Archives : Thanks To Weakening Dollar & Disinvestment Program - 13/11/2009

THANKS TO WEAKENING DOLLAR & DIS-INVESTMENT PROGRAM – 13/11/2009. 

Last week we wrote that the indices have to close above their 50dma and 61.8% retracement of the current fall, to resume a short to medium term uptrend. In short, both Sensex and Nifty had to close above 16667 and 4935 respectively. Both the indices have managed to do so as the Sensex has closed the week at 16848 and Nifty at 4998. The shorts were butchered mercilessly this week as the market went from strength to strength.

 


THANKS TO WEAKENING DOLLAR & DIS-INVESTMENT PROGRAM – 13/11/2009.

Last week we wrote that the indices have to close above their 50dma and 61.8% retracement of the current fall, to resume a short to medium term uptrend. In short, both Sensex and Nifty had to close above 16667 and 4935 respectively. Both the indices have managed to do so as the Sensex has closed the week at 16848 and Nifty at 4998. The shorts were butchered mercilessly this week as the market went from strength to strength.

WEAK DOLLAR & DIS-INVESTMENT PROGRAM FUELS THE RALLY. 

The current pull back which started from the previous week is not an India-centric phenomenon, but the global markets were rallying due to a weakening dollar. As a result, emerging market got strong inflows and India was one of the major beneficiary. Other reason is the Disinvestment Program, which the current government has undertaken with all possible seriousness. For the Disinvestment Program to succeed, it is imperative that the market needs to stay positive and attract traders and investors.

SENSEX. 

The Sensex opened the week at 16190, made a high of 16909, a low of 16147 and closed the week at 16848. The Sensex closed the week with a gain of 690 points, thus forming a big body Opening White Marubuzo on the weekly charts, which will have bullish implications in the coming week.

 

The Sensex has managed to close above the 50dma and as a result the short to medium term trend has turned up. This critical 50dma is at 16516 and hence it will act as a strong support and it will be very important that the Sensex does not close below this average.

 

If the recent correction (17493-15330) was very steep, then the recent rise from 15330 is equally steep. After such a vertical rise, the Sensex is consolidating near the top of the range almost resembling a bullish continuation pattern called ‘Flag Formation’. A breakout of this pattern will be confirmed when the Sensex will close above 16900 and then it will have a possible target of 18162.

 

If we take into consideration the entire major fall from 21206-7697, then the 78.6% retracement of this fall is at 18315. Hence, this retracement target accompanied by the Flag Pattern target will form a resistance band between 18162-18315.

 

The Directional Indicators (+DI & -DI) have both given a Buy signal when the +DI crossed over –DI from below. According to this indicator one can go long with a stop loss of 16371.

 

The momentum indicator like the RSI (56) has already given a Buy signal. The MACD & ROC both have given a Buy signal. The ROC has already entered positive territory while MACD is on the verge of entering positive territory.

 

For the week ahead, Sensex will face Resistance at 17092-17350-17735. Sensex will find Support at 16605-16457-16119.

 

 

NIFTY.

The Nifty opened the week at 4796, made a high of 5017, a low of 4789 and closed the week at 4998. The Nifty closed the week with a gain of 202 points, thus forming a big body Opening White Marubuzo on the weekly charts, which will have bullish implications in the coming week.

 

The Nifty has managed to close above the 50dma and as a result the short to medium term trend has turned up. This critical 50dma is at 4906 and hence it will act as a strong support and it will be very important that the Nifty does not close below this average.

 

Just as the recent correction (5181-4538) was very steep, the recent rise from the low of 4538 is equally steep. After such a vertical rise, the Nifty is consolidating near the top of the range almost resembling a bullish continuation pattern called ‘Flag Formation’. A breakout of this pattern will be confirmed when the Nifty will close above 5018 and then it will have a possible target of 5402.

 

If we take into consideration the entire major fall from 6357-2252, then the 78.6% retracement of this fall is at 5478. Hence, this retracement target accompanied by the Flag Pattern target will form a resistance band between 5402-5478.

 

The Directional Indicators (+DI & -DI) have both given a Buy signal when the +DI crossed over –DI from below. According to this indicator one can go long with a stop loss of 4860.

 

The momentum indicator like the RSI (56) has already given a Buy signal. The MACD & ROC both have given a Buy signal. The ROC has already entered positive territory while MACD is on the verge of entering positive territory.

 

The strikes of 4900 and 4800 are showing lot of PUT writing and hence should act as strong support.

 

For the week ahead, Nifty will face resistance at 5077-5152-5265. Nifty will find support at 4924-4860-4803. 

INDEX LEVELS: 

S3S2S1CLOSER1R2R3
Nifty4803486049244998507751525265
Sensex16119164571660516848170921735017735

LAST TIMES RECOMMENDATIONS: 

Last all the targets were achieved except for Aurobindo Pharma. The star performer of the week was Engineers (I) which rose by 15%. 

STOCKReco PriceTgtReachedLot SizeProfit
Buy Engineers128414371480400Rs.78,400
Buy Mphasis722753778800Rs.44,800
Buy Auro Phar.818854839700Rs.14,700
Buy Ashok Ley5155559550Rs.38,200
Buy HCC1341461482100Rs.29,400
    TotalRs.2,05,500

THIS WEEK’S RECOMMENDATIONS: 

STOCKCMPSLTGT-1TGT-2
Buy Siemens558551574590
Buy Fin Tech1403137314451481
Buy Nag Cons.168163177184
Buy IDFC171166177186
Buy L&T1644161916781729

WATCH OUT FOR:

 Siemens

 Patel Engg

Disclaimer : The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. No representations can be made that the recommendations contained herein will be profitable or that they will not result in losses. Readers using the information contained herein are solely responsible for their actions. Information is obtained from sources deemed to be reliable but is not guaranteed as to accuracy and completeness.

Copyright © 2000 - 2018 Jatin Sanghavi. All rights reserved.
No part of the material on this website may be reproduced or distributed in any forms or by any means, electronics or mechanical without the written permission of the author.
Sitemap