MARKET TAKING SUPPORT AT TREND LINE

look at attached chart. we have taken support at 34 dma and trend line. we must move up from here to maintain uptrend for targets of 15100-15300.

market status

yesterday we saw profit booking from 61.8% retracement zone as it was advised. today now we r near very good support zone betn 14526 and 14608. low so far is 14565 and current is 14600. we can see bounce from here. and it may be a last upmove towards 15100-15300 zone.

stock to watch godrej ind cmp 142.5

buy godrej ind for short term investment cmp 142.5

 

stop loss 135

stock to watch BOC INDIA cmp 148

BUY BOC INDIA AT 148.
it is a call for investors with patience.bcz its an illiquid counter with very high promoter stake apprx 90%.
stop loss of 142 can be kept. co had done buy back at 200 rs .

short term trading DCB cmp 39.5

buy DCB for short term trading cmp 39.5

stop loss 35

target 1 rs 41

target 2 rs 43

MARKET OPTIONS - WAVE C OPTION

we have seen two bullish options on 23.06.09 in thread http://pankaj564.blogspot.com/2009/06/market-options.html.

i will like to discuss here one bearish option which is also highly probable option if we make a lower top than 15600 and start correcting again.i have attached chart for the same.

 

wave details :

 

A 21206 to 7697

Ba 7697 to 10945

Bb 10945 to 8047

Bc 8047 to 15600

C 15600 to going on ?

 

targets for C wave . it shd correct minimum 50 % of rise from 7697 to 15600 i.e. 11649 and second target comes at 61.8% level at 10716.

 

on crossing 15600 decisively this view will be invalid.

MARKET STATUS

i hope followers of blog must have enjoyed both side movements.
when we started correcting from 15600 it was mentioned in thread http://pankaj564.blogspot.com/2009/06/sell-off-from-new-high.html
that we might have started correction.and we corrected by 10% from there and we saw 14016 .

again it was mentioned in thread
http://pankaj564.blogspot.com/2009/06/market-options.html
that we may start upmove and so far we have seen apprx 800 points rise from there. we have seen good break out from triangle and sharp movement was seen as per expectation.

what next?
today we have reached near 50% retracement level 14808 when we tested 14782.
as mentioned earlier we have taken support at 34 dma and bounced. now we have reached next imp dma that is 21 dma.
so if we cross decisively this resisatnce zone around 14800 we can see 14995 next resistance zone soon.and we shd do profit booking there to buy in dips again.or due to global weakness if market opens weak we shd do buying around 14300-14400 zone for upmove.

stock specific buying shd be done.

14016 HAS NOW BECOME A STRONG SUPPORT LEVEL FOR COMING DAYS. BREAK OF IT WILL GIVE DEEPER CORRECTIONS.FOR ALL LONG POSITIONS STRICT STOP LOSS OF THIS LEVEL SHD BE KEPT.

retracement lvls

retracement levels of total fall from 15600 to 14016 are as given below

 

38.2% 14621

 

50% 14808

61.8% 14995

 

78.6% 15261

these levles can give resisatance to the upmove

break out from triangle

we have broken out from triangle on upside. target of this break out is 15100.

 

cheers!

5 DAY CHART AS ON 26.06.09

LOOK AT CHART. TRIANGLE IS BEING FORMED. BREAK OUT WILL GIVE SHARP MOVE OF 650 POINTS.

SENSEX AS ON 25.06.09

LOOK AT CHART ATTCHED. COMMENTS ON CHART.

stock to watch NIRMA cmp 144

buy NIRMA for short term investment.

cmp 144. stop loss 135.target 155

stock to watch tv18 cmp 132.5

buy tv 18 for short term trading. target 142.

5 DAY CHART

5 DAY CHART ATTACHED . COMMENTS ON CHART.

sensex as on 23.06.09

look at the chart attached . we are at a critical stage for market.

if we r in positive tomorrow we can see an upmove starting

and if we break trendline we can see more correction.

MARKET OPTIONS

today we have broken 14180 and made low of 14016 and bounced from there.

we were observing downward channel in sensex and we broke out yesterday and we went upto 14668 and revrsed from there. actually if we look at nifty chart we have just resisted from downward channel resistance line.

yesterday also we had taken support on 34 dma of nifty.

