Stock To trade 01 04 2011

• ITC :- TA Turtle upside breakout in ITC 30 mins chart. Buy with stop loss below 176.
• CAIRN INDIA :- NR7 pattern in Cairn daily chart. Buy above 353, Sell below 348.

And then there were Eight!

Wow! The Nifty has recorded eight consecutive days of gains. Yet, as I have written earlier, this is not a record since in the 2009 bull market, there were 14 consecutive days of gains. So, eight and still counting! The Nifty was choppy today, thanks to the F&O expiry which was scheduled for the day. F&O expiry days are not good days for trading. There was an intraday dip of almost 100 points – a buy on dips opportunity. Such opportunities are coming every day, with the Nifty usually falling 40-50 points intraday before recovering. Manage the risk in Long Positions. With every passing day, there is increased risk in long positions. It is possible that markets can keep on going up day after day, but sooner or later we will have a correction, and, a dip. Traders should ensure that they cut their positions when trend indicators on their charts give a sell signal. Trend indicators include change of direction of ZeroLag MA (21 or 34) , MACD with 17,9,12, Ta-Trend crossover of trendline below signal line, TA-Insync 55-5 crossover of insync line from +45 to below, Trix crosses below its

signal line…. The intra day charts should be at least 15 minutes and higher.

DERIVATIVE PICK

• SHRIRAM TRANSPORT FINANCE (CASH – Rs.796): The stock has almost on the verge of breaking out of a bullish pattern in the daily charts. Buying is advised above Rs.805 for a target of Rs.818 and Rs.829. Higher targets of Rs.838 and Rs.849 is also possible. Stop Loss of Rs.789 should be kept.

• JP ASSOCIATES (CASH – Rs.92.80): Buying is advised above Rs.93.50 for a target of Rs.96 and Rs.98. Higher targets of Rs.102 and Rs.105 is also possible. Stop loss of Rs.88.75 should be kept. The time frame of the trade would be around 8-10 trading sessions for the higher target.

Market Outlook 01 04 2011

Markets celebrated India’s march to WC Finals by extending its amazing rally to eighth successive day. The trading session had its ups and downs as did the Semi Finals match against archrivals Pakistan. Nifty zoomed up by more than 80 points before giving up all its gains later in the day. But, short covering and some 31st March buying by institutions lifted the indices once again towards the close. Nifty ended the session as well as the March series of derivatives at 5833. Nifty gained 570 points in the March series, more than 10% rise. In the last 8 days itself Nifty has put on almost 500 points. Again, it was an all round show though IT heavyweights hogged the limelight. IT index was up 2% as strong rally was seen in TCS and Infosys. Banks witnessed some profit taking at higher levels as Bankex finished the day in negative territory. Some of the top gainers for the session were Adani, RPower, Hexaware, Cummins, HDIL, Reliance Infra, Welcorp, Polaris, Sobha, Apollo Tyres, DLF, Bajaj Auto, ITC, FT and Hero Honda. SBI led the list of losers by shedding more than 3% on heavy volumes.

Some other losers were Indusind Bank, Jet Airways, ABB, HCC, Yes Bank, Educomp, Onmobile, IOB, Ambuja Cement and IVRCL. It was an amazingly good series for the bulls as the sharp rally seen over past 8 sessions may not have been comprehended by even the staunchest bulls. Month of March that is notorious for its bearish undertones provided much needed relief to the eleaguered bulls as Nifty gained around 10%. Nifty is now trading above 5800 and the momentum indicators are now in overbought territory. Nifty has moved past the expected resistance zone of 5730-5770 and now this band should provide short term support to any decline. The rally has been extremely sharp and it would be difficult to take a call on resistances but now the immediate threat to the rally is placed around 5900. Banks have been the leaders thus far and today’s behavior of Banking heavyweights suggests some halt in the uptrend. We are entering a new series and new month and would need to take a fresh guard as far as trading is concerned. Some stocks that have seen fresh breakouts are RPower, HDIL, Hexaware, Hero Honda( above 1610), FT( above 890), Exide( above 143) and RIL( above 1055). Nifty is now trading above crucial levels of 5750-70 and this should provide strong short term support while resistance is seen around 5900.

Stock To Trade 30 03 2011

• IOC :- Bullish reversal candlestick pattern and upside breakout in IOC daily chart. Buy with stoploss below 320.
• Andhra Bank :- TA Turtle breakout in Andhra Bank. Buy with stoploss below 146.

Nothing to worry, Nifty keeps on going up

The Nifty closed higher for the sixth day in a row. This is not impossible, since the Nifty has closed higher for 14 days in a row, in the 2007 bull market. I do not know if we will replicate that record, but markets can do anything. As traders, we must learn the art of following the market rather than trying to dictate (to the market). The chart below shows the head and shoulder in the Nifty, giving a target of 6100 approx. The pattern has an up sloping neckline, not clean, but then we cannot have price patterns made to order. The second chart shows an ascending triangle in the Nifty, two resistance points at the same level, and two support points which are ascending – this is a perfect pattern, so we can go for it. Pattern targets here are 5900, but the targets are just that – probable estimates.

There is no need for levels. Watch your charts. try to be with lower time frames – 5 minute, 15 minute and so on. If a trend indicator gives a sell signal then exit positions in that security. This is a safer way to trade than trying to bully the market into some level or the other.

INVESTMENT PICK

KAVERI SEED ( KSCL)
Present Price – Rs.321.25
Projected Price – Rs.360 ( First target ), Rs.405 ( Second Target)

KSCL Established in 1974 by Mr GV Bhaskar Rao (an agricultural science graduate), Kaveri is one of the oldest seeds companies in India. Kaveri started out as a provider of varietal maize, sunflower and paddy seeds, and later graduated to developing more productive hybrid seeds across different crop segments. Till recently, Kaveri’s business was largely focused around the southern and western states of Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra. In a clear reflection of Kaveri’s competitiveness and its strong R&D capabilities, Kaveri is among the
top three companies in hybrid maize, hybrid sunflower, pearl millet and a variety of rice segments in its representative regions.

