1st August

Nifty needs to cross and sustain above 4360 for further movement. 4480 would be a strong resistance above which markets would gain alot of strength.

After UPA trust vote banking, insurance and power sector reforms were expected. A little later than expected but "Govt approves Rs 17,033 cr for power reforms". Power stocks should be the focus again.

Insurance sector reforms would be really good for banking companies into insurance like ICICI and SBI. The real value unlocking would happen then. So watch out for those reforms for fantastic returns from that sector.

Stock wise watch out for SBI BOB Bank of Rajasthan, AB NUVO, Hindustan Zinc for strong moves. Take positions only above thursdays high. Stop loss of 2%.

Market view for 31st July

Nifty still continues to be in the range of 3800-4450. If it manages to close above 4450 for 2-3 days then the upside would be possible upto 5000.

With crude falling and global markets rising since last two days, we may see more pull back. Market had fallen due to unexpected repo rate hike. The impact of that would definitely be negative but on the other hand Govt. is expected to announce banking, insurance and power sector reforms which may boost the market again.

With the announcement of reforms we are expecting markets to pull back 10-15% which would be an exit level taking decent profits in the short term.

Nifty - 4600 or 4200??

Nifty failed to sustain above the trend line level of 4500. There for we saw the profit booking. Sensex also failed to sustains above 15100.

Coming days we need to watch out for its movement. It could test 4330 and 4200 as of now. Below that we may be heading towards 4000 and 3800 again. Alot of gaps in stocks may be filled and that could support the market.

Fannie Mae and Freddie Mac. Am sure every one is reading about it. A little of my view on it. These two companies control 60% of the mortgage market of USA. The total value of this is 5.5 trillion dollar. Double of Indians economy.

Now a bank in india needs to maintain 12% as capital of its total credit. Thats the minimum and there for indian banks are well regulated. Fannie and Freddie have just 80 billion $ in capital against 5.5 trillion as credits. Which works out to less than 2%. At the current juncture I dont think its easy for Fed also to come forward with any saving option for them.

US as such is in a soup for sure. but they do have huge gold reserves. Matter to time. coming few quarters they should be able to solve issues. The property prices there have fallen drastically. The price one would pay for a property in india, he would get two in US. more over theirs is a developed economy. so over time it would still be a good bet and i expect US to come out of this in a few year or may be months also.

Sensex Gap

Sensex has a gap at 15390. Above 15100 sensex will pull up further. But 15400 levels would be crucial to watch out. Above that 15700 where we should consider maximum profit booking or exiting longs or keep stop loss.
Reversal from there would be likely. Caution on all rises is necessary.

UPA back Markets up 850 points.... what next.

As expected if the UPA would come back markets had to rally. Most of the stocks rallied. ADAG stocks rallied an average of 15%. Larsen BHEL DLF. Alot of mid caps were really god. Power grid did 104. My next target is 118 stoploss close below 98.

What worries me, this rally or pull back to be clear will not sustain for long. The movement would be very sector specific and banks and power stocks would be the focus. Larsen, BHEL, NTPC, and many many more stocks have a huge gap. The gaps would definately be filled in coming days. The question is when? so be prepared to see panic again.

Reliance communications may go up further 7-10% but at the same time would be little risky. Alstom, Areva, Power grid, NTPC would still be safer bet as of now.

Crude has cooled off alot and near 125$. Close below 129 this was expected. A very stong support at 118. If reverses then we will see equity markets getting beaten up again.

Stocks to watch

Few of the stocks mentioned last week have finally moved and given break out on Friday. Reliance Ind DLF.

Alot of stocks are again at the tip of the trendline. break out will see a good pull back in them. The point to consider is that market should sustain. Now most of them being largecaps would pull the market up. But sustaining is the question. So be careful and use stoploss strictly.

Reliance can further go upto 2200-2260 above 2120. Larsen and Tubro above 2590 would be good for 2640-2700. NTPC above 177 would see 188-196. Patel engg above 410 can see 440. Power grid can be accumulated for 104-110.
Religare enterprises above 415 could give 10-15%. ONGC is another stock to watch out for.

