL, Dr Reddy, HDFC and M&M but the losses were of a very minor nature. A few cash stocks like TTK Prestige, Jindal Polyester and ARSS Infra closed with minor gains with low volumes. As discussed yesterday, we expect the markets to inch up in a slow and steady manner till the presentation of the budget.

Nifty is expected to consolidate between 5450 on the lower side and 5550 on the higher end for some time and once it is able to move beyond 5550, it can move upto a level of 5650-5700. As long as 5450 level is held it would be prudent to trade with a positive bias.

Stock to trade 16 02 2011

• SBI :- State Bank of India is emerging from a double bottom. Price target may be 2900 approx. consider buying.
• PNB :- TA Turtle upside breakout in PNB 30 mins. Chart. Buy with stop loss below 1070.
• Ranbaxy :- NR7 pattern in Ranbaxy. Buy above 620, Sell below 505.

A strong upmove,

Nifty Watch:- A strong upmove, starting from a low made at 5175 continued with the Nifty touching 5500 befoer retreating a bit. The Index is currently in the 5450 - 5500 resistance area. If and when the Nifty crosses this area, the next resistance comes at 5700 approx. Yesterday's notes are repeated for readers since they remain relevant.

1. After almost seven weeks of declines, the Nifty is oversold, ready for a correction on the upside. The current upmove is probably that correction.
2. Time Correction: The up move may last anywhere between three to four weeks, in terms of time.
3. Price Correction: markets have fallen by 1050 points approx. A correction can see the Nifty rally by 400 to 550 points, giving targets of 5580 to 5730 approx. These are only estimates.

Level:- Looking for support first at 5450 and then at 5380.. The resistance comes at 5500.

Market Outlook 16 02 2011

Markets opened on a flat note and after a small decline of 40 odd points in Nifty in the first two hours it bounced back smartly to cross the crucial resistance level of 5500 in the second half. However, it witnessed profit booking around 5500 levels and finally managed to close at a respectable 5481 levels. From the low of 5177 made on 11th Feb, Nifty has rallied to an intraday high of 5506.50 ( recovery of 329 points). Since the recovery has been too swift and sharp, Nifty might consolidate between 5400 and 5550 levels for some time before takes any fresh directional move. Banking Stocks especially the likes of SBI, ICICI Bank, HDFC Bank and Bank of Baroda were the ones which appreciated the most during this rally. Reliance showed a lot of strength in today’s trading and now if it is able to trade above Rs.950, then it will help the recovery to gain further steam as it has the highest weightage in the Nifty. ADAG stocks were in limelight as Reliance Capital and Reliance Infra saw huge volumes. Capital good sector stocks like BHEL and L&T saw selling right from the morning and both of them lost around 2% each.

We expect Nifty to trade in the 5400-5550 band for some time and stock specific action will be more pronounced during this period. One should be prepared to trade both sides of the market for the next 1-2 trading sessions but till budget we are of the view that the market is likely to have a positive bias.

Todays Sentence

My goal on Wall Street was never to get rich but to stay in business. There’s a big difference. If you’re out of the business, you can never get rich. That’s why you have to be especially cautious when you’re trading a larger position size – Victor Sperandeo

DERIVATIVE PICK

JP ASSOCIATES (CASH – Rs.87.55) : The stock has made a smart rebound and we expect the small upmove to get converted into a bigger upmove. Buying is advised above Rs.88.50 for a target of Rs.91.25 and Rs.94. Higher target of Rs.96-98 is also possible. A slightly loose stop loss of Rs.83.75 should be kept. Since it is a positional trade, the time frame would be around 10-12 trading sessions.

Stock To Trade 15 02 2011

• BRFL :- Oversold BRFL Insync. Buy with stop loss below 238.
• IDBI :- TA Turtle upside breakout in IDBI 30 min. chart. Buy with stop loss below 135.
• OBC :- NR7 bar pattern in OBC. Buy above 340, Sell below 330.

TWO DAYS OF RALLY, NIFTY AT 5450 RESISTANCE

Nifty Watch:- One more Monday, the first day of the week - the Nifty opened at 5340 approx then rallied throughout the day to close at 5450 with big intraday gains. After today's gains, the Index has added almost 280 points from Friday's intraday low to Monday's close. This means about 280 points in one trading day - momentum that is not likely to be sustained. So, what is the outlook?

