Monthly Archives: June 2011

#10 Stock Update: Long Term Buy: BHEL

Industry: – Engineering and Capital Goods
Stock is around 52 week low. BHEL has witnessed a Dragon fly Doji on Daily chart before some days. As we could see in the chart, stock has been moving in the tune of Fibonacci Retrenchment for last one year. It has taken support 4 times around 1894 in last one year which is 100% retrenchment from the top. Technical Speaking stock has been trading in oversold territory and now it is time for long term investors to get into the stock.

Investment tips:

CMP:-1937
Strategy: – Buy on Dips
Targets: – 2200/2500/2700
Time Horizon: – 1 year
Stop loss: – 1820
14 Day RSI: – Strong at 44 giving a buy signal
MACD: – (-21) after crossover at (-32) giving a strong BUY

#9 Stock Update: Weekly picks

TATA Steel has witness an important “double bottom formation” at 554 levels. On Friday it witnessed a gap up opening .It has given close above 5 and 10 day Moving averages. We could see that TATASteel has been taking support and resistance at Fibonacci levels throughout the last year. Double bottom and its breakout is also the Fibonacci levels. After the breakout at 594 levels target comes out to be 629 which is also a Fibonacci resistance. So my weekly pick this week is TATASTEEL.
Levels:
CMP: 573
T-594/630
SL-556
14 day RSI- 48 and turning up strong
Stochastic: Crossover at 20.

#29 Nifty Update

NIFTY opened in red as it was expected due to the global concerns. Today NIFTY made a low at 5356 which was the most crucial for rounding formation as I mentioned in last few reports. NIFTY is trading in too range bound and intraday traders are not able to get much gain from either side. MARUTI finally got rescue from the strike and production to start soon. Nothing was much in news today which could drag NIFTY up. RELIANC and Infosys were the most banged today from NIFTY 50 stocks while banks like SBIN were fairly good and many intraday traders got handsome returns by buying at low and selling at todays high. Now next two crucial supports are at 5335 (double bottom support) and 5300 (Fibonacci retrenchment support of 61.8% from the 52 week high of last one year). Now its risky to go short at this level because rounding formation is complete and NIFTY might bounce back from crucial supports in intraday. Only go short below 5300. Now the focus will be only on one formation “double bottom “ at 5335.
NIFTY levels for 20th June:-
R-5400  S-5335  
R-5442  S-5300  
R-5482  S-5232  
R-5525  S-5196   

#28 Nifty Update

NIFTY opened down with a gap as all the foreign markets were down by almost 1%. Jobless data in US and Greece president resigning were 2 major news which made foreign markets cry. Highly awaited RBI policy came as per the marketers expectations i.e., hike of 25 bps. This hike was already discounted in the market. After the policy NIFTY was confused as a student answering the Math multiple choice question which way to choose. Reliance on one hand was dragging NIFTY down while SBIN and BANK Index were making the move strong. Ultimately NIFTY broke down our support of 5400 and closed below that. Now our head and shoulder support is breached and confirmation of the same can be only attained if NIFTY tomorrow closes below 5442. But if NIFTY opens negative then we may see levels of 5360 which is a rounding completion or 5320 which may create a possible double bottom. So strategy for NIFTY is wait and watch for the two crucial supports of 5360 and 5320.
NIFTY levels for 17th June:-
R-5449     S-5380               
R-5476     S-5367
R-5505     S-5337
R-5547     S-5300

#27 Nifty Update

NIFTY today was unexpected. Dow and foreign markets closed yesterday by almost a 1% or more and it was expected that our markets will react positively to it but it couldn’t. In the morning market opened almost flat and was as boring as Radio Jockey’s commentary because you feel irritated whenever you listen them while your favorite song is been played.  Almost all the frontline stocks were negative. Today, on the later hours of the market, it broke our Rectangular consolidation pattern to close at 5447 which is our crucial support (5442) for Head and shoulder.  RSI , Stochastic and MACD all are pointing towards the bear phase for the market. All the moving averages were broken down to close below them. Tomorrow RBI policy is a major concern for the markets momentum. I feel market has already discounted 25bps hike so if the same is announced the market may react positively to it otherwise we might see our next crucial support at 5360 which is projection on the breakout of rectangular pattern. On the stock side today, SBIN and other banks were discounted in favor of policy today. TATA MOTORS was like Yusuf Pathan who played extremely good but not good enough to bring NIFTY positive as he could not win series for India against SA last year with his blistering 120 in finals. So strategy for NIFTY would be wait and watch for the crucial levels 5360 or completion of Head and Shoulder at 5609 (neckline) as the graph above.
NIFTY levels for 16th June:-
R-5482  S-5400
R-5520  S-5386
R-5575  S-5360
R-5609  S-5300

