Monthly Archives: November 2013

#10 Article: Drifting Nifty

Nifty has been driving investors and analyst crazy in last months and in November it was drifting around the crucial turning points on the index.  We had advised to go long at 5833 on 29th September or to say October issue. We recommended Hold with tgts of 6212/6370/6500 but we could only achieve 6212 and then we retraced from 6342 to hit a trailing SL at 6200 as we recommended in last issue. Safe traders got a 367points on our nifty call. On our blog we had seen some negative signs and initiated a short call for risk takers but the SL triggered the next day. Nifty is driving really crazy!!! What is making it so??
                Fundamental earning season has been better than expected on the Indian grounds but markets have not yet reacted in line with results. Sept IIP was below expectations at 2% and IIP august has been revised to 0.43% from 0.6%. But it was better on YoY or to say MoM basis. But the rising fear was of October CPI which has rose to two digits to 10.09%. Food inflation was the main reason for increased CPI.  So currently are economy is in confused state where one side we are noticing improvement in Industrial side while Inflation is at the peak. GDP which was announced yesterday after markets was at 4.8% better than last 4.4% but less than expected. RBI is also confused about economy and not sure about hiking rate.  Now markets are waiting for two things. Firstly, new banking license announcement. A new story has built up and was confirmed that TATA group has backed off from the fray to Banking sector. My eyes now are on Reliance Capital who is emerging as strong contender for the license. I would recommend going long on the stock from the view point of 2-3 years.  Secondly, people waiting are for the political results which are still difficult to predict. So gloomy picture of economy is now more biased towards bull after GDP data last evening and a strong breakout yesterday on Index. Looking at global markets they are at life time high. QE tapering is eyed by many analyst and I am also supporting the same view. As the report says Treasury yields are increasing in US and the thumb rule says stock index is inversely related to bond yields. Job data are improving in states. So now what we could expect is that FED would announce taper soon which would taken as profit booking on equity around the world. Even the financial end in stated next month could have profit taking effect.
                                Coming to Charts on Nifty, we could notice a Double bottom formation which has a neckline at 6212 on daily charts. On breakout of the pattern we could get target of around 6480. Indicators on daily charts are expecting a up move.  Nifty is well above 50/100/200 EMA. Index has been taking strong support at 100 EMA which is currently at 5960. On Friday it crossed above a resistance line making a complete U-Turn with a drift. Weekly indicators are negative but Elliot wave suggest a move of around 300 points from here while monthly chart suggest that a top is nearby with max up side around 6500. Taking all three time frames we are getting a strong smell of 6400-6500. Currently nifty is no trade zone of 6000-6200 for safe traders.

Our strategy: Risk takers go long on Nifty while safe traders go long above 6212 only, with tgt of 6450. SL comes at 6000 and trailing SL at 6100 once it crossed 6212. On downside SHORT ONLY BELOW 5950.
For short term traders view follow us on our blog  ,on twitter @chartechnician and FB page
Note: All the data and graph is as of 29 November 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.

#192 Nifty update: Smell of Rotten Stocks

After a long break when i look at the charts, i am smelling some rotten stocks which are over ripped and could throw away investors profit if not got away from it at right time. On my last post was long with small stop loss at 6030 which is been triggered. Now charts seems losing bulls momentum and bear might take control over it next month. I would recommend to exit 30% of the longs which i had intimated long back for portfolio at around 5400-5600 levels. Fundamentals aren’t much at a peak stage which could drive stocks more crazy on upside in short term. Looking at US bond markets. Yield on treasury is increasing and we could see a tapering soon which could have a negative impact on our markets as money would be drove out of our stocks to some extent. Secondly, December is always taken as profit booking month for FII as they have their financial year ending. So making some bet on FII inflow i am negative for near term. On other side we had seen mixed bag numbers for our companies and i am sure investor would surely wait for next round of earnings before betting for long term on our companies. Technically, a monthly chart i am seeing a strong retracement which could stretch down upto 5400 but dont expect a straight line fall unless some news from political front. Indicators are weakning all time frames

Our Strategy: We recommend to Short NIFTY (CMP:6057) with tgts of 5900/5720 SL:6140 (Closing basis).For safe traders or portfolio hedgers buy 5900 (dec) PUT nr to 39.10
We recommend to keep SL after expiry as tomorrow we could see a volatile session. all are cash levels

#1 My View: How long can XUV drive mahindra?