1. After almost seven weeks of declines, the Nifty is oversold, ready for a correction on the upside. The current upmove is probably that correction.
2. Time Correction: The up move may last anywhere between three to four weeks, in terms of time.
3. Price Correction: markets have fallen by 1050 points approx. A correction can see the Nifty rally by 400 to 550 points, giving targets of 5580 to 5730 approx. These are only estimates.
4. A two day rally has seen gains of 280 points. We can safely assume that markets will consolidate for a few days before resuming their advance. It is also possible that the Nifty may remain in a trading range fortwo or three weeks, thus completing the time correction, without hitting the price targets.

Level:- Looking for support first at 5410 and then at 5380.. The resistance comes at 5460, then 5500.

Market Outlook for 15 02 2011

After a long time did we see strongly up trending day as Nifty not only managed to sustain the positive gap, it also built on the gains as the day progressed. Nifty galloped more than 150 points and closed at the highest point of the day. All round buying was see as most sectors finished the day with sharp gains. Banks rallied sharply for the second successive and Capital Goods sector too saw solid gains. L&T was the biggest gainer amongst the index heavyweights. Some of the big movers for the day were United Spirits, PTC, TVS Motors, Tech Mah, Educomp, Apollo Tyres, Jet, IVRCL Infra, Balrampur Chini, GMR Infra, HDIL, Opto, Havells, JP Associates, Welcorp, KFA, Bajaj Hind, Suzlon, BGR Energy, Jindal SAW and KTK bank. Breadth was extremely positive and for a change it was difficult to spot losers though some pressure was seen in RIL, DLF and Rcom. Such strong and sharp rebound has been witnessed for the first time since Nifty started its southward journey from the levels of 6180-6200 in the first week of January. In the two days Nifty has bounced back almost 300 points from the intra day lows of Friday. Nifty is likely to face resistance around 5510-25 and could retreat from around these levels. Most of the stocks that have seen sharp rebounds are approaching decent resistance levels and one needs to be a bit cautious in taking long positions in these. Certain stocks that could still see higher levels are Welspun Corp, HDFC bank( to around 2145-2160), Sesa Goa, TCS and REC.

Nifty has immediate support around 5370-80 and then around 5310-25 while key resistance is likely around 5510-25.

Todays Sentence

At the start of a bear market, nobody knows it is a bear market – they just think it is a correction – Marc Faber

Investment Idea

VIP INDUSTRIES

Present Price - Rs.505.50, Buy Above – Rs.513, Projected price – Rs.552

VIP Industries manufactures a range of hard-sided and soft-sided luggage including trolleys, suitcases, duffels and overnight travel solutions, executive cases, backpacks and school bags. Some of its brands include VIP, Alfa, Footloose, and Buddy. The moulded furniture division manufactures chairs, tables, stools and shells of plastic, marketed under the brand VIP Moderna. The company’s manufacturing facilities are located at Nashik, Nagpur, Sinnar, and Jalgoan in Maharashtra, and in Haridwar (Uttarakhand). Rising disposable incomes driven by buoyant GDP growth coupled with a shift towards better lifestyle ensures strong growth for the luggage industry. VIP, the leader, with a 60% market share, is fully geared to capitalise on the same.
On the technical front, the stock has formed a Morning Star Pattern which has strong bullish implications.
Buying is advised above Rs.513 for a target of Rs.552.

DERIVATIVE PICK 14 02 2011

BHUSAN STEEL :- ( CASH – Rs.378.55) : Buying is advised above Rs.383 for a target of Rs.391 and Rs.398. Higher price of Rs.407 and Rs.412 is also possible. Stop Loss of Rs.369 should be kept.

Stock To Trade 14 02 2011

• BALRAM CHIN :- NR7 pattern in Balrampur Chini. Buy above 68.50, Sell below 65.50.
• Core Pro :- Tech 282.05 Oversold TA Insync in Core projects. Buy with stoploss below 270.
• Fortis :- TA Turtle upside Breakout in Fortis 30 mins. Chart. Buy with stop loss below 147.50.

Big move comes. An 149 point rally in an intraday trading.

Nifty Watch:- The Nifty opened at 5241. The Index made a low at 5180 with a 60 point decline, and then moved up to 5329 with a 149 point rally and finally closed at 5312 with a gain of 71 points to its open. As we have mentioned in yesterday newsletter about a big move. This 149 point move may give us some relief that the intermediate downtrend is going to take a break. But we will have to also look for a strong signal of bullish market.

Trend:- Today’s market remains in an intermediate downtrend. Market is trading below its 200 days and 50 days moving average. TA Insync (55-5) is heavily oversold in a strong downtrend. But it’s now turning up. This shows us a relief rally is very near to us. So wait for a strong signal of buying.

Level:- Looking for minor support at 5250 and major support at 5130. Resistance comes at 5400. Nifty is very near to its support level Today’s 149 point rally shows us that we are in a strong support level. So investors should hold their position and wait for a buying opportunity.

