Hey Guys just found a interesting pattern on Weekly chart of NIFTY. On 7th August I did plot a Long term Elliot wave. Now I have witnessed a smaller degree of Elliot wave property in Wave 2 as you can see in the pic. This means that NIFTY may take supports around 4800 then start shopping for long term as this will be the end of wave 2 with also is a end of extension of wave 2. Keep above mentioned levels in mind.. It might help you all for trading
Celebrations are still on for Janmasthami in Gujarat as well as on stock market though we had a painful 4-0 whitewash in England. Just a suggestion to BCCI that Indian cricket team should be sent to Ramlila Maidan and made to do fast with ANNA hazare… x-(. Anyways coming back to NIFTY , it opened up at 4927 but initially fooled people by slipping down to 4860. NIFTY closed at 4948 up 50 points. But technically speaking market was not fooling as it came down to fill up the gap on 15mins chart and then bounced back non-stop to 4960 filling up the gap completely at 4935. US and Europe markets had seen some recovery. Libya civil problem has been solved and oil production will resume in 2-3 months which is a great relief for many countries over the world who were dependent on that place. Short term investors with a holding period of 1-3 months enter Sugar stocks.. September-November is sugarcane harvesting season and better monsoon is expected this year which will have better yield of sugarcanes which is a major raw material for the production of sugar. Brazil which is the largest producer of Sugar has said that due to unavoidable weather production of sugar will be down by 6% YoY. This means globally price of sugar will rise but domestic we have enough excess supply so india will have low prices in local but companies get more margins on export as limits have also been increased. So enter stocks are Renuka, Balramchin and bajaj hind till next quarter. Avoid Paint stocks such as Asian Paints as they have a slack season during monsoon because construction is on hold. You might see spark in demand of paints may be in third quarter. IT stocks has seen a quiet a bit rally today but still i feel its trapping long term investors. Unless and until US economy doesnt stable IT will nt have a honeymoon period. Technically speaking market has confirmed the Doji created before 2 trading sessions. RSI and Stochastics are have just moved out of oversold zone and is confirming short term recovery. MACD is about to give confirmation if the market stays positive for next 2 trading sessions. Being expiry we might see some recovery in market upto 5100 levels. But i still recommend to hold NIFTY future with SL of 4750.
NIFTY levels for 24th August:-
Happy Janmashtami!!!!! Finally NIFTY has given a sign of reversal on the birthday of Lord Krishna. NIFTY opened flat at 4853 on mixed global cues and then with had some range bound market in the morning but then with weak europe opening we saw low at around 4815 levels. But foreign markets recovered after the early trade and NIFTY got a little spark which it was waiting for last few trading session to recover almost 100 points from the low to close at 4898 up by 53 points… Most of you might be gambling in teen patti but i bet if u had gamble on stocks today you would have earned more 😉 :P. Experts says that recession is almost confirmed in US and Europe but you may not see sudden downfall rather new lows each day. The root cause of current market situation is GREECE. People close to European Union says that greece was fudged in the Union. At the time of Joining fiscal deficit of greece was more than 3% of GDP which is a violation of a rule to be EU member but still Greece was considered as people thought that Greece would excel. Debt to GDP ratio stands at 140% at present and its expected to reach 160% by 2012 in greece which is considered to be too high. Only reason for greece to save themselves is to grow at 7% by 2012 which is next to impossible with current growth at just 3.5%. Why the hell was greece taken into the Union??? Talking about the US economy they have seen a projected high growths than they can actually get and have printed dollars as and when they want which has resulted in deflation. Talking about india, current valuation of stocks are attractive and one should start shopping. Most attractive valuation as per me are of Steel stocks… Now you would ask y??? An article mentioned that from 2005-2010 China increased its steel producing capacity from 330 MT to 640 MT while India just moved from 45MT to 66MT and our imports have also increased from 7MT to 11 MT. From above sentence we can Interpret that Steel demand is more then supply in India so steel company will have advantage over production and you must buy stocks like TATA STEEL, JSWSTEEL and Hindalco at CMP. Second best sector