Kaveri’s key product segments include maize, sunflower, BT cotton (new product launch), paddy,
pearl millet and its organic food business, Microtek. Kaveri Seed ( KSCL) is an interesting small-sized play on the expected boom in the hybrid seeds industry in India. Kaveri is one of the oldest players in the Indian organized hybrid seeds market and among the strongest in the Indian corn and sunflower markets. Given the high entry barriers in the hybrid seeds business, strong indigenous R&D capabilities are the key to success, and Kaveri has focused on acquiring strong R&D capabilities over the years with a smart choice of “right crops”.

KSCL has been in the business of production, processing and marketing of seeds for over two decades. It has a pan- India presence with a comprehensive product portfolio and a strong R&D team. Kaveri Seeds has built a comprehensive product portfolio of commercial crops in India. The company has developed many new hybrid seeds and a strong pan-India distribution network, making it a significant player. Over the past few years, Kaveri Seeds has diversified its product portfolio, which now includes maize, cotton, sunflower, paddy, bajra, jowar, grain sorghum and vegetables. However, the main products are maize, cotton, sunflower and bajra.
Kaveri Seeds has higher operating margin compared with peers due to its presence in crops where demand is higher and realisations are better. Looking ahead, the margin should improve further due to the contribution from hybrids that were launched recently and which have found high market acceptance.

Kaveri has acquired critical mass and is well placed to move on to the next growth trajectory. Till recently, Kaveri was a regional player with focus on corn and sunflower, and footprint largely limited to Karnataka and Andhra Pradesh. Kaveri is now working on expanding its geographical footprint to North India as well as entering newer crop segments like hybrid paddy, BT cotton and hybrid vegetables. While this transformation offers exciting growth possibilities, the management has indicated 20-25% CAGR in revenues and faster profit growth over FY11-13 Kaveri’s strong R&D focus is one of its key competitive advantages. This is clearly reflected in Kaveri’s strong brand equity and high market share in corn and sunflower segments, and enhances confidence in the company’s ability to successfully target newer crops like hybrid paddy and cotton. It has an Equity Capital of Rs.13.70 cr with a strong Book Value of Rs.110. Last paid dividend was 20%. In the first nine months ended FY11, it reported sales of Rs.216 cr and a Net Profit of Rs.37.49 cr. We expect the company to report EPS of Rs.32 for FY11. and around Rs.45 plus for FY12. The current price of Rs.321.25 leaves ample scope for appreciation.
Buying is advised for medium to long term investment with a time frame of 3 to 6 months.

Market Outlook for 30 03 2011

Bulls continued to have a great spell in the middle as Nifty gained for sixth consecutive session. Nifty was up almost 80 points mid session before some profit taking pared some of the intra day gains. Still, Nifty finished the day above 5700 at 5736. Bharti led the list of index gainers as it posted gains of around 3%. HDFC, ONGC, DLF and Sterlite were some of the other top contributors to index. Banks too had yet another good day at office as Axis Bank led the list of banking gainers. Some of the top gainers overall were Max, Mphasis, DCHL, Srei Infra, Neyvelli, RCom, Sesa Goa, Allahabad Bank, Onmobile, IVRCL, Bata, BPCL, Maruti, DrReddy and Yes bank. Tech Mahindra encountered some late selling as the stock plummeted over 4.5%. Some others on the losing list were Moser Baer, Sterlite Tech, HOEC, IFCI, Welcorp, Tata Global and Ruchi Soya.

Nifty continued its dream run as it now trades within the zone that could provide some stiff resistance. HDFC faces some resistance around 690 and sustained trades above 690 could mean a strong breakout that could open up potential targets of around Rs 740-750. DLF is also on the verge of breakout and sustained trades above 255 could potentially take it to around 280-282. Some other stocks that have positive patterns are Sesa Goa( above 285), OnMobile, Crompton( above 275), Indian Bank, BOI, JSPL and JSW Steel( above 926).

Nifty is now trading within the resistance band at 5740-5775 while support is seen around 5650-65 and then 5610-20.

Stock To Trade 29 03 2011

• INDIAN BANK :- TA Turtle upside breakout in Indian Bank 30 mins. Buy with stop loss below 224.
• Apollo Tyre :- NR7 bar pattern in Apollo Tyre. Buy above 69.50, Sell below 68.

Five days of gains in Nifty, consolidation likely

We had a wide range day (WR) seen on Friday when the Nifty had a range of 140 points (including the gap). This is the widest range in many days, hence it qualifies as a WR7 (widest range in 7 days). What happens after such wide range days? Markets will usually consolidate giving rise to noise and choppiness. The correct way to trade such noise is by using lower time frames.

What is the trend? We measure the intermediate trend is different ways: (1) The TA-Insync(55-5) is up (2) Zero Lag Moving Average 34 is moving up (3) Ichimoku is in an uptrend with the red line above the blue line. Now, readers should use any one of the three methods to measure the trend. If you use Zero Lag then check the direction. Moving up means UP trend, and, moving down means downtrend.

My point is: trend is up, no matter what you use. Second point is: do not fight the trend. If you feel that the rally is unjustified, then stay away, but selling short is not a good idea. Traders can take short side trades only when their intra day charts give a short signal in any of the above trend methods. Volume should be low since the short trades will go against the trend. If the trade appears to work out, then add volume. The correct trade is to buy on corrections. use 5 minute or 15 minute charts to get buy signals from any of the three methods. When you get this siganal, go for it.

Is the Nifty making an inverted head and shoulder pattern? Answer is: Yes. The neckline is sloping up, currently at 5700. A close above this number will confirm the pattern. I will give the chart on tuesday evening.