Summary:- The Nifty has come almost close to its support level. Therefore, investors should wait for a base building process. Investors should hold on to their cash. Wait for a strong base building process to start. That will give us a buying opportunity in the market.
The Market made two major highs - One in January 2008 and second in November 2010. Selected sectors crossed the 2008 highs in year 2010, while some sectors remained lower than the 2008 highs.

Market Outlook for 14 02 2011

Finally, we did get a positive Friday after 5 consecutive down (4 out of 5 were severely down) Fridays. It was again a combination of short covering and value buying at sub 5200 levels. The sentiments were again low as IIP data was at its lowest in 20 months. We believe that more than just short covering, it was more to do with value buying by HNIs and institutions that helped the indices to claw their way back up. From a high of 6181 in the first week of January we have lost more than 1000 points in about 5 weeks. Nifty has consistently made lower lows and lower highs and momentum has been so strong that even slightest of rebound have been sold into. Most of the sectors have suffered but the bears have been particularly harsh on infra stocks in this leg. Most of the infra stocks have more than halved in value over last 4-5 weeks. But, the question is whether we have hit a sustainable bottom? It would be too early to take a confirmed call on that as it usually is. Nifty has lost almost 18% and around 5400 also we suggested that Nifty had lost almost 15% from recent top and we could be nearing a sustainable bottom. But, that was not to be as Nifty went through the support at 5350 as momentum picked up on the downside. Technically, we are still in the lower low, lower high spiral. Nifty has initial resistance around 5385 and then significant one around 5440-50. Banking stocks bounced back sharply on Friday and led the overall rebound. Positive divergence in leading indicator, RSI is visible in banking heavyweights like HDFC bank, Axis and SBI but many mid cap banking charts still may not be out of woods. Tata Motors came out with very good numbers just at the closing bell and might see a positive open on Monday. However, it might encounter resistance around 1225-1230. TCS has strong support around 1070-80 and could see a technical rebound from current levels. Renuka sugars that also came out with results on Friday is looking weak and a breakdown is possible below Rs 82. One needs to keep a stop below Rs 82 for all long positions. Hindalco is another one that has displayed weakness over last 3-4 sessions and needs to trade consistently above Rs 220-222 to retain the bullish bias. Certain infra stocks like LITL, GMR Infra, Reliance Infra and IVRCL may have seen what we call climactic selling as they witnessed huge volumes last week. But while it may suggest that these stocks may have seen intermediate bottoms it may not necessarily mean an immediate upside. These stocks could enter a consolidation phase before making an attempt to move higher. To summarize, while we may have some evidence of a market that could be bottoming out it would be too early to take a firm view on that. For traders wishing to go long, it would be better to buy call options or to hedge long futures with put options to minimize risk.

Nifty has immediate support around 5225-5240 and significant one around 5150-60 while resistance is likely around 5375-85 and then around 5440-50.

Todays Sentence

One lesson borne of experience is that the best course in investing is often to do nothing. That’s a hard lesson to apply in practice, given the propensity most of us have for tinkering. - Edward Studzinski

Stock to trade 11 02 2011

PNB :- TA Turtle downside breakout in PNB 30 mins chart. Sell with stop loss above 1003.
Ambuja Cement :- NR7 pattern in Ambuja Cement. Sell below 117, Buy above 120.50.

Market decline continues. Narrow range suggests another big move may be coming.

Nifty Watch:- The Nifty opened 25 point lower at 5260. The Index made a low at 5213, and then moved up to 5260 and down to 5210. Again nifty moved up to 5285 and fell, finally closed at 5224. The movements are given to give you a picture of the lack of direction that prevailed today. Overall it’s a choppy market with a narrow range of 75 points. This narrow range suggests another big move is coming.

Level:- Looking for support at 5130 and resistance comes at 5400. The support is relevant only if prices actually stabilise at these levels. So investors should wait and watch for base building.
Investors should hold on to their cash. Wait for the decline to end, and, a strong base building process to start. That will give a buying opportunity in the market.

Market Outlook for 11 02 2011

Nifty continued to drift lower though the momentum slowed down a bit. Some buying was seen at lower levels in some of the stocks that were butchered yesterday. ADA group counters notably Reliance Infra, was amongst the prominent gainers for the day as it moved up by more than 10% amidst huge volumes. LITL was the biggest gainer on account of profit taking by bears as well as some value buying at lower lower levels. Stock was up more than 20%. Some others that gained some ground were Onmobile, GMR Infra, Jain Irrigation, Polaris, Dish TV, JSW Steel, Ashok Leyland, Crompton, TVS motors and JP Associates. Most of these names have seen deep cuts in last 2-3 weeks. But some of the heavyweights saw fresh selling and that kept indices under check. Bharti, RIL, Infosys and SBI were amongst the index losers. Some of the other significant losers were Tata Comm, Ind Hotels, United Spirits, Bombay Dyeing, DCB, Petronet, Alok and Pantaloon.