Monday and tuesday would be very crucial for the market and volatility could be extreme. Need to be careful and watch out for news.

My view is that LNT ONGC RIL would move and pull the market. If UPA wins then we will see a good pull back. If not then we will to exit the stocks with trailing stoploss and sit on cash for some more time.

Nifty Crude update

Nifty has close above the trend line for the second week now. Unable to break the support line of 3750 and a pull back showing further strength. Upside is possible upto 4500 now in coming days. But alot of volatility and profit booking in between will make it tough to trade.

We are lined up with three curcial issues at this point.
1. The UPA to prove its majority. It has now become really important for UPA and for the markets. If UPA manages to prove majority I expect the market to rally in short term. In case it fails to then may be we will see new lows forming.But alot of caution is
2. Crude. As mentioned earlier if crude breaks the level of 128 and closes below that we will see further weakness. Now that seems to be likely again. Crude has closed below its 3 months average and also shows levels of 123$ as of now. But alot of caution is required in crude. Never know what when happens. If crude cools down it would support the stock markets alot. But not to forget even at 118 or 100$ it impacts our economy really hard.
3. Inflation. Inflation as of now looks stabilised around the current range for a while. Personally I feel the infation and IIP numbers are misleading. With 56% weightage of crude on Inflation it is not really justified. Agri commodities and metals are cooling down on the other hand. So the picture of inflation is not clear.

Few more crucial things to keep in mind. Monsoon... no rains in most parts of India. Crops this year may fails drastically. All we can hope for is rains to come soon. Monsoon has always been a sentiment changer. Good monsoon markets gets support. But not to forget monsoon contributed to just about 2-3% to our GDP. Is that really a big impact? Need to study that.

Results not really attractive over all. But companies considering Capex plans with rising interest rates. Some thing surprising and good.

Fed has started talking about raising interest rates early. A very good sign as it will cool down crude further and may be the funds will get diverted to equities. Hope they really do that soon and not wait for august to come.

Crude 18.7.8

Crude yesterday made a low of 129. 129 also happens to be its 3 months average price, where it took support and closed above it.

Today if Crude closes below 128$ we will see further correction upto 124-118 levels in coming days.

Reversal from here would pull back crude to 134 and above. The speculation going on in crude with over 5000 hedge funds having positions in it would not die down so easily.

Another aspect to consider is that crude has fallen for 3 days, 4th day could be a pull back, if not then we will see a correction happening for another two days.

Bhel DLF ICICI RIL Reliance Infra

Reliance Industires close above 2130 would lead the market rally. Levels of 2300-2450 would be tested again. This should also lower the market volatility in the short term.
Can take positions if closes above 875. Good upto 980-1100 range.
ICICI is in a good range bound movement of 550-675-700. Break on either side would start a fresh trend.
DLF above 495 good for short term. Can look out for 540-600.

BHEL above 1640 looks good upto 1800.


Other stocks to watch out for short term are JP Associates for 185. Bank of India, JBF Industries, RPL above 178, Jyoti Structures above 118, RNRL seems to be in a consolidation phase. Should watch out for good movement and take action.
Cairn India has tested support can take positions and add more on dips. Very good for long term investors.

Nifty 10th July.

The first chart shows a clear short term trend for nifty. Nifty has broken out of the short term trend showing bullishness. It has also managed to close above average after a long time and this trend may continue upto 4250-4300 and 4440. Above that we may see further strength and test the 3 months average of 4700.
Other the other hand if Nifty sustains below 4080 for a while then we need to re consider being long. Best option would be to use a trailing stop loss or use final stop loss of Nifty close below 4030.

A more interesting thing is the support nifty has taken on a fairly long term support line. It has managed to close above that last week and even this week it has not broken it. This could be a sign of a good reversal. But not to forget, a fall is still possible. As mentioned 3 days back where long term investors could start accumulating stocks could use this support line as a trigger for stop loss. Where in they would get chance to buy further on dips below the existing lows.

Reliance Industries

Reliance Industries have been in a strong downturn range as shown in the chart. Unable to break the upper trend line has created weakness in this script.