Market Outlook for 29 03 2011

The week began on a happy note as markets had a steady day. In fact, Sensex as well as Nifty briefly went past the psychological level of 19000 and 5700 respectively. Autos, Capital Goods and Banks had a good day while some profit taking was seen in Healthcare, Metals and IT stocks. Index heavyweights that helped the indices move higher were Bharti, L&T, IDFC, Tata Motors and HUL. LIC Hsg however hogged the limelight by posting intraday gain of around 8% amidst huge volumes. Some other prominent gainers were Sterlite Tech, GT Offshore, Noida Toll, IDBI, LITL, IVRCL, TVS Motors, IRB, Dena Bank, Vijaya Bank, Sintex, Godrej Ind and Federal Bank. Auribindo Pharma was the biggest loser as it shed more than 6%. Some others that lost were Pantaloon, Piramal Health, Sun Pharma, Core, Jain Irrigations, Suzlon, Unitech and GMDC.

It was fifth successive day of gains for markets as Nifty moved towards 5700. In fact, Nifty has gained around 350 points over last 5 sessions. There could be a brief consolidation/resistance as market grapples with twin psychological resistances of 200DMA as well 5700/19000. 5735-5770 could provide stiff resistance to the uptrend and one need to be careful around these levels as far as long positions in Nifty are concerned. Stock- specific moves could hog the limelight even as indices consolidate/correct. The mid cap banking counters could see action as technically some of these like Andhra Bank, Federal, OBC, Uco and Dena Bank are looking positive. IFCI has given a breakout above 55 and could target Rs 61-62 if it sustains above 55. Auto stocks like Bajaj Auto, TVS, Ecsorts are also showing positive intent. LIC hsg closed at almost 4 months’ high and sustained trades above 215 could take it to around Rs 240-245.

Nifty faces stiff resistance around 5730-5750 while support is seen around 5620-30 and then around 5545- 60.

Stock To WAtch 28 03 2011

• PFC :- Bullish reversal 3 white solders pattern in PFC daily chart. Buy with stop loss below 240.
• GTOFFSHORE :- NR7 pattern in Great Offshore from last 3 days. Buy above 248.50, Sell below 241.50

BIG UP MOVE IN NIFTY BRINGS INDEX ABOVE 5600 RESISTANCE

On Thursday, the Nifty made an NR7 day. In our letter we suggested that Friday may see a trending move and traders should follow the intra day trend. Friday’s big rally in the Nifty has taken the Index above 5600. It has also changed the trend of TA-Insync which we track to identify the intermediate trend. Now, the Nifty has broken out of the 5400 – 5600 range, this time on the upside. On Monday, the Index was trading below the range support of 5400. The Market has given two moves out of the range, first down, then upside break on Friday.

Will this breakout be sustained? The Nifty has rallied from 5350 to 5650 in just five trading days. After such strong moves, markets are likely to consolidate. We will wait for the process of consolidation. If the Nifty moves up after the soon-to-come consolidation, then the trend certainly changes to up.

DERIVATIVE PICK 28 03 2011

• AXIS BANK (CASH – Rs.1364.95) : The stock has closed on a very strong note and after a very long timehas given a bullish breakout by piercing and closing above the crucial resistance line. The 14 day RSI toohas broken out of an ascending triangle pattern and has crossed the crucial 60 level giving strength to theprice pattern breakout. Buying is advised above Rs.1371 for a target of Rs.1394 and Rs.1412. Higher targetof Rs.1435 and Rs.1452 is also possible. Stop Loss of Rs.1334 should be kept. The time frame of the tradefor the final target would be around 8-10 trading sessions.
  

• JINDAL SOUTHWEST HOLDINGS (CASH – Rs.944) : The stock has closed on a strong note and we areof the view that the worst for the stock is over. Buying is advised above Rs.958 for a target of Rs.982 andRs.999. Higher target of Rs.1029 and Rs.1062 is also possible. The explosive move would come only aboveRs.982. Stop Loss of Rs.919 should be kept.
  

Market Outlook FOR 28 03 2011

Markets opened with a huge positive gap primarily on account of positive global cues and the best past of Friday’s trading was that bulls maintained a firm grip on the whole day’s proceedings and managed to closed on a very strong note. Stock markets mimicked Indian cricket team's all round performance as bulls went on rampage sending stocks across sectors rallying. Heavyweight stocks like Infosys, ICICI Bank and Reliance Industries anchored the BSE Sensex and the S&P CNX Nifty to two-month closing highs. The market breadth was strong. All the sectoral indices on BSE logged gains. Auto stocks were in demand on renewed buying. Banking stocks extended recent gains after the government tabled banking sector amendment bill in parliament. Metals stocks extended Thursday's gain on hopes of higher demand as Japan begins redevelopment after a devastating earthquake and tsunami on 11 March 2011. Software stocks were in demand on encouraging US tech earnings overnight. Fertiliser shares edged higher on reports of higher demand for fertilizer in the upcoming monsoon season.

Nifty will now have to cross the crucial resistance of 200 DMA of Spot Nifty which lies at 5688. There could be a small pause at this level which is just 30 odd points from the current level. We would advise investors and traders to watch this crucial level closely as one can expect short term reaction from this level.

However, any short term correction should be used as a buying opportunity The immediate resistance for Nifty future lies at 5725 and 5765 levels whereas it has short term supports at
5645 and 5610 levels.

Stock to watch 25 03 2011

• BPCL :- TA Turtle breakout in BPCL 30 min chart. Buy with stop loss below 570.
• LIC Hsg Fin :- NR7 bar pattern in LIC Housing Finance. Buy above 200.50, Sell below 197.

Three days of gains, Nifty is now at point of breakout: will the Index move up?