Nifty dipped below 5200 for a while before some short covering helped to close it above 5200. But, still the pressure was evident at higher levels as Nifty moved past 5250 twice before slipping back again. Selling seem to have caught up with the relative outperformers now as Tata Steel, Bharti , petronet and TCS lost ground today. Tata Steel has support around 590-95 and closing below it could take it to around Rs 560-65. Petronet too has support around 115 and sustained trades below this could take it lower to around 105. Hindalco is also showing some weakness and has broken down below 218. Nifty could see some more short covering once it begins to trade above 5285-5300. On the downside some support is likely around 5140- 50.

Todays Sentence

At the start of a bear market, nobody knows it is a bear market – they just think it is a correction – Marc Faber

Stock To Trade 10 02 2011

• IOC :- Overbought TA Insync in IOC. Sell with stop loss above 320.
• Aurobindo Pharma :- 1102.90 TA Turtle downside breakout in Aurobindo Pharma 30 mins chart. Sell with stop loss above 1154.

Nifty Watch

Nifty Watch:- The Nifty opened lower with a 30 point gap at 5292. The Index quickly made a low at 5260, then moved up to 5340 and down to 5280, a number of times in very choppy trading. Towards the end of day, the Index fell dramatically to a low of 5230, before some buying finally took it to 5280. Today’s candle resembles a DOJI. A DOJI which comes after a sustained down move may suggest that at least a short term low is in place. So far, the Nifty remains above 5200, aggressive traders can consider taking short term buying positions.

TA Insync(55-5) has gone below minus 60, continued to oversold. In a strong downtrend, this indicator can remain oversold for many days. We can correlate the indicator with the price pattern of a DOJI. Together, this can suggest that the selling may be coming to an end, at least for the short term.

Our downside target is 5130. The Nifty has come almost close to this level. Therefore, traders should wait for the selling to subside and look to take buy positions.

Level:- Looking for minor support at 5230. Major support may come at 5130. The resistance comes at 5400.

Summary:- Aggressive traders who are willing to take more risk in the market may consider buying calls / selling puts or buying futures in the next few days. Please trade with stops. We may see a relief rally take the Nifty all the way up to 5620, but this should be considered as a correction in a bear market, we are in a downtrending market and facing a daily new low.

Investors should hold on to their cash. Wait for the decline to end, and, a base building process to start. That will give a buying opportunity in the market. This requires time. So, keep patience

Market Outlook 10 02 2011

The damage in mainline indices doesn’t truly reflect the kind of carnage that was seen in many stocks. Nifty showed a cut of only about 1% at the close but a look at the list of losers and the kind of damage, reflects the true story. The whole ADA pack was massacred on account of heavy unwinding. R-infra, RMedia, RCom and Reliance Cap lost between 14 to 20% each on huge volumes. Most of the selling was seen in the last 60 minutes. The selling was not restricted only to this group as there were many stocks that suffered more than 10% cut and that too on big volumes. The list includes Aban, BEML, LITL, Bombay Dyeing, Orbit, Punj Lloyd, Onmobile, IVRCL Infra, Srei Infra, GMR Infra, JP Associates and TTML. Most of the stocks on this
list have been under severe bear pressure for past few sessions and had already seen significant erosion in mkt Cap even before today’s big cuts. The list of losers was a big one as breadth was hugely negative. As seen yesterday there were no buyers even at lower levels. There is a clear crisis of confidence at bourses and nobody wishes to even look for bargain buys. Mid and small caps continue to be sold into as reflected in more than 3% cut in madcap index. Few stocks that managed to prop up index were Infosys, M&M, HDFC, HUL and Sun Pharma.

The kind of deep cuts with very big volumes suggest almost a capitulation kind of situation in various stocks, if not in the index itself. Almost all stocks that suffered double digit percentage losses did that on above average volumes. In some cases like the ADA pack it was almost 4-5 times the average. This has come after a sustained bear trend in most of these stocks. This could suggest capitulation and while it may not be a one- day affair, it does point towards almost selling climax. But, it would be better to look for certain other signs, technical as well as psychological before deciding to cherry pick. Nifty continues to make new lows on almost daily basis. 5325-35 is the immediate resistance level while stronger one are placed at 5380-90 and 5440-50.