 

i have tried to make 5 sub waves  of this move from top of 15600.

 

15600-14621= 979

14621-15022= 401

15022-14180= 842

14180-14668= 448

14668-14016= 652

15600 to 14016 is a fall of 1584 points.which is apprx 10% from top.and 21% of rise from 8047 to 15600.

what cld be next direction of market?

 

i have thought two options

 

FIRST OPTION:

if we have completed major correction at 8047 MAJOR A then

8047 to 15600 Ba

15600 to 14016 Bb-a

14016 to ? a lower top then 15600 Bb-b

lower top to downward again as Bb-c

followed by upmove as Bc

 

SECOND : (BULLISH OPTION)

 

if we have completed major correctionat 7697 then sub wave counts of upmove

 

7697-10945

10945-8047

8047-15600

15600-14016

14016-? a new high than 15600

BREAK OUT FROM DOWNWARD CHANNEL IN NIFTY WILL CONFIRM THE VIEW.

comments from Chanish on market

Chanish has shared his expert views on market status in one of the thread on blog.

they r interesting...go thru it.
 

 

quote

 

Thanks for your regular updates, Pankaj.   Here's my first msg on your blog !

 

As far as the market goes, Pankaj, as you know, I have been bearish all this while, so the views I may express herein maybe biased to some extent.   However, the fact is, technically speaking, although the nifty made a new 52-week closing high at 4655+ on June 10, 2009 this was a mere 2 points higher than the earlier 52-week high of 4653+ recorded on June 17, 2008.    Besides the huge double-top which is always a bearish sign, what is also equally significant is the fact that the nifty couldn't even cross its earlier 52-week high level of 4676+ recorded on June 5, 2008.   And from there onwards, we have already seen a correction of almost 10%, with today's closing level of 4235+ not only breaching Thursday's closing of 4251+, but also, more crucially, the historic freeze closing level of 4323+ on May 18, 2009 twice in quick succession.   TAs will argue that the next level to watch out will be 4116+, which if broken decisively, we may head straight downwards to the level of 3671+ very very quickly, and I will concur with their views, as it will then mean that the gaps between 3671 - 4116, which require filling, would have then served the purpose.   In my view, the sooner this gap is filled, the better for the bulls, otherwise the next downard correction, whenever it comes, will be that much more deeper.
 
I have not resorted to any fresh buying, and am more than 65% in cash, which I hope to deploy only at sharp panic declines.   And yes, until we make a new all-time high in excess of 21,226 (sensex), I will maintain, very strongly, that we will always be closer to sub-9K than new highs.

Cheers,
chanish

 

BREAK OUT FROM DOWN WARD CHANNEL

we have come out from downward channel and as mentioned in last mail that confirms that we have completed first leg downward and now we will see pull back in upward direction of fall from 15600 to 14180.retracement lvls r 14634/14890 and15057 , (38.2/50 and 61.8%).

market status

as expected we saw a pull back. low made on friday at 14180 again a low near 14188.
we have not come out of downward channel yet which was shown in 5 daychart.
we have not broken trend line on linear scale yet.
i discussed about resistance at 21day mov avg and suport at 34 day moving avg.
on friday we got suport exactly at 34 day moving avg in nifty at 4206 and bounced sharply.
what next?
zone near 14180/4206 is giving suporrt at present. for further weakness we have to break that zone.on breaking out from downward channel on upside we can assume we have completed first leg of downmove at 14180/4206 and we can see an upmoving second leg. we will observe mkt in coming days for action in either direction.

