Hindalco has been in upward move even though it was downgraded by many brokerage houses. Hindalco gave almost 40 % return from its low in december. Now its turn for some brakes. Today in the opening, price gave confirmation to the formation of “evening star” on the chart. It is the sign of bearish reversal. Even the indicators such as RSI and Stochastic are in overbought zone. Even the stock has closed below all the short term moving averages and its near the 200 DEMA. If it gives a closing below 200 DEMA than expect a more downside upto 133. I had recommend selling the stock future during markets hours near to 156. Keep a stop loss at 162 with near tgt of 147/142.
On my last Post i mentioned “Dirty picture” for NIFTY but it was not much a dirt for the investors. My last post was on 17th Dec and than we saw NIFTY bottoming around 2% from there and bounced backed. Now as you can notice NIFTY has been trading range bound and in a secondary upside channel wave. I was waiting for channel confirmation to have new post and i got on Friday the 13th. Can u notice that last three candles have been a “DOJI”, expressing a tough fight between bears and bulls better than India vs Australia tour. We could notice than both upper and lower arm of the channel has been tested twice which is a great confirmation. The last upside has left two gaps unfilled at the bottom which is a second sign that markets may see some correction back to 4650. RSI and MACD indicators are still supporting a upside while stochastic is suggesting some correction before more upside. Stochastic has been in overbought zone. Earning season has start with INFY posting gud numbers but guidance was depressing for investors. On the other hand from tomorrow Foreign investors will be allowed directly to invest in our markets which will boost money flow in our market. But on friday after markets hour we received that moody has downgraded credit rating of many EU countries by a notch which signifies that yet Europe crisis is unresolved. On 24th Jan we have bank policy review which is expected ti bring CRR cut by most of the bank. dimag mein khichdi baan gayi??? Same is with all investors. All are confused what will be the next. So i feel market yet be range bound and move in this channel unless the channel breaks out either way. Channel range is 4600-4900. For next week be on short side with sl of 4900.
What you see in the chart is “The Dirty Picture” of our NIFTY chart…..your expressions might “Oh What the F***, 3980????!!!!! Yes guys……My last post on NIFTY suggested that we are seeing upside movement and blah blah…but you know us guys, we typical indians- even we expect Munaf patel to hit a six on last ball and save Indian and so i thought RBI can save us and our market. Last friday showed volatility of almost 200 points which is a sign of indecisiveness of our market sentiments. CNBC poll was expecting a unchanged policy from RBI so was the case but actual traders expected a 25 basis cut in CRR. RBI did intervene in Forex front to stop rupee depreciation but yet not any such move to save NIFTY depreciation. December is the month of christmas and New year eve which is one of the festive where people in US celebrate too possible extent and so they want liquidity. We may see more Capital outflow from our markets this month rather than inflow which is a but obvious. Inflation is easing but not to the extent which allows RBI to reverse is cycle. Manufacturing index is following too so nothing much to cheer for traders this tym around. I have even noticed a large open interest in 3900 PUT OPTION of February so overall sentiments have become negative. Technically speaking, the “inverted Head and Shoulder” which i showed in last post didnt get a completion but rather took a U-TURN. We could see on daily chart above (as well as weekly chart) that a Upside Head and Shoulder is completed on last friday and close has been below the neckline. So we could say that we are seeing some more downside with target of 3980 if the close is below 4750 for more 2 weeks. But but……nothing is impossible -Mission Impossible 5 Staring Pranab mukherjee as TOM CRUISE….yes…next two weeks are just last 2 secs of MI-4 before which tom cruise completes its mission..can our TOM CRUISE do something like that???…Techincally Indicators are positive while chart is negative so its the crucial moment in coming days….yeah but surely sell if the close is below 4578 for 2 days!!!!!!
Market yet hovering around 4700 at 12:45 pm IST… What next??? Cant say anything until todays end but i found something interesting on tatasteel’s daily chart and thats probable “Double Bottom”. As you can see last bottom was at 367 while today bottom has slightly near to it 367.40 until now but i though risky buyers may take risk by going long on the stock for next week. Volume has not yet been so high on second bottom as on first bottom. But still anything can happen in last 2 hours so risk takers and go get tata steel with tgt of 421 as per my view… But keep strict SL of 365.
NIFTY is back in mood so is Me in updating my blog. NIFTY has seen a downfall towards 4650 after i last updated my blog. Same time last year we had seen a yearly high in 2010 can this time it be a yearly low in 2011???? I strongly believe yes it could be. But i may be even wrong thats y i keep a stop loss to my trades. I had been constantly saying BUY -BUY on my twitter account (@NIFTYbykush) when the NIFTY made low 2 consecutive days at 4630 odd levels on 23 and 24 of last month. Short term investors would have got handsome returns. Oh common dont feel that you have missed the bus. U can still jump in on every dip as i feel now that 4900 will be the bottom support. We may see range bound movement until 9th Dec when brussels meeting is held on. But seeing the global sentiments and political steps in last one month, i strongly believe that some positive vibes are waiting further. All the global indices charts are currently in favor of bulls in short term which could be a signal of bottoming out. Banking sector and Metal sector will be the leading our markets rally. Why banking?? 1) Short covering 2) it is expected that CRR will be reduced which will improve liquidity in market to tap inflation and metal sector because it was the most beaten after banking sector in last downside. So you may take positions in selective stocks in such sectors for example HDFCBK, AXIS BANK and ICICI Bank while in metal sector TATA STEEL , STER and HINDALCO. Technically speaking on NIFTY daily some characteristics of “INVERTED and Head And Shoulder” has been witnessed which on breakout will give a tremendous rally. Volume are increasing on rallies while decreasing while the fall which is also a characteristic of inverted H&S. So i am bullish on markets but obvious keep a strict stop loss. you never know what could happen in the world markets.
Important Levels:- R-5124,5172,5252,5326,5400,5525