Wednesday, February 9, 2011
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
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.
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.
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