5 day chart

yesterday i had mentioned abt trend line on log scale chart which was intact since march. today it was broken and as per expectation more deeper correction was seen.i had attched a 5 day chart showing movement. tomorrow we can see a pull back which can face strong resistance at 14526/4365 which were lows before this correction. as per downward channel we can go maxm upto apprx 14630.

i had given vivek patil's views in last mail.he has given 2 options on breaking 14526, both were bearish.
first more bearish : we can correct severly and we can go below 13519 in coming 3 sessions.
second less bearish view : on correcting by more than 1412 points (14931-13519) from 15600 that is 15600-1412=14188 we can correct upto a level higher then 13519.
today we have corrected exactly upto 14188 and closed at 14265.
please keep his views in yr mind.

now my obervations:
we have broken upmoving trend line on log scale today,on linear scale it may get support around 14k tomorrow and very soon it will break in coming days.
we have corrected below 3/5/8/13/21 days moving avgs as per fibo next imp mov avg comes at 34 dma.
so now we can face resistance at 21 dma at 14637 and can get support at 34 dma at 13828 as on today.
i had discussed retracement lvls of fall from 11621-15600 few days back. since we have violated trend line so we shd consider now retracement lvls for full upmove from 8047 to 15600.
first imp support comes at 13817 at 23.6%(if considered from 7697 it comes 13734)
so i feel there are bright chances that we get corrected upto 13800 and we start a strong upmove as a pre budget rally.on break of 13700 this view will get invalidated. we are having rsi lvls around 51 so by the time we correct upto 13800 we can be highly over sold also.
only 5 trading days r left for f n o expiry of june series. that will also oncrease volatality.

BSE SENSEX - Trendline still not broken on daily log chart

market has corrected as per expectation.today we have broken 14526 on intraday basis and we have closed at 14523, very  close to it.today's low was 14447 well below 14526. technically trend is reversed bcz we have seen lower bottom than 14526 which can take us for bigger correction ranging from 13700 to 12500 zone.

 

as per vivek patil's last weekly analysis there is a chance of very fast correction. irepduce from his report.:

 

 The assumed wave-structure for the rally (i.e. inside "B" leg),
has been shown on the Daily as well as 30-minute charts. The structure
post election-results shows a bearish Diagonal Triangle (also called a
Terminal) shape so far. Daily chart shows a bigger one, while 30-
minute chart shows it for the "c" leg only.

      That shape is created due to reducing magnitude and slow speed
of subsequent rallies. Indeed, the "c" leg has taken 161.8% time
compared to the time taken by "a" and "b" put together. (13 days
against 3+5=8, all of them being Fibonacci numbers). Price-wise, "c"
has so far achieved only 61.8% of "a".

      Within the "c" leg, one can see a probable 1st Extension
Terminal as marked on the 30-minute chart. Inside this, 3rd was
exactly 61.8% of 1st. The Sensex may have completed 4th and 5th of the
Terminal already at last Friday's high near our target level of 15580,
OR is completing its 4th, as marked.

      Confirmation would require a drop below last week's low of 14526
in faster time.

      While we watch for completion of Terminal and its confirmation,
the implication of this pattern could be a fall below 13519 within 50%
time consumed by "c" (50% of 13 = 7).

      Remember, this bearish possibility is only a suspicion at this
juncture.

      My current assumption of Extracting Triangle would be bearish,
but avoid fall below 13519 in 50% time. "d" of Extracting is usually a
slower and complex affair though it should become bigger than 1412
points (magnitude of "b") to confirm the extraction.

      Bullish options can remain open only if the Sensex avoids
closing below 14526. That could convert the current configuration into
another Diametric as marked on the Daily Chart above.

      While the market is deciding its next move at this crucial
juncture near 15580, based on the probabilities discussed, Investors
need to take a call not forgetting these bearish options discussed.
The only positive hope would be provided by a sustainable move above
15580.

******************************************************************************************

i have attached two charts on log scale for total uptrend from march onwards.i tried on yahoo charts and put chart for same but it is not updated for today's move. attached another chart sent by Vipul Shah which is updated with today's movement. as per that chart we are just at a trend line support which is intact from march so that is the last hope for bulls for any upmove and break of it will invite further deeper correction.