If sustains below 1940 there would be further fall. To show strength and take positions RIL needs to close above 2090.

With the crude falling, Left withdrawal, World markets being strong, in all alot of parameters being in favor of the market now, we can expect RIL also to break out. But being a heavy weight we need to be cautious of its movement. It alone has the capacity to pull the market down as we have seen in the last two days.

Nifty 8th July

Nifty broke out of the upper channel line forming a fresh wedge which failed to move well. The closing was very weak with Reliance Ind falling 5%.
On eod charts nifty has formed an inverted hammer. It could be an indication of trend reversal and we can expect some pull back tomorrow.

Another thing to note is that Nifty is 15% below its 3 months average price which is a huge difference and indicates some pull back in the coming days. More over it is 27% below its 200 days average which is again a good sign. In the short term there could be some fall or consolidation. This is a very good opportunity for long term investors. They can start buying stocks at this level and add more on dips.

RPL would be a good bet below 165 use every dip to buy. Cairn India has fallen after a long time, buy below 220 upto 202. GMR mentioned a few days back has shown some strength and can be considered adding in small quantity for long term.

Market view 7th July

Nifty after a long time has shown some trend. Breaking the trend line on either side would decide the trend for coming days.
Upside 4010-4240-4300 would be possible if all global and political matters support.
Break of the line on the down side would lead us to 4800-4730-4665.
Will update the stocks which we can consider for swings in the coming week.

Market View 4th July

On Wednesday the market had tested 5 days average, it failed to cross and close above it. It proved to be a technical pull back. Todays movement was a clear indication that short term trend still remains unclear. Those who would have gone long on wednesday, their stop loss got triggered.

It would not be advisable for any one to take positions until market closes above 4200 as of now. Down side is still possible upto 4770 and 4730.

GMR and RPL

GMR Infra has formed a clear head and shoulder pattern. Current price of 88 is a level where the stock had consolidated in the past. Down side from here could be up to 78. Falls can be considered to enter for long term target of 137 which is about 75% from here.

Reliance Petro at 175. Is at its upper trend line which has not been broken from long time now. If manages to close above 187 would see old levels again. One can enter above 187 with stop loss of close below 180. Upside in short term at 196-204 and longer term at 264 as of now.

Nifty 2nd July

As mentioned yesterday, market did bounce back after a little fall. Almost or could be the highest rally till date.
Surprisingly todays high on Nifty of 4107 is just the 5 DMA. which was to be touched any way.
This could be a break out for coming days or could be just a technical pull back.
Alot of stocks have given breakouts, but this rally should sustain. Hold on to longs until 4010 breaks. Below that we may see selling again.
Few things to keep in mind at this stage. One days pull back does not mean start of a rally. Fiis have been buying since last two days, but that is just short covering and they still have billions in short positions. They are not buying in cash market, which shows they are still not comfortable.
Oil is still an issue, an issue which might not affect any company but the entire economy over all. The burden of crude is huge to the economy and may slow down our growth. It does not really matter if we grow at 7% instead of 8.5%, we are still growing, but the issues lies when our practicle inflation is more than our growth rate.
The political interest behind the nuke deal. Weather or not the Left party would support congress on this issue. It ideally does not matter if they pull out. Rather things would get more streamlined since thats one good thing congress is intending to do before being wiped out in coming union election.

Market on 1st July

As mentioned on 27th, Nifty was to take support at 3880, it has reversed from 3878 as of today. This level is the support line. If closes below this for few days we would be heading for new lows.

Being a support line from 2005 fall on wards and also held the 2006 fall. I expect this line to support as of now and see some pull back in Nifty upto 4050-4120 levels.In case it does not and nifty closes below it for 2-3 days we would see new lows.

Fundamentally stocks were looking good when market was at its peak. Fund houses and analyst were giving huge targets for the same. But now at current levels when stocks are available at 70% lower price, not one has interest. But look at things the other way, Anil Ambani owned companies are down more than 70% from peak. Does Reliance group have any credibility.? Can we rely on them any more? Is the company hollow inside like any other small cap? Is it a game being played by Anil Ambani where in he is making the money shorting his stocks? Big question to think about.