Todays Sentence

There are many ways to lose money in the market but there are only few ways to make money and there are even fewer ways to retain the money made in the market. – Jake Bernstein

Stock to trade 09 02 2011

• IDBI :- TA Turtle downside breakout in IDBI 30 mins charts. Sell with stop loss above 135.50.
• Infosys Tech :- NR7 bar pattern in Infosys. Sell below 3072, Buy above 3120.

Nifty breaks 5380 support, may see further declines

Trend:- Today’s market shows us an intermediate downtrend. Market is trading below its 200 days and 50 days moving average. We are regularly seeing a pattern of lower highs, lower lows.
TA Insync(55-5) has gone below minus 45, continued to oversold. In a strong downtrend, the oversold condition can persist for some days as market continues falling. But, sooner or later, we can expect a relief rally / consolidation.

Level:- Looking for support first 5130. Minor support may come at 5280. The resistance comes at 5500. Summary:- Nifty breaks its support at 5380 in a bearish market. Fresh short positions should be taken on rallies or through the use of put spreads (buy 5300 put and sell 5100 put). It is also possible for the Nifty to go below 5000 in the month of February, if world markets start going down.

Market Outlook for 09 02 2011

Market reacted negatively to the inconclusive end to the meet called to discuss parliament logjam. Nifty traded below 5400 for the whole session and lack of any support even at lower levels resulted in another sharp cut of more than 1.5%. There were sharp cuts in various counters mainly in infrastructure space. that came out with results yesterday was down more than 17% as the stock collapsed to almost 18 months low. GMR Infra, Punj Lloyd, IRB Infra, GVK, Unitech and NCC witnessed cuts of 6 to 10 % each on relentless selling and almost no buying support even at almost 24-30 months lows. Other counters that witnessed significant loss in market cap were BEML, Ispat, JSW Steel, S.Kumars, KS Oils, Praj, MLL, Indian Info, IFCI, TVS Motors, Triveni, M&M and Titan. There was a clear disinterest in value picking any stock/sector as almost all sectors struggled. Bank Nifty made a new recent low after moving sideways for past 2-3 weeks and that doesn’t augur well for the broader markets. ICICI, HDFC bank and PNB lost ground. Number of mid cap banking counters made new recent lows. Few stocks that did manage to see some stock specific upmoves were Fortis, Bajaj Auto, ABG Ship, NMDC and Auro Pharma. But apart from Fortis that gained more than 5% on huge stocks others just about manage to eke out small gains. Overall, it was yet another good day for bears as they pushed for lower levels on almost no resistance by bulls. Bulls seem to have thrown in towel as levels are being taken out without much effort. Till about two days ago we were discussing the possibility of 5450 providing some support and here we are about 150 points lower even from that level. Almost all sectors are succumbing to the negative sentiments with infrastructure being the current favorite with bears. The way some of the infra stocks have seen erosion of market cap over last 2-3 weeks is simply amazing. Many stocks have entered heavily oversold positions. 5350 has also not held and now we are firmly in the 4800 to 5450 range where we traded for almost 11 months before the Nifty broke out. 5440-50 has become an immediate strong resistance while 5550-60 remains a strong intermediate reversal level. One should be careful to be on the short side as stocks and indices have entered oversold zone and any positive factor (one of them could be Govt agreeing for JPC) could trigger a sharp rebound. 5375- 5380 would be the initial level to watch and then 5440-50.

Todays Sentence

Good money management alone isn’t going to increase your edge at all. If your system isn’t any good, you’re still going to lose money, no matter how effective your money management rules are. But if you have an approach that makes money, then money management can make the difference between success and failure. – Monroe Trout

Stock To Trade 08 02 2011

• Tata Power :- Tata Power may be ready to make a short term low. Consider buying with stop loss below 1150.
• Balrampur Chin :- Balrampur chini has an NR7. Consider buying above 73.50, stop loss below 70.50.

NIFTY FINDS SUPPORT AT 5380

Nifty Watch:- On Monday, the first day of the week, the Nifty opened at 5400. Right from the start, the Nifty showed some efforts for a base building process. The Index moved in a narrow range, probably getting ready for a big move which ultimately did not come about today. In the process, the Index made an NR7 today – the narrowest range in seven days. We can expect a breakout / breakdown tomorrow. The Nifty closed at 5406 with a high at 5444 and a low at 5378. The good news is that the Nifty finds its support at 5380. We have to wait and watch to find out if the support holds..