Ministry proposes lock-in for FIIs

SOURCE : ndtv profit
http://profit.ndtv.com/2009/06/15233146/Ministry-proposes-lockin-for.html

In a move that could make foreign institutional investors (FIIs) rethink their investing plans in India, the finance ministry has suggested a lock-in for such investments.
The Ministry babus may be biting more than they can chew in their effort to keep a clear-cut distinction between foreign direct investments from institutional money through FIIs. It now wants a minimum lock-in for such money flow.The letter written to the committee of secretaries headed by the cabinet secretary says, “Keeping in view the volatility of capital flows associated with large withdrawals by FIIs, a minimum lock-in period for FIIs could be prescribed."
While one extreme view may support a lock-in, this could definitely end up being a huge sentiment dampener.In 2008 FIIs pulled out $13 billion, taking the stock market down by half. Even as that can be blamed on global conditions, market players say that any form of a lock-in for stock market investments is impracticalAbhay Aima, an investment analyst
said, “This is a part of the ongoing discussion on guidelines for treatment of foreign investment on the same matter.”
The commerce ministry has recommended uniform investment conditions for both FII and FDI in sectors that have FDI caps and other entry route restrictions.The finance ministry has opposed this move saying that FII investments should be treated differently and shouldn't be subjected to same norms as FDI. It has even opposed need for FIPB approval for FII investments.But strangely enough, while it supports the cause of FIIs vehemently, it has also countered its entire stand by proposing a lock-in clause for FII investments.
The proposal to lock-in FII investments will now be taken up by the committee of secretaries, which will chart out the final path for a decison on this, but if the government decides to bring in a lock-in clause it may impact FII investments severely

NICE - How 1+1+1=4??? An Interesting story to learn a lesson..

FORWARDING A NICE MAIL :

 

How 1+1+1=4??? An Interesting story to learn a lesson..

A teacher teaching Maths to seven-year-old Arnav asked him, "If I give
you one apple and one apple and one apple, how many apples will you
have?" Within a few seconds Arnav replied confidently, "Four!"

The dismayed teacher was expecting an effortless correct answer
(three). She was disappointed. "Maybe the child did not listen
properly," she thought. She repeated, "Arnav, listen carefully. If I
give you one apple and one apple and one apple, how many apples will
you have?"

Arnav had seen the disappointment on his teacher's face. He calculated
again on his fingers. But within him he was also searching for the
answer that will make the teacher happy. His search for the answer was
not for the correct one, but the one that will make his teacher happy.
This time hesitatingly he replied, "Four..."

The disappointment stayed on the teacher's face. She remembered that
Arnav liked strawberries. She thought maybe he doesn't like apples and
that is making him loose focus. This time with an exaggerated
excitement and twinkling in her eyes she asked, "If I give you one
strawberry and one strawberry and one strawberry, then how many you
will have?"

Seeing the teacher happy, young Arnav calculated on his fingers again.
There was no pressure on him, but a little on the teacher. She wanted
her new approach to succeed. With a hesitating smile young Arnav
enquired, "Three?"

The teacher now had a victorious smile. Her approach had succeeded.
She wanted to congratulate herself. But one last thing remained. Once
again she asked him, "Now if I give you one apple and one apple and
one more apple how many will you have?"

Promptly Arnav answered, "Four!"

The teacher was aghast. "How Arnav, how?" she demanded in a little
stern and irritated voice.

In a voice that was low and hesitating young Arnav replied, "Because I
already have one apple in my bag."

Moral :

"When someone gives you an answer that is different from what you
expected, don't think they are wrong. There may be an angle that you
have not understood at all. You will have to listen and understand,
but never listen with a predetermined notion."

14526 BROKEN

14526 is finally broken today,our anticipation is true and trend reversal is confirmed.
lower bottom is formed.now we are confirmed on correction. first target zone will be around 13500-13700 as mentioned in prev mails.we will watch there upmoving trendline which is intact since march.

MARKET STATUS

market opened weak alongwith weak global markets . it bounced from first retracement support area of 14622.
yet we have not broken critical lvl of 14526 to confirm trend reversal technically to form lower bottom.

assuming that we are correcting and considering we are on pull back we can go upto retracement lvls in upward directions at 15111/15226 50and 61.8% of fall from 15600 to 14622. corresponding lvls in nifty are 4549/4583.after moving upto any of thses lvls if we come down our bearish view cld be valid.cross over of 15261 (high of monday) can be first indication of invalidation of bearish view.

guj alkalies and hind oil explo has shown good strength today.bank stocks have also shown good strength today.

sensex as on 15.06.09

as per our anticipation we have corrected today. we have broken support line in a rising wedge, which is a bearish signal. we have broken rsi support line shown in chart.i have given retracement lvls on chart where we can get support and bounce.

our strategy shd be to sell on rise.we have already lost 800 points apprx from top so we may get bounces in betn from support lvls.