The Nifty closed at 5522, up another 42 points, giving the index three consecutive days of gains. We can identify the resistance levels for the Index somewhere around 5550. If the Nifty were to close above this resistance, then we will have a breakout on the upside. The market is certainly giving many whipsaws, with periods of sudden optimism and pessimism. This is the nature of the trading range. When prices start moving up in the range, we have an impression that everything is going to be fine, see prices are moving up.
When prices start moving down, we get pessimistic – range will break down. What actually is going on is – just noise inside the range. A decisive trend emerges when prices move out of the range. Now, the Nifty did go below 5400 so we had a decisive breakdown of the range. Then what happened? Well, the index turned back, move above the half way mark at 5500 and is now currently higher than 5500. This raises the question: are we confronted with a false breakdown? With some regret, there is no clear answer to this question. The Market itself will tell us if the earlier breakdown was a false move. We have a pivot high identified earlier – 5535. A close above 5535 will give us a higher high. A close above 5600 will give us a confirmed breakout on the upside, but, then, even this can fail.
What happens if we have two failed breakouts - one on the downside, then one on the upside? Well, this would certainly be a choppy market – we have to accept such movements and hope that the choppiness will end soon.

Nifty Levels: Today (Thursday) was another NR7 day. We can usually expect a trust after NR7 days. Therefore, if the market begins to move up or down, go with the flow, chances are there will be a trending day.

DERIVATIVE PICK

DENA BANK (CASH – Rs.99.50) : The stock is on the verge of an ascending triangle pattern which is bullish by nature. Buying is advised above Rs.101 for a target of Rs.105 and Rs.108. Higher target of Rs.110-112 is also possible. Stop Loss of Rs.93.85 should be kept. The time frame of the trade would be around 12-13 trading days.

Market Outlook 25 03 2011

It was a steady day at the bourses as Nifty traded above 5500 for majority of the session. Decent showing was seen in almost all sectors with Realty and banking leading the way. Unitech was up almost 10% on very good volumes. Many mid caps again hogged the limelight. There was strong buying in stocks like Videocon, Orbit, IBReal, Sobha and Dish TV. Auto and metals also witnessed value buying at lower levels. Ashok Leyland, Hindalco, Welcorp and TVS Motors were the major gainers from these two sectors. Some other prominent gainers were Aban, Karnataka Bank, Pantaloon, IDFC, ABB, Tech mahindra, REC, GVK, Kotak and Yes bank. Some of the yesterday’s gainers met with profit taking and shed some weight. The list includes Tata Com, Lupin, Havells, GAIL and Renuka sugars.
Nifty gained for the third consecutive day which is a rare occurrence in the present volatile scenario. But, that also means that Nifty is now staring at strong resistance zone of around 5540-50. Nifty has not managed a close above 5540 in current month despite few attempts. Nifty has seen base building over last two months and as we did mentioned earlier also, close above 5540 and then a decent follow up could open up 150-200 points upside. Again, banks are the key and Bank Nifty is on the verge of a sharp and strong breakout above 11200. Realty counters are showing interesting patterns and stocks like Sobha, HDIL, Orbit, IB Real and Unitech could see substantial upside once they manage to sustain current levels. Dish TV closed above Rs 64 and could target Rs 71-72 over next few sessions. Ambuja Cement managed to close above 133-135 resistance zone after a gap of about 10 weeks and likely to target 146-149. Banks that have bullish patterns are Kotak, Indusind and Yes Bank.
Nifty now has support around 5460-70 and then around 5420 while strong momentum is likely once Nifty sustains above 5550-65.

STOCK TO TRADE 24 03 2011

• Bhushan Steel :- NR7 pattern in Bhushan Steel. Buy above 441, Sell below 433.
• Jet Airways :- Overbought TA Insync in Jet Airways. Sell with stop loss above 450.

Nifty rally continues, still in range

Yesterday, Tuesday, was an NR7 day. Today, the Nifty opened steady, then moved up throughout the day to close at the top of the day’s range. The message is: After an NR7 day, a trending moev can be expected. With today’s gains, the Nifty stands at 5480. This is within the original 5400 – 5600 range. We did see a pivot high at 5535 which means that the Index could now face resistance around 5535. Earlier we had a pattern of lower lows when the Nifty came down to 5348 just two days ago. If the Index closes above 5535 then we have a pattern of higher highs. This has not yet taken place, which means we are simply discussing what could come about if the Nifty rally continues.

Markets are certainly in some kind of a no trade zone. There are day trades on both sides – long and short. But, taking a position is not rewarding inside a trading zone. However, the Nifty did breakdown below 5400 and closed below this number for two days. Therefore, we have to take a bearish bias for the markets. Trading then is to be on the short side, with a stop above 5535. Remember that this is the cash nifty, not futures.

STOCK TO WATCH

BGR ENERGY
Present Price – Rs.470.95, Projected Price – Rs.510-515

BGR Energy (BGR) conducts its business under two main segments, turnkey engineering projects (TEP) and equipment & systems. Besides engineering and technology skill sets, EPC and BoP contracts tend to be project management intensive.
The company enjoys a huge order book of Rs.11000 cr plus. The company’s order backlog is likely to provide revenue visibility for ~4 years, second only to Bharat Heavy Electricals (BHEL) in the capital goods sector. Superior project management skills, which BGR has garnered over the past few years by executing complex EPC and BoP projects (130 contracts in India and abroad), provides comfort on the execution. Over the next 2-3 years there is likely to be strong revenue/earnings visibility for BGR and it is likely to emerge as one of the leading full service BoP contractors.

On the technical front, the stock has gone up today and formed a Long White Candle that too with impressive volume expansion which is a strong sign that bulls are back in this counter. We expect the stock to reach a minimum target of Rs.510. The time frame of the investment would be around 10-12 trading sessions.