Trend:- Today’s market shows us an intermediate downtrend. Market is trading below its 200 days and 50 days moving average. TA Insync(55-5) is now oversold. It is possible for this oversold condition to persist with the Index making new lows. But, sooner or later, we can expect a relief rally / consolidation.

Level:- Looking for support first at 5380 and then at 5130. The resistance comes at 5460, then 5500. Summary:- Nifty finds a strong support at 5380 in a bearish market. The trading range of the nifty is 5380 to 5500. If it breaks below 5380 then the decline will continue and a strong breakout at 5500 may see a big rally also.

Market Outlook for 08 02 2011

Market did not do much as indices stayed almost unchanged in the end. But there was volatility during the session. Nifty struggled to sustain above 5400 and the GDP numbers also didn’t help much. Nifty did find some rebound after the GDP announcement but late selling in key heavyweights again pushed it back to around 5400. It was a mixed session as some stocks did find some value picking at lower levels. Heavyweights like Hero Honda, ITC, NTPC, RIL and OMCs were amongst those attracting buyers. But, on the other hand there was selling in banking counters, infra counters, ABB, Jet Airways, Lupin, Cipla, Ranbaxy, Wipro, HDFC, TCS and L&T. Uncertainty about the governance still seems to be the topmost issue and the meeting scheduled for tomorrow to discuss parliament imbroglio might play a crucial role in deciding the short term direction of the market. Anything that favors a smooth functioning of parliament could trigger a sharp rebound in the markets as we are already trading in an oversold zone. But anything that prolongs the uncertainty could be a big negative in the short term. Technically, we are in an oversold market and there is crucial support at 5350. Immediate resistance is likely around 5450-70 and then a crucial one is placed at 5550-60.

Stock to trade on 07 02 2011

• REC Ltd :- NR7 bar pattern in RECL. Buy above 269, Sell below 260.
• BEML :- TA Turtle downside breakout in BEML 30 mins charts. Sell with stop loss above 823.

NIFTY DECLINE CONTINUES, GIVES UP 8 MONTHS OF GAINS

The Nifty closed at 5380, almost at a significant support level, lower for the week, as well as lower for the day. Friday was marked with a one sided move, when the Index opened at 5537 (near to previous day's close), made a high at 5565 then it started a decline for the rest of the day. The Index saw a decline of 209 points from its high to the low of the day, closing with a decline of 157 points to it's today open. On the daily chart, TA Insync(55-5) continues its decline, now coming close to the minus 45 level which is an oversold area. But, in weak markets, the indtcaor can simply keep on getting more oversold. Thus, we should expect a relief rally, but we cannot say when this will come about. It is possible that there may be more declines in between now and a rally.

Earlier, we had identified two significant support levels for the Nifty - 5380 and 5130. The Index has reached 5380. We now have to be patient and watch if the market will find support at current levels or continue down towards 5130.

Level:- Looking for support first at 5380 and then at 5130. Resistance comes at 5500.
Summary:- The Market is in an intermediate downtrend. So far, there are no signs of any change of trend.

Traders should take most trades on the short side.

Market Outlook for 07 02 2011

Friday session put paid to all expectations of bottoming out as benchmark indices nosedived. It looked like for first four days of last week as if 5400-5450 would prove to be a formidable support zone but one-sided move on Friday was enough to push even the hardcore bulls in a corner. Nifty lost over 130 points to slip below 5400 while Sensex shut shop just around 18k. This was the worst close in around 6 months. Carnage was seen across sectors as sentiments turned hugely negative towards the later half. On weekly basis, it was the relatively safe sector, FMCG was the worst impacted. BSE FMCG index lost over 6% during the week as investors sold heavyweights like ITC and Levers. Realty, Auto and the IT were the other ones that suffered the most, losing around 3% each. BSE metal index managed to eke out marginal gains on a relatively better show by Hindalco, NALCO and Tata Steel. Again, the global backdrop was positive as US indices moved to new post-Lehman highs. Local issues continued to bother investors.

Our expectations that Nifty might have seen a credible low around 5400 and we could see a sustainable rebound came to nought on Friday. The sheer momentum of the fall was unnerving as Nifty collapsed almost 185 points from its intraday high of 5556. Fall was aggravated due to weekend unwinding as traders rushed to square off any long positions. The fact that the worst impacted stocks were the ones that had held on relatively well suggest that investors and traders are in a panic mode now. The momentum is usually at its highest closer to the peaks as well as bottoms. Again, despite the sharp fall on Friday we do believe that Nifty might be closer to bottoming out though the momentum suggests otherwise. We have already seen correction of around 15% from November top and usually the normal corrective moves are of 12 to 17%
magnitude. Then as already suggested on earlier occasions also Nifty provided stiff resistance between 5350 and 5500 when we were trying to move higher. As an INVESTOR with at least 6 months view it would be advisable to invest a part of investible funds in companies that have shown good quarterly numbers. As a trader the momentum is still down and it would be better to wait for some bottoming out patterns to emerge before attempting long positions. Nifty now has immediate resistance around 5440-5450 while immediate trend would change for better only on a sustained breakout beyond 5550.