RIL BREAKS UPMOVING TREND LINE

today reliance ind has broken upmoving trend line decisively which was intact since first week of march.being a heavy weight on indices weakness is being reflected in market.

 

sandip sabharwal's highly bullish view

i had posted Sandip Sabharwal's mail on 23/05/09 with title of panic buying.

on his blog testerday he has posted a highly bullish view for coming few years.

i am giving herewith link for same.go thru it. it is interesting.

 

http://sandipsabharwal.blogspot.com/2009/06/wave-3.html

top at 15600?

look at chart attched, waves following fibo ratios nicely.

sell off from new high

we have seen today new high near 15600 and sell off is seen. dont take long positions now. it may be a starting of correction.

stocks to watch

castrol above 340 and hind oil explo above 138 may be good technical pick for short term trading,

do not think for investments, go for short term trading only with strict stop losses.

DOW AND SENSEX

DOW AND SENSEX

 

i will like to put 2 charts one is for sensex and other is dow. both are for last 6 months duration.if we observed them, we find that both dow and sensex made bottoms in march first week and started moving up. economical health is reflected in charts. from march bottoms we have nearly doubled from march bottom of 8k and dow has moved from 6.5k to 8.8k only 35% rise.

we moved near 200dma around 11300 ,consolidated for few days and crossed it and we have moved up by apprx 35% from 200ema.and dow is struggling around 200ema since no of days and still it has not been able to cross it decisively.

normally in technical terms 200ema is very good tool to judge whether we r in a long term bullish or bearish state.

so i feel these charts are reflecting that US econmoy is yet in a bad shape in comparision of our econmoy.so for US it may be taking more time to improve health and for our markets we can correct and say we reach near 200dma and start moving up. we r having PE of 20+ so we have run ahead of fundamentals with optimstic sentiment due to favourable political set up.and by the time we correct fundamentals may catch up in coming 2 qtrs.

 

now coming to fibo no at 61.8%, that is not the only reason for concluding to book profits but there r no of other indicators or facts. we have moved by nearly 100% from bottom. we have moved up without any meaningful correction , and more we move up without such correction more we are in danger of bigger correction.-ve divergence is seen in rsi and macd. we r highly over boght in daily and weekly charts.

 

another thing what i feel is that if US markets cross 200ema decisively then FII may change their view towards emerging mkts and they may find value in their mkts in comaprision of emerging mkts and more profit booking can be seen in emerging mkts.

 

in nut shell we are at a very good higher lvls and it is time to genearte maxm cash or to park yr funds in defensive bets or diverting them to gold as a hedge.

STOCK TO WATCH NALCO CMP 345

nalco can be added for short term . cmp 345.
we have tested today last top of 15580 we had seen before going for last painful leg for correction from 15580 to 7697.on crossing it we can see 16k also.
we are in a very serious resistance zone area so keep very very strict stop losses on yr long positions.as i mentioned yesterday watch ril( rpl also). today it has closed up by 2% , if we have to cross 15580 we need ril moving up.

15580 TESTED

we have tested today 15580, a major resistance level from where last leg of correction was started.it is better to be cautious then repent later....
dont miss to book profits.dont be content with notional profits only.
in prev days i had given resistance levels of 14931/15107/15580 and 16000 for this upmove.

STOCK TO WATCH TATA POWER CMP 1140

TATA PWER IS LOOKING GOOD FOR SHORT TERM BUYING. CMP 1140

SENSEX CHART

LOOK AT CHART AND COMMENTS ON IT.
WATCH RELIANCE IND TOMORROW. IT CAN GIVE DIRECTION TO MARKET.

market bounces

after correcting from 15257 made on friday we have gone dn to 14526 in today mrng. looking at retracement lvls,50%/61.8%/78.6% lvls are 14892/14977and 15100. watch this lvls. failure to cross these lvls we can see lower lvls.shorters can keep stop loss of 15100.

as mentioned yesterday IT shares are showing strength today also.