#26 Nifty Update

NIFTY opened on positive node as global markets were all almost positive. But surprisingly Reliance Industries was the loser like our Indian Cricket team in yesterday’s ODI. NIFTY made low at 5484 near to my support of 5482. Yet NIFTY has to breakout on the rectangular formation between 5482-5609 on closing basis. But on other side I am more biased towards the formation of right inverted shoulder by NIFTY’s current movement. As I am mentioning since few reports, inverted head and shoulder is about to break-out at 5609 levels. RSI and MACD has almost started pointing towards the bull phase. For the frontline stocks TCS and SBIN seems to be good buy while be cautious on Reliance, Hindalco and Maruti.  So, I still hold my strategy of buying NIFTY on dips with strong SL of 5442.
NIFTY levels for 15th June:-
R-5525                  S-5482
R-5558                  S-5442
R-5603                  S-5400
R-5650                  S-5483

#25 Nifty Update

NIFTY opened in negative but recovered at the end by almost 60 points from the low. NIFTY made a low at 5437 (almost at 5442 which I mentioned in my last 7 reports). Now NIFTY daily chart has three major formations in the process which could be confirmed in tomorrow’s trading session. Firstly, a rectangular formation breakout at 5482 level or 5603 level on closing basis. If the breakout is on downside then second formation is inverted head and shoulder which has a support at 5442. And if we see the breakout of 5442 then a third formation which is a rounded top could be formed with the support at 5356-5383 levels as marked by bold line in the graph. Therefore if NIFTY breakouts on downside then 3 formations has chance to be formed up while on upper side we may see new rally over 5603 level. So now strategy will be to wait and watch where NIFTY takes support and then buy at the levels.
NIFTY levels for 14th June:-
R-5503                  S-5442
R-5540                  S-5400
R-5560                  S-5373
R-5603                  S-5356

#24 Nifty Update

NIFTY opened flat as the SGX NIFTY was flat in the morning. NIFTY today was playing boring like a 50 over match in West Indies. It closed around 5521 just a minor change regarding the last close. Major news today was of MTNL and HCL-Infy who had made a cartel to increase bid price in CWG broadcasting rights by almost 400 crores where as on Political front Baba Ramdev has declared to create an armed force of 11000 people if the government didn’t agree to his demand. On the stock side everything was almost flat while Hero Honda was down again and made low at 200 DEMA at 1736 while LT and Reliance were few from the gainers today. Still market is yet to decide its of path movement. I feel market is playing range bound between 5482 to 5609 which forms a “RECTANGULAR FORMATION”. Breakout at the either level will decide the further run of the market. But my instinct says it will be BULL Market so Buy NIFTY with short term SL-5482 and Long term SL-5442.
NIFTY levels for 10th June:-
R-5550  S-5482
R-5575  S-5442
R-5609  S-5405
R-5650  S-5375

#23 Nifty Update

NIFTY was down today by almost 30 points at 5526. When it opened all the technical indicators were so tempting to make a investor buy NIFTY but it just touched yesterday’s closed and returned back to where it opened. MACD is still strong on NIFTY to buy with a SL-5442. NIFTY is yet to validate inverted head and shoulder with the neckline at 5609. Auto industry will see fall in sales due to hike in fuel prices but TATA Motors seems attractive from the technical side. IT Sector is gaining some momentum as we could see INFOSYS and TCS consolidating at its current level. On the other side global cues are negative which is affecting our market index rather than domestic news.  Still the call on NIFTY is to buy and for the stocks its sector specific and more precisely stock specific.
NIFTY levels for 9th June:-
R-5550  S-5503
R-5570  S-5492
R-5609  S-5442
R-5640  S-5401

#22 Nifty Update

NIFTY opened flat and as expected it took resistance at 5571 (I mentioned in my last report). It was a slow and steady win for NIFTY and Rohit Sharma’s innings yesterday which gave steady win to India over West Indies. Now NIFTY has caught some bullishness to face resistance at 5609 which is a crucial level. 100 DEMA and 200 DEMA are converging around the same 5609 level which is also a ought to be Neckline for inverted “head and shoulder pattern”. Breakout of that level will be crucial to reach the level of 5730-5750 in near term.  RSI and stochastic are approaching overbought level but MACD line is about to cross 0 line towards upside to give strong BUY for NIFTY for long term .INOSYS was one of the large cap which out performed together with RELIANCE. Both stocks are at attractive price for long term together with SBIN which didn’t have much of movement today.
NIFTY levels for 8th June:-
R-5571                  S-5537
R-5609                  S-5502
R-5662                  S-5472
R-5700                  S-5442