BULL POWERS DALAL STREET – 15/02/2008.
Our readers will do well to recollect that last week we had mentioned that the correction is already four weeks old and the market will stage a recovery this week and voila it did. I am really happy that week after week, we are able to guide our readers to safety. Lot of analysts who write and come on television, have recommended exactly opposite and investors and traders lost lot of money. Hence in this deep, stormy sea of uncertainity, we act as a light house for all our readers, who always look upto us to show them the right way.
VALENTINE DAY GIFT.
RELIANCE POWER OFF.
HOW TO TRADE?
LAST WEEK’S RECOMMENDATIONS:
THIS WEEK’S RECOMMENDATIONS:
VALENTINE DAY GIFT. Market rallied tremendously on Valentine day and Sensex & Nifty posted handsome gains of 817 & 272 points respectively. The rally continued on Friday despite weak US market cues. For the lovers of my articles, I have a valentine gift for them in the form of Allied Digital, CMP is around 725 and one can think of buying this wonderful script till the next valentine. Minimum appreciation expected is more than 100% as target is around 1500 and on the higher side 1800.
RELIANCE POWER OFF. Reliance Power listed on the bourses and went down all upto 330 levels. This against the issue price of 450 and for the retailers, it was 430. For the first time, investors lost their money in the IPO of any Reliance group company. The investor confidence has been shaken and from now onwards they will not pay such a high premium to any other stocks belonging to the Reliance stable. SENSEX.
Sensex opened the week at 17427, made a high of 18142, low of 16457 and closed the week at 18115. The net gain on a weekly basis was 651 points. As we had predicted the market will bounce back after four weeks of correction, it bounced back at the end of the week and closed the week with good gains. On the daily charts, there are two gaps, on the higher side between 18274 – 18509 and the other gap between 17141 – 17265. The gap on the higher side will act as a resistance going forward and lower side gap will act as a good support in a downfall. The trendline resistance is at 18265 and which coincides with the unfilled gap that exists at 18274 to 18509, and it is also coinciding with 50% retracement level of the total fall. The trendline support is at 16894, which is coinciding with the 200 DMA which is at 16867. Thus 16867-16894 will act as a good support in a fall. The MACD is in the negative zone but has given a buy signal and the RSI has also given a buy signal from oversold zone. For the week ahead resistance is at 18274-18509-18925. The support is at 17571-17445-17141-16867.
NIFTY. Nifty opened the week at 5120, made a high of 5315, low of 4803 and closed the week at 5302, thus registering a weekly gain of 182 points. The indicators are suggesting more upside. The trendline support for the Nifty is at 4941 and 4592. If the support is 4941 is broken then that may lead to a retest of the long term support for over three years, which is currently placed at 4592. Thus it is important that the Nifty should not fall below 4941, for the short term uptrend to be intact. Keep stoploss of 4941 for all your long trades. The rally will gain strength only if the Nifty closes above 5700 and Sensex above 19140. Till then all upward rallies will be termed as pull back rallies only. Selling will be visible at higher levels. Nifty futures closed at 5291 with discount reducing to 11 points, due to short covering by the FII’s on Thursday and Friday. Lot of Put writing is visible at the strikes of 5100 and 5000, which will act as a support in a downfall. For the week ahead, resistance is at 5403-5485-5545-5623. Support is at 5174-5086-4980-4941.
HOW TO TRADE?
This week one can buy Siemens 1563 for a target of 1679-1735 and hedge it with Nifty futures.
LAST WEEKS RECOMMENDATIONS:
Once again we were on the mark for all except Shyam Tele and Hero Honda missed by a whisker.
SUN PHARMA @ 1119 TGT 1150, REACHED 1150.
ABB @ 1284 TGT 1339, REACHED 1365.
TULIP IT @ 976 TGT 999, REACHED 1035.
HERO HONDA @ 707 TGT 749, REACHED 740.
REI AGRO @ 1153 TGT 1196, REACHED 1228.
THIS WEEKS RECOMMENDATIONS:
ADLABS 925 SL 875 TGT 974-1019.
ABB 1352 SL 1311 TGT 1402-1444.
SIEMENS 1563 SL 1525 TGT 1594-1679-1735.
J.P.ASSOCIATES 286 SL 273 TGT 317-332.
GMR INFRA 171 SL 167 TGT 181-189.
PUNJ LLOYD 378 SL 368 TGT 404-417.
JSW STEEL 1187 SL 1141 TGT 1242-1278.
IVRCL 438 SL 422 TGT 451-466.