MARKET STATUS

refer link .http://pankaj564.blogspot.com/2009/06/market-status.html
it was posted on 4th june.next day as per expectation we went upto 15257 and started selling off. i had given a comment when we were near 15250 warning that it is becoming dangerous to be on long side.

finally today broad based sell off is seen. in sensex we are at lower lvl of a range which i mentioned on 4/6/09 at 14600. but corresponding lvl in nifty was around 4450 and it is broken decisively. even global markets are also showing heavy profit booking. what next?
on breaking 14600 we are going to see more weakness. it may be prudent now to sell on rises.
refer long term rsi chart posted today.
only IT sectors leaders like infy, wipro, tcs were showing some strength today.

DOW STRUGGLING AT 200 DMA

UPMOVES STARTED GLOBALLY IN FIRST WEEK OF MARCH. WE STRUGGLED FOR FEW DAYS AND CROSSED 200 DMA IN APRIL WHICH WAS AROUND 11300.DOW HAS REACHED AT 200 DMA NOW AND DOW IS STUGGLING THERE AND IT IS NOT ABLE TO CROSS IT DECISIVELY.ITS FAILURE TO CROSS 200DMA WILL CREATE PRESSURE IN WORLD MARKETS.

long term rsi chart

look at chart.rsi lvls are very close to resistance on long term weekly charts.

STOCK TO WATCH CUMMINS CMP 266

CUMMINS CMP 266 FOR SHORT TERM
KEEP STRICT STOP LOSS

market status

we have closed today near upper boundary of the 14600-15000 range. its highest closing since long time in our mkts.crossing of this range can give move of 200-500 points but this upmove shd be used for profit booking.
rsi values are dly 76 and weekly 77.-ve divergence still continues.
moves in defensive sectors like fmcg and pharma are seen which are normally seen at the end of a rally.euphoric buying is seen in mid n small cap stocks irrespective of fundamentals.
PE of indices have crossed 20+lvls which indicates stretched valuations.
we are in fibo time clusters as discussed in prev mails.do not get stuck with high priced shares.

STOCK TO WATCH DABUR CMP 114

fmcg stocks r moving. hul,itc,colgate has moved. look DABUR for for short term investment for 10% gains.cmp 114.

DEFENSIVE STOCKS MOVE AS PER EXPECTATION

as we had expected defensive stocks like hul, cogate, itc, tata tea etc are moving higher. may be smart money might be shifting from momentum stocks to defensive stocks.we are not able to cross 15k zone.if we are not able to cross 15k barrier we may move towards lower boundary of range 13.5k.decisive move above 15k only can give strength to mkt.

BOOK PROFITS

I HAVE RECOMMENDED FROM 4/5/09 ONWARDS FOLLOWING STOCKS FOR SHORT TERM BUYING.
TATA STEEL, SAIL,SESA GOA,CESC,TORNT POWER,IFCI,GT OFFSHORE,RNRL.APTECH,FIN TECH,GDL,BIO CON,LAKSHMI OVERSEA , HOTEL STOCKS, CEMENT STOCKS ETC. I RECOOMEND TO BOOK PROFITS.

market breaks sharp upmoving trend line.

as per expectation +ve global mkts helped to break recent top of 14931, but after that we are correcting now and we have broken sharp upmoving trend line which was giving support since last 5 days.refer link. trend line is shown in purple color.
http://pankaj564.blogspot.com/2009/06/global-mkts-will-help-to-break-14931.html
today is 55th day from recent bottom. chances of top formation are high. avoid buying.

stocks to watch

yesterday i discussed abt switching into defensive stocks like fmcg. yesterday we have seen good moves in fmcg stocks like colgate, hul, itc. these stocks can be bought now bcz we r reaching closer n closer to intermediate top.
thermax has given good upmove yesterday.closing was 397.can be bought for further upmove.keep stop loss as per yr convenience.

GLOBAL MKTS WILL HELP TO BREAK 14931

LOOK AT CHART
PROFIT BOOKING IS RECOMMENDED ON UPMOVE. TOMORROW WILL BE 55TH DAY FROM RECENT BOTTOM.

WATCH HOTEL STOCKS

watch hotel stocks like ind hotel, hotel leela for short term trading