DERIVATIVE PICK

• ICICI BANK (CASH – Rs.1040.30) : The stock has shown a lot of resilience on days when the market is in a bearish mode. The stock has formed a long White Candle on strong volume expansion. Buying is advised above Rs.1045 for a target of Rs.1058 and Rs.1072. Higher target of Rs.1086-88 is also possible. Stop Loss of Rs.1024 should be kept.

• PNB (CASH – Rs.1110.35) : The stock after a long consolidation between Rs.1040 and Rs.1113 is now ready for an upward breakout. Buying is advised above Rs.1115 for a target of Rs.1127 and Rs.1139. Higher target of Rs.1144-1148 is also possible. Stop Loss of Rs.999 should be kept.

Market Outlook for 24 03 2011

Markets opened with a slight negative bias in line with the other Asian markets but gained momentum as the day progressed. Early in the session Nifty moved above 5425 and remained above that for the remaining part of the session. It was a combined strength of many heavyweights that propelled Nifty to higher levels. So, we had positive momentum in RIL, Bharti, SBI, ICICI Bank, IDFC and Bhel that sustained throughout the session. Bank Nifty gained around 1.7% and even the Realty counters had a positive day. But the main activity was confined to some mid cap stocks like HOEC, DCHL, Tata Comm and BGR Energy. Some other prominent gainers were IB Real, Pantaloon, MLL, Sesa Goa, Cipla,Hexaware, Indusind Bank, Havells, JP Associates, PFC, Orchid and REC. Few stocks did witness some selling and prominent amongst these were Escorts, TV18, NCC, ZEE, Jet Airways, HPCL and Neyvelli. Volumes were better particularly in the top gaining counters. As suggested yesterday Nifty did move up steadily once it was above the immediate resistance at 5425 and closed almost at the highest point of the day. This suggests that the 5350-75 support has held for now and we are once again in the sideways range between 5375 and 5570. Bank Nifty has once again led the way and it is approaching breakout level of 11200 again. Bank Nifty has seen strong base building/consolidation for past 10 weeks now and a sustained breakout beyond 11200 could mean another 10-12% up move. ICICI bank closed just around 1040 and followup buying could see it move to around 1075-1080. Indusind Bank is looking good and seem to have formed a decent base. Stock could be headed towards 275-280. BGR energy is another counter that is showing positive intent and has once again moved past 465. Stock could target Rs 510 if it manages to stay above 450. Gail, Petronet and DLF are also looking good for decent gains over next 5-7 trading sessions. Nifty would find decent support around 5415-25 now and then around 5375while 5530-5550 should provide resistance as of now.

Stock To Trade 18 03 2011

• Federal Bank :- TA Turtle upside breakout Federal Bank. Buy with stop loss below 370.
• Sobha :- NR7 bar pattern in Sobha Developers. Buy above 264, Sell below 258.

Locked in 100 point range, Nifty waits for direction

The Market is alternating between up and down days. After yesterday’s rally, the Nifty confounded all trend traders by actually faling down, closing today at the 5450 level.

The Nifty is now locked in a trading range between 5450 and 5550 – this is just a 100 point range, quite the narrowest range in many months. Traders should stay away, avoid trading inside this range. A close above 5550 will suggest a breakout on theupside while a close below 5450 will gie the signs of a breakdown. Just wait and watch. What about investors? Well, if the idea is to invest for at least 3 years, then the current levels are as good as, say, levels 10% lower. If the purpose is to obtain trading gains over the next few months, then buying is not suggested. The Nifty is in a bear market (the correction for the up move from 2200 to 6300, qualifies as a bear market). Lower levels

should come in, although we cannot say when.

What if we are wrong? There is no need to panic, since a breakout above 5550 will give us signals of buying, at least as a short term trade.
What about Japan, Crude, trouble in Bahrain, political problems in India, ….. ?
Well, the Indian market has withstood all of these issues. Thus, we should ignore the news and go with our charts. The charts tell us to wait for a range breakout, so, patience!

DERIVATIVE PICK

BHEL ( CASH – Rs.1964) : The stocks has formed a Bullish Engulfing pattern in the daily charts and as the name suggests has strong bullish implications. Buying is advised above Rs.1966 for a target of Rs.1994 and Rs.2010. Higher targets of Rs.2025 and Rs.2042 is also possible. Stop Loss of Rs.1929 should be kept.

Market Outlook for 18 03 2011

Markets opened in the negative territory primarily on account of negative global cues but still managed to show the resilience as the cuts were not deep. Political uncertainity because of the Wikileaks and concerns on rising interest rate environment because of rate hikes of 25 bps both on Repo and Reverse Repo saw some unwinding of positions. Banking majors like SBI, ICICI and Axis Bank saw their share prices drifting lower in a slow manner throughout the day. Other important stocks like Infosys, Maruti, Tata Motors and Dr Reddy also were on the top of losers category. Reliance ADAG group stocks like Reliance Capital and Reliance Infra saw some buying from interested quarters and were marginally up by apprx 2% each. Other stocks like BHEL, Titan and Asian Paints were the gainers primarily because of fund buying.

We are of the clear view that markets here in India have shown strong resilience in spite of several problems both on the domestic front and global arena and hence the bias is clearly on the long side. One should attempt to buy dips and once the Nifty moves past 5550, we could see an easy 100-125 points upmove till 5670 where the 200 DMA lies. Select midcap stocks like VIP Industries, Asian Paints, Tata Elxsi, TTK Prestige, Talwalkars and BF Utilities where fund interest is high could see some decent rise in the coming days because of NAV propping as the financial year end approaches.

Nifty has strong support around 5448 and 5400 levels whereas resistance lies at 5499 and 5525 levels. Trade with a positive bias and buy on dips as long as 5400 level of Nifty is held.

Stock to trade 16 03 2011

• GLAXO :- TA Turtle breakout in GLAXO. Sell with stop loss above 2105.
• Andhra Bank :- NR7 pattern in Andhra Bank. Buy above 133.50, Sell below 131.