Mr. Anand Mahindra is the only Public figure from Auto Sector or may be from any manufacturing, which is highly followed on Twitter. M&M is not so common in portfolio as its Tata may be because of its conservative approach to its production or driving company. 26% stake is owned by family and may be he is the last hierarchy to manage group. Interesting to know M&M has 41% share of SUV in india while SUV is 55% source of companies cash Flow. On the tractor side, it has 1/3rd cash flow from that segment. Considering the balance sheet, its net consolidated debt of the group is almost nil. But why i wont prefer this for a long term portfolio against its peers. Why? Firstly, it does not invest much over research department against its peers and Secondly, its betting on SUV only and has very narrow product range. Now today the craze is of SUV so company is getting a edge over it but what if the craze is over? M&M doesnt have much holding in sedan or small segment. Do to over crowd in Cities people are shifting their ideas from SUV to small cars. Company said they are exploring rural markets but i doubt they could get much market out from rural. Thirdly, after Mr. Mahindra resigns the company we have to watch out for the guy in charge whether he is capable of doing it as good as Mr. Mahindra. So in all company is conservative one, but probably looking at american buy-out for technology improvement. Before entering with a long term view we need to wait and watch.

This is my personal view and there may be some biasness. Please study carefully before investing on my idea

#191 Nifty Update: Nifty-Leela is a BlockBuster

Weekend leela fever continues, whether its Ram-leela or Nifty leela, both had are Blockbuster for the people. On last thursday as i mentioned we had a morning star pattern formation and we had left with confirmation and today we got that with a booster. Global markets had performed good over the weekend plus RBI said that no hike rate in near term which has given a gap up opening on Nifty. New banking licenses are gonna be formulated by this Jan as said by finance ministry. for the same reason banking had seen some positive sentiment booster today on Index. Nifty has comfortably closed above all the short term moving averages. Today some of the scripts have seen huge volumes above the daily average. We are still expecting some upside on technical basis and Reliance(CMP:875) could be the outperforming stock as it has not seen an rally over the period, so keep a watch on it. Tatasteel is still a good buy for long term but wait for a correction near to 395-410. Technically this rally on Nifty has resistance near to 6400-6500 range. So bull is expected to continue with Nifty leela and computing with Ram leela performance on WoW basis πŸ˜‰

Our Strategy:Hold longs as we intimated above 6160 with sl of 6030 and tgts 6280/6360/6500

#190 Nifty Update: Nifty Salutes Sachin

Just one word which was lingering around the lips of everyone, atleast in India was ‘Sachin. Sachin, Sachin!!! Today was the day where everyone saluted Little Master Sachin Tendulkar for his last appearance in International cricket so did Nifty saluted him with a grand opening after 7 consecutive negative sessions. Nifty played a unbeaten 100* in first hour if its play but than ultimately lost some ground as i guess traders where buzzy watching sachin at Wankhde  rather Nifty at CNBC πŸ˜‰ hahahaha!! Anyways, today a important WPI was announced but it was as expected by polls at 7% which didnt made sentiments negative. The backbone of todays rally on Nifty was Banknifty which cheered speech of RBi governor last eve promising some steps to cool off rupee without increasing rate in near term. On other side result of TataSteel were announced yesterday after hours which were turning numbers for the companies. Coming to technical, in our last post we mentioned 6080 level to be support level and it was breached so swiftly on monday. We mentioned to WAIT and WATCH for confirmation and today we have got some signs that could give a clear picture of near future. As you all can see the squared zone it is a ‘morning Star ‘ pattern of Candlestick but though not a perfect one. It does have some significance. Now on monday if we some good opening session than we could see a short recovering rally. But we have a strong resistance levels at 6098/6160. Nifty is taking strong support at 50 EMA around 6000 level. 
Our strategy: Square off all Shorts at 6098 and go Long ONLY above 6160.More downside on cards only if it closes below 6018 on Monday