is Power sector. NTPC and Power grid have agreed and have entered in JV with Sri Lankan Companies respectively to supply 2500 MW with 1800MW by NTPC. So we can expect them to flourish in next 5 years. But i really doubt that in India we have power shortage bt why this State Owned companies are supplying power outside?? Really after reading this situation i Support ANNA Hazare. Techincally speaking NIFTY has confirmed the 2cd Consecutive close above 4832. RSI and Stochastic have given Bullish crossover but yet in oversold zone but we have seen a bullish piercing pattern on daily chart and tweezer bottom start to this week which is a reversal sign. Hope you all have squared of your shorts on NIFTY and have bought NIFTY with tgt of 5300. Multi Bagger buy with Minimum risk is to buy 5300CE Sept Expiry at CMP of Rs.25
NIFTY levels for 23rd August:-
NIFTY is also fasting and supporting ANNA HAZARE movement with downside by almost 100 points at 4845. Dabbawala’s from mumbai for the first time ever since 120 years had closed down there service in the support of ANNA Hazare. Strong bearish sentiments are prevailing all over the world. Yesterday US jobless data were announced which were far below then expectations which led US with downside opening at 5% and Europe to close down by 4%. Today NIFTY also opened gap down on global recession weakness fear. Food inflation was at 9% and fuel inflation at 13% which was announced yesterday and FM says it is not the level the expected. He is expecting food inflation to ease after better monsoon. CNBC flashed that it expect RBI to incerease 25 bps next month to curb inflation but i feel RBI will stop rate hike as they had raised double then expected last time and inflation has ease a lil bit this month. SAIL in consortium with TATASTEEL, NMDC, JSWSteel and Jindal steel are applying for the bid of Iron ore in Afghanistan with iron ore content of 1.8 million tonne. China is the major competitor in this bid and Indian government wants to win over them to avoid competition in future. Official says this will be a good move to fill up the iron ore deficit of indian Demand. Coal India is also a fundamentally good company to invest as out of 418 MT demand of coal per year in India. 320 MT is provided by Coal India alone. So as i mentioned yesterday NTPC along with Coal India and SAIL are the PSU stocks to look at current levels for portfolio picks. Technically speaking today achieved my target of 4800. Market had took a great support at 4832 which was 200 Weekly average..It had slipped below that level but close above in the end. I just compared the downfall of 2008 and 2011. I marked that there were no gap down openings in 2008 while now we have 2 gaps at 4898 and 5230 which are unfilled. As we have noticed that gaps are strong significant indicators i feel we might see some short term recovery if the market stays above 4800 next week. If NIFTY breaks 4800 on closing basis then 3rd possibility on my elliot wave graph as stated on 7th August post, we may see 4300 levels. So i would suggest to book 75% profit on Short NIFTY and start buying 20% of your long term porfolio.
NIFTY levels for 22cd August:-
Clean Bowled!!!! Bulls were out in the first ball and bears took control over them in today’s match. Bears had the winning edge since market opened the batting with 5053 on the score card which was todays high. It made new lows each hour and closed at 4944 down by 112 points. Market is getting more and more difficult for investors. Now a days even FII has introduced one more checklist before investing in stock i.e., political link of the company and its operations. Many research house has came out with political indicators to show up how strong is the relation of company with the politics. Those were the days when politically attached stocks were given preference for high profitability. Today Banking stocks were beaten first on fears of rate hike and then others followed. NTPC gave its sole order to BHEL till now but now have thought of giving its next five year plan orders to even private companies. orders are worth Rs.2 Trillion which will bring up momentum in production of power utility equipments. CCI has cleared RIL-BP deal and has given the clean chit to Jet -Kingfisher deal which was formed in 2008. Maruti has launched its new swift and have received pre launch booking of 50000 cars which is a positive boost. European markets have seen a bearish mood on the weak economy. Jet Airways are shifting totally to low fare model specially in domestic routes to attract mass in such weak economy conditions. Techincally speaking market is trading at 52 week. As expected market has breached 5000 level mark and we expect it to support at 4800 level which i think will be best time to start shopping. Hold yours shorts on NIFTY with tgt of 4788.