Nifty trading at its lower end of trading range

Nifty Watch:- Today Nifty opened at 5393 with a huge gap down of 159 points and touches its low at 5375. After that Nifty find some support from bullish and move up at 5504 with an increase of 129 points and finally closed at 5461 with a gain of 65 points to its day open.
Nifty remained in its large trading range (5400 to 5600). but trading at its lower end at 5400. This suggests that a breakdown below 5400 resumes the bear market.

Trend:- The short term trend is up. Below 5400 the short term trend will down. The Intermediate trend remains down. TA Insync (55-5) is has been in an uptrend. It is moving up at 32.37. Nifty is very near to its overbought level. This suggests that Nifty will move down very soon.

Level:- Looking for support first at 5500 and then at 5400 . Resistance comes at 5600.
Summary:- Nifty in a trading in a large trading range(5400-5600). Market is very choppy. We strongly advise investors to stay away the market.

DERIVATIVE PICK 16 03 2011

• RELIANCE ( CASH – Rs.1037.25) : After a very long time, Reliance Industries has clearly displayed leadership status pulling the market from the morning lows singlehandedly. Buying is advised above Rs.1050 for a target of Rs.1062 and Rs.1074. Higher targets of Rs.1083-1085 is also possible. Stop Loss of Rs.1029 should be kept. The time frame of the trade would be around 7-8 trading sessions.

• BHUSAN STEEL ( CASH – Rs.437.55) : The stock has shown a lot of strength and the counter saw buying form operators and funds in a big way. Buying is advised above Rs.448 for a target of Rs.456 and Rs.465. Higher target of Rs.476-478 is also possible. Stop Loss of Rs.437 should be kept. The time frame of the trade would be around 7-8 trading sessions.

Market Outlook 16 03 2011

Indian market was an island of relative calm amidst crumbling global indices. Taken in isolation one would be tempted to believe that market collapsed as it opened almost 150 points lower and closed almost 1.5% lower. But, if one just looks around the globe it would appear that Indian markets held up nicely even as the other Asian markets lost around 4%. Japanese market was down over 12% as life came to a standstill on growing concerns about nuclear radiation spread. Even the European markets were trading lower and DAX was down almost 5%. RIL led the rebound again as Nifty rallied more than 100 points from the opening levels. Some profit taking and selling in the last 60 minutes pared almost half of the intraday gains as Nifty closed at 5450. RIL witnessed heavy volumes and was up almost 2.5% before finishing the day almost 1.9% higher at 1038. Tyre stocks were also in demand as rubber prices continued to dip. Apollo Tyres, MRF, JL Tyres and Ceat were up significantly on good volumes. Reliance Capital too managed to shrug off early morning blues and closed in the positive. Breadth was negative while volumes picked up as the day progressed. Nifty managed to close around 5450 despite global turbulence and has shown significant resilience over past couple of sessions. But, things may change if the global negative sentiments persist. Technically, Nifty was able to sustain above the intraday support zone of 5350-5370. Even on closing basis the supports were maintained. RIL continues to provide strong support and it’s good to see the stock building on momentum rather than struggle around resistance zones. The volumes are also good and it seems stock could be headed higher. Bhushan Steel is showing strength and is looking good for another 8-10% rise over next few sessions. But, The Auto and metal counters are not looking positive and may be headed lower. Bajaj Auto seems to be an exception and one could buy it on dips. Nifty has immediate support around 5415-20 while critical support lies at 5350-5375.

Stock To trade 14 03 2011

• CUMMINS IND :- TA Turtle upside breakout in Cummins. Buy with stop loss below 665.
• CANARA BANK :- NR7 bar pattern in Canara Bank. Buy above 618, Sell below 600.

Market Outlook 14 03 2011

Market remained in a sideways mode throughout the last week, with bears gaining a slight upper hand towards the end. Nifty failed to sustain above 5550 as global cues turned negative. Crude continued to trade at uncomfortable levels even as the news flow from Euro zone deteriorated. To cap it all there was natural calamity in the form of Earthquake and Tsunami that hit North Japan. Against such backdrop one might be tempted to believe that Indian markets showed some resilience as Nifty managed to stay around 5450. But there were signs of fatigue on various
heavyweights’ chart patterns even as the volumes dipped on lack of participation. Most of the sector indices registered weekly losses and only Oil and Gas and Realty index managing to show some gains. Metals and the Capital Goods were the worst hit, both losing around 3% for the week. Heavyweight stocks that are showing weakness are SBI, Bhel, L&T and the three biggies from Tata stable, TCS, Tata Steel and Tata Motors. Tata Steel close on Friday was the lowest in around 6 months both on daily and weekly basis. It has some support now around 545-550 but clearly it has become a ‘sell on rise’ stock. TCS has some support around 1050-55 but technical the stock has turned weak and could see even lower levels in coming sessions. Banks had led the rebound post budget but now the smaller banks in particular are looking vulnerable. The list includes Andhra Bank, Vijaya Bank, DCB, Allahabad Bank and Uco bank. Some positively inclined chart patterns are that of HDFC, HDFC bank, RIL and Ranbaxy amongst the heavyweights. RIL could see a clear breakout once it settles above Rs 1000 while Ranbaxy could target Rs 485-490 above 465. Amongst others Bhushan Steel has target of around Rs 480-485 once it stabilizes above Rs 440. Areva( above 260), Divis( above 630), Exide( above 141), Tech Mahindra, Aban and OBC( above Rs 360) are some others with positive bias. Nifty has immediate support around 5385-5410 while resistance is likely around 510-5525.

Todays Quate

Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn- Jesse Livermore

Stock To Trade

• CAIRN INDIA :- NR7 in Cairn. Buy above 348, sell below 343.
• ZEE Ent. :- Overbought TA Insync in Zee Ltd. daily chart. Sell with stop loss above 127.