Stock to trade 04 02 2011

• Titan :- TA Insync overbought in Titan Industry. Sell with stop loss above 3640.
• Dish TV :- NR7 pattern in Dish TV. Buy above 61, Sell below 59.

Nifty Watch :- BULLS HAVE THE DAY, MARKETS IN TRADING RANGE

While the bulls were in complete control today, the Nifty remains in a trading range between 5420 and
5550. This is a narrow 130 point range which has been established over a period of four days. It is quite narrow to sustain for any length of time. Then, we can expect a breakout/breakdown from the range, any day. A close above 5550 will tell us there is more upside. A move below 5420 will give suggestions of

significantly more downside.Support comes in around 5480. A dip to 5480 may be considered as a buy on dip. Of course, keep a stop. A breakout above 5550 should be used to initial / add new long positions. Of course, below 5420 all buying should be suspended.
The bank Nifty remains in a consolidation, just like its big boss - the Nifty. The Bank chart has an Insync indicator which is much above the minus 45 oversold area. This could mean any one of the two options: (a) Banks are outperforming with the indicator remaining high up OR (b) The Insync indicator has lot of room to fall as it goes towards the minus 45 oversold level. It is not easy to determine which of the two options may work out. To keep trading simple, a breakout from the trading range is a buy.

Market Outlook FOR 04 02 2011

Finally, we witnessed a rally that was able to sustain for a whole session. Nifty opened on a slightly positive note and kept on building momentum as the day progressed. It was a mix of buying in some stronger counters like Hindalco and short covering in highly oversold counters like DLF and others. Heavyweights like SBI, L&T, RIL and Tata Motors witnessed some interest at lower levels and for a change this interest persisted for the whole day. Bharti was the biggest gainer amongst the index heavyweights as it gained over 5%. Some of the other big gainers were Polaris, DLF, HDIL, JP Associates, Syndicate bank, Renuka, REC, Bata, IVRCL Infra, Hindalco, Sintex, HCC, Adani and Exide. But , there were a few that remained on the selling list. The list includes Sobha, Cummins, Voltas, OFSS, Ashok Leyland, IOC and HCL Tech. Nifty managed to close above 5500.
Nifty faces immediate resistance at around 5540-50 but as stated earlier also we believe that the rebound has some more legs to it and Nifty could inch up towards 5650-5680. The efforts to break below 5400 have been unsuccessful despite strong negative sentiments. It seems that combination of short covering and value buying could sustain Nifty and should it take it higher. Even the weaker stocks/ sectors like realty and infra could also move higher on short covering. The stronger stocks are Hindalco, Bharti, Sterlite, TCS and Tata Steel. Banks have seen consolidation for past 7-10 sessions and could now move higher. The better looking charts in the short term are SBI, ICICI, Syndicate bank, Indusind Bank and Union bank. Bank Nifty might move above 11000 in coming sessions. Hindalco has given a break out above 240 and one can accumulate it for next technical target of around Rs 265.

Nifty has immediate support around 5465-70 while above 5550 it could move to around 5620-30.

Nifty Chart

• Nifty started the day with a flat opening and gained momentum after first hour of trading breaking the resistance of 5480 and 5520 and finally closed at 5526.
• The short term down trend for the market would reverse and traders can initiate long positions with 5380 as stop on closing basis.
• Today market is expected to trade in the range of 5380– 5620.
• Wait for any fresh trade in nifty.

Todays Sentence

Patience is important not only in waiting for the right trades, but also in staying with the
trades that are working. The failure to adequately profit from correct trades is a key profitlimiting factor. – Jack Schwager

Stock To Trade

• TV-18 :- NR7 bar pattern in TV-18. Buy above 77.50, Sell below 75.50.
• Cipla :- TA Turtle downside breakout in Cipla 30 min chart. Sell with stop loss above 330.
• Cairn :- Oversold Ta Insync in Cairn. Buy with stop loss below 327.

Nifty shows strong support

Nifty Watch:- Today nifty open gap up at 5470 with a gain of 47 points, And remain in a range between 5450-5510, finally in the last trading hour Nifty faces a decline of 80 points and closed at 5429, very near to last day close.

