Monthly Archives: April 2013

#4 Article: Traders are betting on IPL players

Indian Premier League is the most trending topic, as of now, for discussion all over the social networking sites as well as social gatherings. Interesting to note that even stock market traders are talking about them but for them IPL is “Index Premier League”. Almost every day (for investors every month), they try to find which sector index is out performing NIFTY and they try to bet on the best stock from that index. 
Looking at the NIFTY’s track since my last month issue’s article for “V-share” magazine, it has been a dream run for the stock market. I had mentioned that India was struggling with politically instability but within that a turnaround in the form of lowered inflation and better IIP numbers brought some life to bulls. Banking sector analysts expecting a rate in next month’s bank policy as inflation has cooled off. Policy was to be announced on 3rd May but financial sector has already shown their interest or biasness towards the possible rate cut. On 13th april I did posted on my blog that banking sector will lead nifty and we noticed that it outperformed it with a return of 9.9% while NIFTY has returned 6.2% over the same period. This was  surely in anticipation for the rate cut but now markets need some other reason to move on.
Since expiry yesterday we saw some profit booking in banking stocks and nifty dropped down today with sweeping 44 points. Earnings season has started and many frontline scripts have announced their result but IT has been disappointing street. Last decade i.e., 2000-2010 was IT boom for the markets but I feel next decade it going to be banking decade for Indian market upto 2020. Reason?? We have seen that Internet or computers have reached almost each state and to be specific even few villages but Banks?? Yet to be reached villages. Private sector banks have started entering villages and that will be reflected on their balance sheets in coming years. 70% of the GDP constitutes of Agri products and we have seen government announcing subsides to farmers. But now recently they have agreed for special “Kishan Credit Card”, loans etc which all will be credited directly to end user i.e, farmers bank account. So primary need for all farmers is to have bank account and for this we need banks in villages. With this facility farmer would avail many other banking facilities which would benefit them as well as Banks balance sheet. For this simple economic reason I feel next decade is going to be banking dominated. 
Now as per Elliot wave bank nifty has a long term target of 21000 with leading private sector banks such as ICICI bank, Axis bank and HDFC bank, while on small banks we can bet on DENA Bank. Last time I mentioned that nifty was in no trade zone from 5400-5630 and bullish above 5630-5850. We have seen some strong bottoming out around 5600 and I hope traders and investor were long over that level. Herewith the attach graph is Nifty’s month chart and we could notice that it has strongly shown characteristics of perfect Elliot wave. In technical terms we are in 5th Wave of the larger third wave of the super 3rd wave of Grand 3rd wave. I know terms are lil tricky but to say in simple terms we still are in secular bull market. Every dip is a buy for long term
Strategy on NIFTY: Nifty could see some profit booking now upto 5773 and max upto 5610 but take this as a buying opportunity rather than to short for those who missed it. I expect markets to say consolidated above 5770 but 5610-5655 should be respected. So buy on each dip before 3rdmay with short term targets of 6045/6150 on nifty with a medium term target of 6500.

Note: All the data and graph is as of 26th April  2013 closing
Disclaimer: I may have personal position in index and above mentioned stocks. Views and News mentioned above may have Errors and omissions. My views are biased more towards technical analysis. Please read and study the market carefully before investing on my idea. For any suggestion contact me on my email. Some words mentioned in article don’t mean their actual meaning. They are correlated for market. 

#151 Nifty Update: Traders are up on the toes!!..5710-5734 achieved on Nifty

Reliance industries as well as TCS, two major giants, have announced their results in last 2 sessions and both were in line with the expectation. We might see some profit booking to continue on both the stocks as people are disappointed or rather do not expect companies in future. But as i have been mentioning since my last two posts that Banking sector will out perform the index and we saw that for 3rd consecutive trading session. Mid-Cap and Bank Nifty ended in +ve zone while nifty closed marginally on negative side. As i have mentioned yesterday that some cool-off in inflation and a marginal recovery in the IIP has changed the mood around the tables of brokers. On other side banking sector will announce results pretty soon starting with HDFCBANK in 2 days and its expected by many brokers that pvt. banking is expected to post results above expectations. Talking about utilities sector such as power and energy than they might post poor results but that will be good opportunity to buy for long terms as rate hike is expected by almost all state by this quarter so that will bring some cheers to power companies in next quarter result.