NIFTY levels for 19th August:-
Market is again a see-saw. Market opened positive to flat on mixed global cues but then we saw upside movement upto around 5110 levels and then a 90 points fall to around 5011 levels with a marginal positive close at 5056. NIFTY is very volatile with many mixed news around the trading terminal. Today COAL INDIA beats RIL market cap to achieve number one position. RIL was beaten first time ever since 2007 in Market Cap race. Inflation and Anna Hazare are the two trending topics in Indian Market. Talking about Inflation , people are seeing a ease but they are still concerned about the margins. All the companies have shown significant growth in Revenues but the margins have declined due to high interest costs and raw material costs. We may see a decrease in raw material costs as inflation ease but what about interest rates?? Will RBI stop the rate hike? People are saying that 2cd quarter will be worst hit due to high rates and low demand of manufacturing products but I feel margins will improve due to low raw material cost. Coming to Anna Hazare it has posted a new difficult to Manmohan and his team. Sudden arrest by Delhi police has made middle class people roar against the government. What will be the outcome?? We have to wait watch.. And talking about its effect on market then it surely has cascading effect as politics and government are directly related to both markets and Anna Hazare. You might think what is the next option for investment?? Seeing the new highs and increased margins in Gold you might not invest there nor in such a bearish stock market… As per my view you must investment in fixed income instruments such as Shriram City union finance issue or upcoming Muthoot Capital NCD issue.. You might think which is better??? Muthoot is better because it is offering secured debentures which will be traded on Stock exchanges and has fixed return of 12.25% for 3-5 yrs investment. Shriram City Union is also good but its unsecured. I have deeply studied the business model of Muthoot and the company has NIM of 11% which is best in industry above 4% by Shriram City Union. I had mention about RCOM FCCB conversion before a day or 2. They have came up with a deadline to sell its tower biz in next 2 months. In my opinion they are trying to cash rich themselves to meet deadline of FCCB conversion which I think is a good way. So RCOM holders bring a smile on your face J. One more burning issue is on pledged shares. If the promoters pledge his own shares to get more loan then you must exit those stocks because if he is not able to repay then you may see a downside in your investment. Technically speaking markets have acquired the bearish part. MACD and stochastics have shown the bearish mood while RSI was already in oversold zone. I recommend to sell NIFTY on rise with SL of 5390. ISPAT code has changed to JSWISPAT so please make a note of it.
NIFTY levels for 18th August:-
Market salutes 65th Independence day with a positive opening at 5125 but then gradually decrease on domestic concerns. NIFTY closed at 5035 down 37 points. Indian monthly inflation was declared and it was down to 9.22% as per the expectation. Indian inflation is easing out which is a good sign as RBI might end it rate hiking cycle. Experts says that better monsoon will ease food prices and low oil price will ease petroleum prices which are the major constituents of inflation index. State run ONGC is planning to come out with FPO of 412 million shares and they are expected to file RHP early next month. They would like to raise around 12000crores from this disinvestment which is around 5% of government holdings. On the other hand crisil came out with interesting survey of employment which states that india will need 25.5million more jobs by 2015 to grow with the same pace. Net addition to Employment for the period of 2005-2010 was just 2.2 million because self-employment lost 25.5 million while 27.7 million jobs were added. All job seekers and on going jobbers should be happy high to get better job opportunities in coming years. All the telecom companies are gonna hike GSM call rates which will be gud for revenues and will improve margins of telecom sector but i really doubt will they able to cover their auction cost of 3G license?? US and Europe markets are volatile and indecisive of which way to move on which is making Emerging markets a btter option to invest today. On Political front a new case emerged today…ANNA HAZARE was arrested as he was going to move on fast today. I Dont think Anna Hazare could bring back black money. Do you think all the corporates and government employees will allow him to do so?? All big names are involved and they themselves make laws so i think Anna Hazare wont ever get a upper edge. Most of the companies are at life time low or 52 week low in oversold territory but i wouldnt advice yet to take long term postions. Intraday traders can trae in scripts like Jublfood and VIPIND for trading where u can earn volatility on both side. They are safe stocks in such conditions. Techincally speaking market is in oversold condition but its getting more and more into a dug. Gap on upper side is expected to remain unfilled until near term. Markets are expected to touch 4800 levels before that. Strategy will remain wait and Watch on NIFTY.
NIFTY levels for 17th August:-
Looooonnnnng Weekend!!!! Investors were cashing out money from market to have enough liquidity to gift their sisters tomorrow…On that occasion we saw some profit booking on long position and market close at 5073 down 65 points. US and Europe markets ended up positively but our markets couldn’t support their rally. US banks and European banks have given a many interview suggesting that they are liquid rich and they won’t get bankrupt so that was positive blow to markets. US employment data were declared and they were positive for markets. On other hand rumors of france societe generale bank to be bankrupt holds fall. Many research house and bank official has given interviews saying that they are on enough liquid position to face this turmoil. PNB Paribas had the same rumor but they are also safe on liquidity side. Europe markets were boosting on such safe news but this happiness is not gonna last for too long. Today IIP data in India were realized which was up to 8.8% against 5.5% last month and beyond expectation of 5.7%. Top gainer was Capital Goods sector which was at 37.7% against 3.7% while mining was top loser at 0.69% against around 6%. Data was positive for the markets but because of the 3 days holiday people didnt wanna keep overnight position and so they squared off many longs. TATA motors results were out yesterday posting a flat result due to market loss at Europe and US of JLR. They expect its sales to hit next quarter due to this turmoil in US and Europe which is 80% market for its JLR. TATA steel posted good number in last trading hours but due to overall bearish mood stock couldn’t pick up today. Indias export jumped to 81% but this won’t last for long as said by official. Technically speaking market is in oversold zone with unfilled gap at 5230. Today we witness a bearish engulfing on Daily chart. NIFTY is expected to be range bound till this expiry. Rather invest in gold on dips.