Trend:- Today’s market shows an intermediate downtrend. Forming pattern of lower highs - lower lows and also market is trading below its 200 days and 50 days moving average.

TA Insync is now oversold. Thus we can expect a relief rally soon enough.

Level:- Looking for support first at 5380 and then at 5350. The resistance comes at 5510.
Summary:- Today’s market shows some bullishness at its start but at the end it closed near to previous day closed.

Market Outlook for 3 2 2011

Markets shed all its intraday gains towards the close. Mr. A. Raja’s arrest by CBI triggered the change in sentiments as Nifty suddenly shed about 50 points in a matter of 15-20 minutes. But, whatever the reason, fact is that Nifty is unable to sustain higher levels and this is in a backdrop of persistent positive global cues. There were a number of stocks that did find buying support at lower levels, be it on short covering or value buying. But, there were more stocks that weighed heavily on the indices. Hero Honda reacted negatively to its numbers and was the biggest drag on indices. Other index losers were NTPC, Bhel, Bajaj Auto and HDFC.

Nifty failed to move past 5500 and closed almost unchanged at 5430. Despite, the late sell-off we continue to be of the view that Nifty is unlikely to sustain below 5400 and this level is likely to provide a strong support even if a temporary one. On an intra-day basis we might slip to around 5350 but closing is unlikely below 5380-5400. RIL is witnessing strong volumes around Rs 900 and a move above 930 could take it to around Rs 965-970. Volatility is likely to be on higher side as market tries to find a bottom.

Nifty has immediate support around 5380 and then around 5350 while resistance is likely around 5485-90 and then around 5550-60.

Today Advise

The markets seem very irrational in the short term, but are very rational in the long term. It is this paradox that confuses most traders. – Rashesh Shah

Nifty Detail View on 2 2 2011

Nifty Watch: - Today Nifty open with gap up at 5542, and then faced a big decline almost after open. We saw an one sided trend, with the Nifty finally closing almost a 100 points lower at 5423 point, giving a decline of 119 points from its open. Today’s close (and low) is the lowest point of nifty since 31 August 2010.Today’s market ends the rally which started from Sep 2010. Thus, in a period of six months, the markets have come full circle, first going up, and, now giving up all the gains.

Trend:- The Market is in an intermediate downtrend. We have the pattern of lower highs - lower lows and also market is trading below its 200 days and 50 days moving average.

The Nifty has not yet touched the level of minus 45 on TA Insync (55-5) which means market is still not oversold.

Level:- Looking for support first at 5380 and then at 5220. The resistance comes at 5470 and then 5540.

Summary:- Today’s market made a new low since August 2010. A large consolidation during June – August had a low of 5350. If the Nifty were to break below this low, we would be in a bear market. We feel that lower levels are coming. The world is de-rating the Indian markets. Even today, the Nifty sells at a PE of 21 while most emerging markets sell at much lower PE ratio. We have to accept the fact that the India Story while remaining intact is no longer a glamour story. Investors can wait for lower levels and base building while traders should go with the intermediate trend which is down. Traders should also be ready for a sudden, sharp relief rally that can come about any time.

Market Outlook for 2 2 2011

Market opened on a flat note but saw huge selling immediately especially in stocks like Tata Motors whose monthly sales figures disappointed the markets in a big way. Yesterday’s gainers like Bank of Baroda, Canara Bank and SBI gave up all its gains.

Weakness and heavy selling by FIIs in Tata Motors and Reliance broke the strong Nifty Support of 5425 and the market finally closed on a very weak note. The factors which are affecting the market in a big way are the macro concerns like interest rates, inflation figures and serious governance deficit which has weakened the sentiments in a very big way. ADAG stocks witnessed fresh bouts of selling as Reliance Infra closed below Rs.700 and Reliance Capital made an intraday breach of Rs.500. Titan made some brave attempts to rally but that too faced a lot of resistance around 3650 levels. The only stocks which showed some decent buying were HDFC and HDFC Bank.
There is very little one can do at this stage and hence it would be prudent to stay on sidelines. Bottom picking the market would be like catching a falling knife. Hence, we are of the view that one should not invest fresh money in the market till the time markets make a higher bottom atleast on the hourly charts. Nifty will now face strong resistance at 5450 and 5485 levels. It might find some support around 5350 levels and if this level is broken, the next important support lies only at 5295-5310 levels.

Nifty Look on 2 2 2011

• Nifty continued the downtrend and lost all the previous day’s gains thus engulfing the previous candle.
• 5340 is the immediate support for the market while 5480 is the immediate resistance for the nifty.
• Today market is expected to trade in the range of 5300– 5580.
• Hold nifty with stop loss 5520 on closing basis..