Coming to technicals yesterday i did mention nifty to resist near to 5710-5734 and today we saw profit booking exactly from the intraday high of 5732. BINGO!!!! So what next for short term traders ??? Technicially nifty should take support at 5663 (closing basis) while on intraday basis 5610 may act as a strong bounce back point. So if you have exited in the range of 5710-5734, its tym to enter back at CMP to every dip to 5610…Keep a positional stop loss of 5550 with targets of 5850 upto 6150-6170 

#150 Nifty Update: Nifty traders Could be IPL winners

Yes!! Cricket fever is back on my mind infact for most of fans of cricket. Presently fans are “Divided by teams but united by king-NIFTY”. Nifty in terms of cricket is always fun for me to post. My post title is not just for the sake it does has a meaning. Nifty could outperform in next few months and even do better than any IPL team. Economic data this week has been cheerful for our markets. Retail inflation plunged to 10.36% and WPI at around 5.6% which almost at lowest of 3+yrs. This made hopes of rate cut more stronger amongst all class of traders. On last Saturday i did posted that Banknifty index was a good positional buy on Monday and we saw +400points in 2 days. Still banking stocks seems a good long term buy at current rates. Coming back to economic situation, india was the only underperformer or you may say late to recover compared to its developing peers. We just needed a strong reason to bounce back and i guess we have got one. Technical 5450-5630 was strong range of support which i did mention in my last post on nifty. I am sure risky traders would have been long  at 5500+ while safe traders would have got long above 5630 which is bull zone as i mentioned in earlier post. If you havent got long, dont worry, you havent missed the bus. Talking for specific sectors than concentrate on Cement sector (Acc and Ambuja) and banking sector (Icici,Dena,Axisbank) for next rally. But even bharti Airtel is good but at CMP for risky traders.  Now the short term target comes down to 5710-5734 and long term target at 6500. 5400 should act as a strong support and that should be the stop loss for positional trade.

#4 Gold Update: Gold is completly drunk…

Before two days I posted for a party as my 28400 on gold has been achieved…and I guess gold is still havin hangover of tht party and still slipping.  My 2cd tgt 27100 has been achieved and currently trading below 26000. Cyprus has sold gold with a big chunk which is the major reason but technical had already given sell call at 30000. Now italy and Slovenia could do the same coming weaks which could help to achieve my nxt 2 tgts 25000 n 21000..so its still party hanging for my followers.  cheers!!!!

#1 Bank Nifty Update: Bank on Banking Stocks!

My title might seem funny for traders as thy will feel that  “Pagal hai kya, jo banking sector leno ko bol raha hai”. Remember guys that same feelings were for the people who advised IT stocks before 2000. Since 2000-2010 we saw a IT boom and i am sure many retail long term investor wouldnt have made most of it. Now i feel that 2010-2020 would be for banking in particular to India and Asian Countries. WHY?? What i feel and most of you will agree is that today we have Mobile connection and Internet connection in most the rural parts of India but ask yourself a question that do we have a Banks at all those places??. Majority answer is NO. As India is booming, use of more plastic money and cheque payment has increase as our rupee has depreciated and transactions are such large at a time that its difficult rather risky to transfer cash so bank is required in such situation. Take it a land deal to a business deal, everyone requires a bank account. Even rural farming loans are disbursed through cheques by governmnent but problem is that we dont have presence of bank branches. So farmers are not availing farming subsides unless they have a bank account. Since last 5 years bank accounting opening is on high growth which could ultimately result in good balance sheet of the banks. This was fundamental view and now talking about technicials. Technically Banknifty as you all can notice on the chart, should take support around 10440 in worse case scenario. On upper side we could see 13300/14770/21000 in coming years. My focus would be on private sector banks as they are growing their presence rapidly than pubilc sector. My top picks are HDFCBANK, ICICIBANK and Yes Bank. For small cap concentrate on DENABANK. So my strategy would be going long on banknifty with every dip up to 10440 with sl of 9900 for long term investors.

#3 Gold Update: Gold traders ..Thumps up to my followers! !

As I have been intimating short on gold since jan ,my 1st tgt 28400 has been achieved today. People around the world are shifting from hard assets to paper assets as their stock markets have been at life time high and economy picture in US has improved.  In India we stilm have governance problem so both the bullion n paper markets is  seeing a set back. But technical suggest a support for nifty at 5400 after infy gave a set back to traders. I did mention in my post that 5400 was strong support for nifty while gold was going to slide down..now technically nxt tgt ia 27100 and than 25000/21000

#2 Gold Update: Players go for Gold, Not Traders!!!

Again i have connected my title with a Bollywood name and tagline but this time the name of film even mean it. Only Real users or players but gold at this time or else its time to short Gold. On 30th January i initiated a Short call. It was confirmed that gold is not a gud for investment currently. Now today i have spotted some real danger on the chart. As you call can see in the chart that a trend was tested 5 times in last 7 years but today it has broken that and trading below that. It is a montly chart so we need to wait till end of april but i suggest you all to go short with extended tgts to previous 28400 to 27100/25000 and worst case 21000.. Yes 25000 and 21000 are mch possible. So be cautious.