NIFTY levels for 16th August:-
NIFTY remained range bound today to close at 5138 down by 22%. NIFTY opened positive with bull power but then had shown some weakness. NIFTY played like a Indian Cricket team i.e., initially we had a early fall but then Dhoni and Praveen Kumar came from nowhere to give a respectable total as did Reliance to NIFTY with high of 5185. US was seen in hands of bears yesterday because of rumors of France debt getting downgrade and government could default. But later on Moody and S&P official affirmed AAA rating on France instruments on Bloomberg TV. They even mentioned that France Debt instruments remains the best investment over the world debt market even above Germany’s AAA rating. US has its own worries about economy which didnt allow bulls to have a driving seat last night. European markets opened positive today which supported bulls in NIFTY. ECB has been buying Italian and Spain debt instruments but thats a temporary relief so you might see some downside in the market. Piramal Healthcare to buy 5.5% stake in Vodafone India with a 2 years of Investment with Availability of PUT option. Piramal aims at 15-20% return. But i really doubt his target. In such a narrow competition in telecom sector will such companies able to give best performance??.. Internal Inflation numbers was out today and Food Inflation was highest at 9.9% in last 4.5 months with High fruits price on WoW. Primary article inflation was at 12.22% against 10.99% last week. Fuel Inflation was marginally up at 12.19%. RBI has biggest challenge these days of Inflation and on other hand instability of financial markets. Will they pause the rate cycle??? In my opinion Inflation would be in control because we will have good monsoon and prices of commodities will ease. Secondly crude is trading a way lower which will have effect on final fuel price and ease them. So i think that inflation will be under control in Second Quarter. China’s monthly export figures were out yesterday and they posted 20% growth which is highest in this year which is a good sign for their economy. Technically speaking Indicators are still hovering around oversold zone. Market seems to be range bound between 5076-5232. Breakout on either side will decide the further trend. Hold your positions if you are short on NIFTY….
NIFTY levels for 12th August:-
BUMPY NIFTY!!! Today NIFTY opened up positive at 5196 and then made a low around 5124 to close at 5161 plus 88 points. Only 70 points volatility but it moved up-down whole day making investors puzzled of its further move. US FED yesterday announces no change in the interest rate until mid 2013 with Range being 0 to 0.25%. Bernake even mentioned that State of Economy and recession are worst then they even expected. Many analyst say that FED are confused what step to take to control US situation so they remain unchanged to their approach towards bailing out its economy. A report says that US banks are more liquid in position then they were before the 2008 turmoil. A official from BoA- Merrill lynch said that erosion in stock prices won’t affect Banks this time around because they have business in hand. Revenues have increase at a slower pace but they are better than 2008 pre-turmoil. Europe Central Bank has been buying Spain and Italy bonds to save the debt crisis but expert says its temporary relief. EU has to think something unusual to save their economy. Analyzing Indias situation, we are at much better place than other countries. Growth story is still on the mind of government as well as many corporate who are expanding their product line. Firstly, Government has decided to participate in bid for Potash resource in Belarush for worth $6-7billion. Government foresees high demand of fertilizers in near future. Government with many private sector companies will participate in this $30 billion bid with many other countries like Russia and china. This will surely help fertilizers companies such as RCF, Chambal Fertilizer and NFL to diversify their product line so you must have these stocks in portfolio. Secondly, SEBI opened limit of QFI to invest directly in Mutual Fund worth of $13 billion which is a large chunk to liquidate MF industry. This will infuse more money in our economy. Thirdly, RIL are about to launch its first Hotel and Luxury house in JV with East India Hotels (EIH). RIL being a cash rich company it is a good idea to move the company towards conglomerate functionality. Fourthly, RCOM yesterday launch first ever tablet pc by any service provider with a lowest price bid of rs.12999. This move will give a first mover advantage to RCOM but question arises whether this will help RCOM to reduce its 24450 crore debt??..If people are not aware then RCOM has FCCB redemption next January at a rate of Rs.656/share and currently stock is at 94…how will it repay it such cash crunch situation??..Keeping RCOM FCCB aside we could see even in a turmoil condition India is still having confidence in its growth story and We are not sitting back. Technically speaking RSI and Stochastics has shown some fresh buying to move out of Over Sold zone at 30 levels. As i mentioned a gap at 5230 is unfilled which would be felt in next 2-3 days if supported by Global markets. Weekly Chart has witnessed a hammer which may be a reversal sign. Strategy would be selling on Rise for long term while for short term buy with tgt of 5400.
NIFTY levels for 11th August:-