Daily market view...June 13, 2008

As said in these columns few days earlier, the short rally up, is in progress. NIFTY managed to break the barrier at 4540. Now 4600/4700 is probable. I did advise people in my yahoo messenger list to buy calls towards close yesterday. In spite of so many negative cues yesterday markets managed to bounce bank thanks to hammers and morning star on charts. Its a testimony to the fact that technicals work very well. However, please note that the broader trend is still down and all these rallies are relief rallies that will sustain only for a few days. We have an engulfing bull pattern on NIFTY future charts today which is yet another confirmation for a relief rally. So for this brief period stay long hedged with puts. All important levels are posted in the uploaded chart.

STOCKS
RPL - Once again this is part of our success story. Once 174 was crossed, as indicated here(check earlier posts) it went upto 180 straight. Next resistances are at 187 and 192. It has moved up with decent volumes and will continue to rock in this rally.

BANK OF INDIA(BOI) - CMP 269.15. BUY targets 275, 283. SL - 252 (This one's pretty deep)

BOMBAY DYEING - CMP 746.95 BUY targets 755, 795. SL - 738

CHAMBAL FERTILIZER - CMP 83.2 BUY above 84.25. Targets - 85, 87.4

Watch out for Inflation numbers today...

Negative cues and news flood market...June 12, 2008

The US markets tanked again sending a bad cue to all markets world over yet again. So we begin the day where there is a sea of red across the world already. To top it, RBI has hiked the repo rate. So, we have a lot of negatives for the market and hardly any positives. The only positive is on the technical front. NIFTY has formed a morning start candlestick pattern which is a bullish reversal pattern when it occurs in prolonged downtrends like the one we are in now. Yesterday's rally could not break through the resistance at 4530-4540. If we break 4370 on the downside and also close below 4400 we will see 4200 next in the coming days. Given the conditions, we can also expect a bounce from lower levels when markets get oversold for short rallies. Its going to be an exciting day ahead. Lets just hope it doesn't turn out to be a black thursday.

Today rate sensitive sectors like banking stocks and real estate could take a real beating. I am giving some important levels for some stocks, trade accordingly.

ICICI BANK - CMP 741.2 IMPORTANT SUPPORTS/RESISTANCES - 719, 673, 662, 645, 634
SBI - CMP 1314 IMPORTANT SUPPORTS/RESISTANCES - 1285, 1271, 1254, 1228, 1208

Watch IFCI, something brewing in this counter. Stock is slowly moving up against the market. Some accumulation is happening. One of these days, this could explode up. Above 65 this stock is a very strong BUY.

Infosys call given yesterday hasnt hit our stoploss yet. Below 1890, 1860 is a strong support. Once broken it should head to 1800 straight. This is also showing small reversal signs on charts. So lets be cautious and trade as per levels.

A short rally on cards...June 11, 2008

These are very volatile days and there is very little place to hide in this market. One of the sectors which was running up against the market was IT. And now, even IT is showing signs of tiring. In NIFTY, we could have a short rally upto 4600/4700 levels driven by short covering. This will be a purely technical rally driven by oversold conditions. Also, we have 2 hammers in candlestick charts. Hammers when they appear on charts after a prolonged rally signify that the rally is tiring. In this case, the downtrend maybe tiring for a brief moment. Due to extreme volatility, we will still avoid trading NIFTY. Above 4540 NIFTY will try for 4600 levels.

STOCK PICKS
Infosys technologies - CMP 1854. Short on rise around 1890 levels with SL above 1900 for target of 1800. If the stock crosses 1900 with good volumes then it will become a buy.

Neyveli Lignite can be looked at for shorting. Please see yesterday's post for details.

Nagarjuna Fertilizer CMP 42.3, has taken support a lower trendline of a symmetrical triangle and now may try for 46.4 and 50.

RPL has closed above 200 DMA for second consecutive day. Watch this stock above 174.7 can hit 180 straight.

I am posting NIFTY chart here with major supports and resistances.

Scary Markets...June 10, 2008

Yesterday's market was pretty scary but very entertaining for us folks who are sitting on the sidelines and watching. It was a very volatile day of trading where NIFTY swung both above and below 4500 multiple number of times. A new 2008 low was created in market. A base has formed around 4400 now. What is scary is that a number of shorts have been created even in these levels. Now if 4400 breaks on a closing basis, we can short this market for lower targets of 4000 and 3600 possibly. Our shopping list that we created last week can wait for now. We need not rush into buying and wait for clear signs from market. Today again will be an off day for us in NIFTY. We will watch the wild swings from the sidelines till we are clear. (Remember money not lost is money earned. Its very important to preserve our capital first and then make profits...so by not trading couple of days we will do ourselves a lot of good). However, we can look at the below stocks for trading.

STOCK PICKS
RPL - This stock is rallying on back of some news. It has closed above 200 DMA even in a falling market. Lots of longs created in FnO space. BUY RPL today above 172-174.8 resistance areas it can rally upto 180 levels.

NEYVELI LIGNITE - Stock is breaking down from a symmetrical traingle pattern as shown in charts. CMP - 106.4 stock is headed towards 86 levels in the coming days. This is a positional short. Intermediate support at 103 and 100.7

NAGARJUNA FERTILIZER - CMP 39.3 If closes below 38.3 today, short and carry target 35.8, 34.8, 30.9

Market is still looking very weak and bad as of now. Avoid carrying any overnight long positions for sometime.

A make or break day for market....June 09, 2008

Today is a very interesting day in the market. It is so difficult to predict what will happen now. We have very bad global cues to start with. This means market could very well open low and test the supports around 4500. We have two important supports for this market on the lowerside at 4530 - 4540 and lastly 4440. Now these need to be held for any bullish case. There are 2 possibilities here

1. Market bounces off the given supports. In which case, we could have rallies upto 4800+ levels.
2. Market breaks the supports given. This can be disastrous for market as we will go down to 4000 and probably even 3600 then.

Based on FnO data, the indicators are that of a bounce from these levels and not a break. Also, now that the entire mass is bearish, market could very well show who is the king and move in the opposite direction. Again all these are possibilities and this time I do not wish to speculate too much which side it will go and take positions in advance. So today again we will be on the sidelines and see where it is headed. My guess is, it will bounce.

The very small long positions built on friday, (I have a 4700 call only one lot) can be held as long as these supports are held on a closing basis. If there is a good bounce today off supports, then this week we could have a good rally. I haven't posted a chart today as there aren't too many changes as such.