Market Outlook 11 03 2011

The two day winning streak was halted as market saw some selling in select banking stocks because of weak global cues. The West Asia crisis saw further escalation and crude continues to trouble to market and downgrading of Spain also played a small role in the bearishness. The market edged lower in early trade as Asian stocks fell on escalating fighting in Libya. The market recovered after hitting a fresh intraday low in morning trade. An intraday recovery in afternoon trade proved short-lived with the market soon losing ground again in mid-afternoon trade as European stocks fell. The market once again came off lows at the fag end of the trading session. Banking stocks dropped ahead of a monetary policy review from the central bank next week. India's largest private sector bank by net profit ICICI Bank lost 1.87% and India's second largest private sector bank by net profit HDFC Bank fell 0.16%. India's largest bank by net profit and branch network State Bank of India shed 1.63%. Stocks like Reliance Capital, APIL, ABB and BHEL were the few stocks which were on the gainers list. Today was a very difficult trading day as movements were very choppy. Tomorrow however, we expect the market to gain some momentum and hence the probability of it being a trended day is on the higher side. The critical levels for the Nifty futures on the upside would be 5525 and 5460 on the lower side. Trade on the short side if the support is broken and on the long side if the resistance is broken on the upside. Immediate supports for Nifty futures are 5460 and 5420/5395 and the resistance lies at 5525 and 5548 and 5580.

Todays sentence

In many cyclical industries when the upturn comes the big bang comes in relatively poorer quality stocks. – Devina Mehra

Stock To Trade 07 03 2011

• HCL TECH :- NR7 pattern in HCL Tech. Buy above 468, Sell below 461.
• HIND ZINC :- TA Turtle upside breakout in HINDZINC 30 mins. Chart. Buy with stop loss below 1325.
• Petronet :- Oversold TA Insync in Petronet. Buy with stop loss below 113.

Consolidation continues

Nifty Watch:- Today Nifty opened at 5592 with a gap up of 48 points. Nifty quickly made its day high at 5611 with a gain of 19 points to its day open and then it face decline and touches its day low at 5517 with a decrease of 94 points to its day high. At the end Nifty move up and closed at 5548 with a decrease of 44 points to its day open. We are in a process of consolidation. A breakout at 5700 may end this consolidation. So traders should watch patiently.

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. These averages cut each other at 5653. This could be a huge resistance for the nifty. TA Insync(55-5) is above the level of -45 and moving up. This indicator is suggesting that nifty may move up also.

Level:- Looking for support at 5450 . Resistance comes at 5700.

Summary:- In last three days Nifty closed between 5545 to 5555. This suggest that Nifty is in a process of consolidation. A breakout at 5700 or a breakdown at 5450 may end this consolidation. So investor and traders should watch these levels also.

Market Outlook FOR 07 03 2011

The Budget week lived upto its reputation of being a volatile one. Volatility began on the Budget day itself as Nifty rallied initially, only to give up most of its gains. But, the day after saw a one sided up move of around 200 points as Nifty moved past 5500. Overall, it was a good week for bulls as indices rallied over 4%. This came against the backdrop of higher Crude prices and a lukewarm Budget. But, the fact that there were no expectations whatsoever from the Budget and there were short positions going into the Budget helped the markets. Auto, FMCG and Banking indices were the top three gainers for various reasons associated to Budget. There were no sectoral losers but the least gains were seen in IT and Oil and Gas. Nifty crossed 5600 briefly on Friday before selling set in at higher levels. Markets have seen a decent rally post Budget but now we are placed just around the strong resistance zone of 5550 to 5600. As mentioned
earlier, it may not be easier to take out this resistance in one go. But, we do believe that market has made a sustainable bottom around 5230 and for the first time since November 2010, we have a higher bottom and now higher top( 5608 on Friday). The resistance at 5600 is likely to be taken out eventually maybe over next 5-7 trading sessions. Any correction should find initial support around 5440-60 and then a strong one around 5350-5375.
The second level is unlikely to be breached and positional traders could take long positions on declines in Nifty as well as bullish counters with positional stop loss below 5340. Clear breakout is seen above 5625 with potential targets of 5770 and around 5900. Banks and Autos have been the leaders in the current rally. One needs to be selective in Autos and we see positive bias in Bajaj Auto and Hero Honda (above 1560). Banking is looking to be in a better shape and one can use dips to accumulate stocks like HDFC Bank, SBI, Yes Bank, Indusind Bank, Allahabad bank, OBC, Canara Bank and BOI. Another important thing to note is that once Nifty stabilizes above 5625 short covering could lift the weaker sectors like Infra and Realty too. Certain other counters that are looking positive and are Buy on dips candidates are L&T, IDFC, Havells,
Cairns and Sterlite.
Nifty has immediate support around 5445-60 and then around 5375-5400 while resistance should be seen between 5570-5610.

Todays sentence

Individuals who cannot master their emotions are ill-suited to profit from the investment process. - Ben Graham

Stock to Trade on 04 03 2011

• Andhra Bank :- NR7 bar pattern in Andhra bank. Buy above 144, Sell below 141.
• Siemens :- TA Turtle upside breakout in Siemens 30 mins chart. Buy with stop loss below 850.
• Fin. Technology:- Oversold TA Insync in Financial Tech daily chart. Buy with stop loss below 768.

Market in consolidation.

Nifty Watch:- Today Nifty opened at 5495 with a gap down of 60 points to yesterday close. Nifty quickly made a low at 5482 and then move up to its day high at 5597 with an increase of 115 points to its day low. These up and down movements continued for the rest of the day and Nifty finally closed at 5544 with an increase of 49 points to its open and near yesterday’s close.Overall, we are in a process of consolidation. This consolidation may hold for few days more. The trend is up, therefore, within this consolidation; look for dips only to buy.

