Archives : MISSED OPPORTUNITY - 16/03/2012.

MISSED OPPORTUNITY – 16/03/2012.

FAILED TO DELIVER.

There were great expectations as far as the Budget was concerned. But once again the FM missed the opportunity to give a solid Budget. There was no clear roadmap on implementing GST and DTC; neither was there any attempt to revive the Investment cycle. There was no pointer or talk about Diesel deregulation. Fiscal deficit has been targeted at a realistic 5.1%, which is a positive, but without giving fiscal discipline roadmap. Change in Taxation slabs and exemption limits is not going to result in lot of money being saved by the consumer. Thus the Budget promised a lot but failed to deliver.

 


MISSED OPPORTUNITY – 16/03/2012.

FAILED TO DELIVER.

There were great expectations as far as the Budget was concerned. But once again the FM missed the opportunity to give a solid Budget. There was no clear roadmap on implementing GST and DTC; neither was there any attempt to revive the Investment cycle. There was no pointer or talk about Diesel deregulation. Fiscal deficit has been targeted at a realistic 5.1%, which is a positive, but without giving fiscal discipline roadmap. Change in Taxation slabs and exemption limits is not going to result in lot of money being saved by the consumer. Thus the Budget promised a lot but failed to deliver.

TECHNICALLY SPEAKING. 

Sensex opened the week at 17772, made a high of 18040, low of 17426 and closed the week at 17466. Thus it registered a weekly loss of 37 points. At the same time the Nifty opened the week at 5420, made a high of 5499, low of 5305 and closed the week at 5317. Thus the Nifty fell by 16 points on a weekly basis.

Both Sensex and Nifty required a Bullish white body formation on the weekly charts but the failure to do so, has resulted in the continuation of the downtrend. Both the indices have formed a big Black body candle with a long upper shadow on the weekly charts. The long upper shadow indicates selling pressure at higher levels. A similar bearish formation has been registered on the daily charts on Friday, a big black body candle with a long upper shadow. Last three days have formed black body candles but that does not fit the criteria for Three Black Crows formation. Hence both daily and weekly candlestick analysis suggests bearishness in the short term.

Both the indices continue to remain below the short term average of 20dma (Sensex – 17715 and Nifty – 5384) and as a result the short term trend remains Bearish. But both the indices are still above the crucial level of 200dma (Sensex – 17154 and Nifty – 5162) and also above their medium term average of 50dma (Sensex – 17278 and Nifty – 5231). As a result, the trend in the Short term timeframe continues to be Bearish but the trend in the Medium term timeframe and Long term timeframe continue to be Bullish.

Last week both the indices left behind a Bullish Gap while moving upwards. That Bullish Upward Gap from 17239 to 17325 for the Sensex and 5243 to 5291 for the Nifty will act as strong support.

If the market breaches the intermediate bottom which is at Sensex 17008 and Nifty 5171, the correction will resume. The market will once again correct the entire rise from Sensex 15135 to 18523 and Nifty from 4531 to 5629 and the Correction levels will be 17229-16829-16429 for the Sensex and 5210-5080-4950 for the Nifty.

The market corrected exactly upto the level of the Falling Channel Top which acted as a Support. As is the case many times, the market after a strong breakout came back to retest the breakout level and in the process formed a higher bottom. The overall bullish target for Falling Channel pattern breakout remains intact. The targets as per this formation are Sensex 20383 and Nifty 6148.

A strong support is likely to emerge between Sensex 17154 – 17008 and Nifty 5171-5153 which is a result of confluence of immediate current bottom, critical level of 200dma and the Falling Channel Top.

MACD and ROC continue with their Sell signals for this week too, but MACD is still in positive territory, while ROC is in negative zone. RSI has just moved below the equilibrium line to 47, giving a Sell signal. Stochastic Oscillator (%K) is at 64 and has given a fresh Sell signal as %K has moved below %D. ADX has now reduced further to 22 suggesting that the uptrend has lost lot of its strength. Directional Indicators have given a fresh Sell signal as +DI has just gone below –DI. MFI has moved higher above the centerline signaling a Buy. OBV is in Sell mode and has made a lower top formation.

Nifty O.I. PCR has reduced to a level of 1.11. Highest open interest buildup is still seen at 5200 Put. Even though 5200 Put has seen some winding up of positions but OI buildup still suggests strong support at that level. High Call writing is seen at the strike of 5600 followed by 5500. The trading range for the market is likely to be 5200 on the lower side and 5500 on the higher side in the days to come. 

Trendline Resistance for the Sensex is at 17929. The Trendline Support is at 17056.

Trendline Resistance for the Nifty is at 5472. The Trendline Support falls at 5197.

For the week ahead, Sensex will find Support at 17145-16828-16517 and will find Resistance at 17832-18182-18523.

For the week ahead, Nifty will find Support at 5201-5076-4965 and will find Resistance at 5428-5542-5653.

INDEX LEVELS: 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

4965

5076

5201

5317

5428

5542

5653

Sensex

16517

16828

17145

17466

17832

18182

18523

LAST WEEKS RECOMMENDATIONS:

Almost all the recommendations reached their targets with the exception of Cairn India. The Star Performer for the last week was Central Bank which went up by almost 10%!!! 

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy Cairn

375

384

381

1000

Rs. 6,000

Buy Polaris

169

176

176

2000

Rs. 14,000

Buy IDBI

111

115

116

2000

Rs. 10,000

Buy Opto

271

281

285

1000

Rs. 14,000

CentralBk

102

111

112

2000

Rs.20,000

Total

Rs. 64,000

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Sell ReLCap

400

406

390

379

Sell DivisLab

725

732

712

698

Sell RCom

92

94

89

85

Sell OBC

278

282

271

263

Sell Arvind

83

85

80

76

WATCH OUT FOR:

RCOM Diamond

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.

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