#189 Nifty Update: Haathi vs Chiti

We all have forwarded funny sms Jokes of Haathi vs Chiti  but now traders are experiencing such fight on Nifty Chart. As all technical analyst could make out from my markings on chart that two “head and Shoulders” pattern are visible i.e., One being a confirmed breakout (Haathi) and Second being in formation (Chiti). That the size differs so its easy for some people to say that a small one is not much of importance but as hindi dialogue says “Chiti chahe toh Haathi se bhi Tandav karva sakti hai” and same is true here. Techinally size does matter on the charts but we cant ignore the possibility of smaller formation. Fundamentally we dont have much to cheer domestically but US economy is showing signs of improvement from employement data and ECB also reduce interest rates to 0.25%. Results have all outperformed street estimates. If we talk above correction than Bank Nifty has already given correction. As You all could notice that even nifty has closed at support line of Channel. So everything including a Chiti H&S suggest a pull back early next week but who wins the war depends on breakout. Green patch defines High Volatile range on the charts.

Our strategy:Wait for some confirmation on either side. 6080-6253 is the range. So Wait and Watch as of Now.

#188 Nifty Update: today Nifty acted as a melted Ice cream

Do u remember that day of your childhood when you used to get your favorite icecream??? Than when it used to melt we would lick it to capture every drop of the icecream. Nifty was something like that today to bulls. After a steady opening it gave a tremendous mouth watering rally to 6289 but than it dropped off drastically and bulls felt like that they had just got icecream (nifty) in their mouth but than it dripped from the lips (edge) to the floor. And all bulls would have been crying on nse platform just like a small child. As we could notice in the charts, nifty had cracked out of a small channel and it was surely signal was like a  “Choco Nutty” of havmor to bulls but than we saw some profit booking on banking stocks and midcaps. Today Pharma and IT had held up nifty to some extent. Technically, markets are some more of weakening signs on daily chart. Weekly chart and Monthly chart are still at a pause showing consolidation phase in near term. A small channel is back in action to guide nifty to some downside. Indicators are showing weakness in the daily chart. Nifty has strong resistance at 6207/6232 for tomorrow and support at 6146 for intraday. 6180-6196 is a chewing gum range where market could revolve around. On the breakout on either side we could see market taking support at 6146 or resisting near to 6232

Our strategy: Our closing trailing SL at 6200 has been triggered. Now we recommend to go long above 6207 tomorrow and safe traders above 6232. We dont recommend shorts as secular trend is up for now. 6167 is strong closing support level.

#187 Nifty Update: Bulls are still on a Vacation

Since last two sessions we have seen some profit booking on Diwali Rocket rally on Nifty. BOLT is missing bulls on the screen to tick up the index. We are seeing some sector specific movements and not one sided move which is a typical characteristics of consolidation phase. yesterday it was Pharma and IT for correction while today we saw banking sector sliding and Pharma picking up. As we have been stating Monthly chart is strong bull mode while weekly chart is on the mid way of road indicating that market could even go downside. But daily chart is showing some weakness since last two session. Not much of the fundamental reasons to interfere currently on the charts but market is in purely in Technical Tunes. There are two lines cementing road of nifty current as i have marked with the arrows on the graph. Black line is acting as a support for the 4th time today since 5250. Today we did mention on our fb page and twitter that 6210 would be a strong support and today low was at the same mark. Tomorrows day is important for our long call as closing trailing is near by.

Our Strategy:We still HOLD on our long call with tgts of 6375/6500 with closing trailing SL at 6200.