Trend:- The short term trend is up. The Intermediate trend remains down, with the Nifty trading below its 200 days (5643) and 50 days (5661) moving average. Both the averages are converging in the 5600 to 5700 area. This zone should provide resistance for some time. TA Insync(55-5) is above the level of -45 and moving up. This indicator is suggesting that nifty uptrend is intact. The indicator is now at 7.10, which is about mid way between its low and +45, the overbought zone. This midway position suggests that there is more upside, but within the next week or so, the indicator will begin to reach the overbought zone. A dip will provide an opportunity to enter this uptrend. After some days, the trend will become mature and further buying may not be possible.

Level:- Looking for support at 5450 . Resistance comes at 5700.

Summary:- We are in contraction phase so nifty will take some time for consolidation and then follow up with a trending move. Since we are in an uptrend, we should expect the next move to be up.

Market Outlook FOR 04 03 2011

It was a choppy day for the markets as Nifty see-sawed between 5470 and 5570. Nifty opened on a weak note and traded with negative bias in the morning session. But, sentiments recovered and turned for the better on news that Col. Gaddafi has accepted peace moves. Nifty recovered more than 100 points from the day’s lows. But, expectedly selling came in at above 5550 levels as Nifty closed at 5536. Overall, it was a satisfactory day considering the fact that we had gained around 200 points on Tuesday. DCHL was the biggest gainer amongst the derivatives counters as it gained over 14% on huge volumes. Other significant gainers were Sobha, Triveni, Orbit, Renuka, Karnataka Bank, KFA, Godrej Ind, Indian bank, JP Associates, Tata Power, Bhel, L&T and Apollo Tyres. On the losers’ list were S.Kumar’s, Welcorp, IDFC, Sun Pharma, LITL, Hotel Leela, Adani Power, Aurobindo, Reliance Infra and Jain Irrigation. Nifty managed to sustain
and close above 5500. Markets are showing strength and a close above 5550 would be very positive for the short to medium term trend. It may take some time and Nifty might consolidate between 5400 and 5600 for 3-5 days. But, broadly the trend has turned positive and any declines should be used to accumulate positively biased counters. Sustained trades above 5600 could trigger another wave of short covering and that might benefit the badly mauled counters like IVRCL Infra, DLF, JP Associates, LITL and the likes. As of now the large caps HDFC, HDFC Bank, L&T, SBI, Bhel and Bajaj Auto are looking good and should be accumulated for decent trading gains over next 2-4 weeks. JSW Steel has given a breakout above 940 and is likely to target Rs 1025-1040 in next few sessions. Similarly Bajaj Auto has broken out from an inverted
head & shoulders pattern and is looking bullish. Some others that are looking bullish are Godrej Ind( above 177), Apollo Tyres, IOB( above 140), Havells, LIC Hsg( above 202), Wipro( above 448), Kotak and IRB( above 195). Nifty has immediate support around 5445-60 and then around 5375-5400 while resistance should be seen between 5570-5610.

Todays Sentence

Loss of opportunity is preferable to loss of capital. Trade / invest only when you have a
confident idea

Stock To Trade 03 03 2011

• SBI :- TA Turtle upside breakout in SBI 30 mins. Chart. Buy with stop loss below 2668.
• GPCL :- NR7 pattern in HPCL. Buy above 331, Sell below 322.
• Wipro :- TA Insync 55,5 moving up in Wipro daily chart. Buy with stop loss below 432.

Recalled post budget rally.

Nifty Watch:- Today Nifty strongly opened at 5375 with a gap of 32 points to its yesterday close. This is also its low for the day. Market is in the control of bulls from its start. Nifty made a high at 5551 with an increase of 176 points to it day open and finally closed at 5547 with an increase of 172 points to its day open and day low both.
As we have discussed yesterday about uncertainty in the market due to Nifty made DOJI. This big move is suggested that now there is no uncertainty in the market and bulls take the control of the market in their hands. As market runs in two phases; Expansion and Contraction. This rally is in expansion phase and now we may see a contraction phase. This suggests that the market may consolidate for coming few days.

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. TA Insync(55-5) is above the level of -45 and start moving up. This indicator is suggesting that nifty can made a new high.

Level:- Looking for support at 5450 . Resistance comes at 5700.

Summary:- Today market boom is the impact of the budget. Budget is in the favor of short term trade. Thus Nifty may touch a new short term high level. Nifty never made such a huge rally after budget from last 10 years. So this may go in the favor of bulls.

Market Outlook 03 03 2011

Nothing big bang was there in the Union Budget but it was a big bang day at the bourses as indices gained over 3%. The session began on a marginally positive note but momentum gathered as the day progressed. Auto and financial stocks led the rally as was mentioned in the previous newsletter but the velocity of the up move as witnessed in stocks as well as indices was totally unexpected. The monthly sales figures released by Auto manufacturers further fuelled the momentum. The biggest gains were seen in TVS Motors, Ashok Leyland, M&M, Maruti and Escorts. Bank Nifty zoomed higher by more than 4% on across the board buying in banking stocks. Short covering too aided the up move. Nifty finished the day at 5530 almost at the high point of the day. Nifty has moved up sharply and is now placed just below the strong and crucial resistance zone of 5545 to 5575. This single day up move of around 200 points has raised hopes for a positive bias over short to medium term. This is not to suggest that it would be a straight upmove without any corrections/consolidations. In fact, we could see some consolidation just around the current levels before making another attempt at taking out 5600. The global cues could trigger some kind of correction.

Technically, the levels to watch for on the downside are 5440 and then 5370-5380. We could retrace back to the second level but this level should provide strong support for the upward bias to persist. So, practically as a trader one should use declines towards 5440 and 5375 to take bullish positions in Nifty as well as stocks. Bullish pattern is seen in LIC Hsg and sustained moves above 202 could trigger strong up move. As mentioned in previous newsletter some banking and auto stocks are also looking positive and one can accumulate these stocks on decline.