Archives : BACK TO BEARISHNESS - 11/07/2008

BACK TO BEARISHNESS - 11/07/2008.  

Market closed the week in poor shape as the IIP numbers took a toll on the small rally that had begun last week. Market had been going up since the past week, inspite of the Political uncertainty. Finally the Bulls were proved to be weak once again, as Bears wrested the initiative away from the Bulls. The market once again went into negative territory and reversed the short term direction. On Friday, both Sensex and Nifty registered a Bearish Engulfing candle. This indicates further weakness in the market. Over to the Bears once again.  

FRIDAY HORROR SHOW.

SENSEX.

NIFTY.

HOW TO TRADE?

LAST WEEK S RECOMMENDATIONS:

Inspite of the volatility prevailing in the last week, all our recommendations once again reached the targets. SSSSSSSSupperb… Need we say more.

I-Flex @ at 1511 Tgt was 1545 Reached 1563.

REL @ 771 Tgt was 871 Reached 879.

DCB @ 52 Tgt was 57 Reached 58.50.

Orchid Chem @ 256 Tgt was 270 Reached 270.

Adlabs @ 380 Tgt was 432 Reached 469.

HDFC @ 2057 Tgt was 2137 Reached 2164.

Nagarjuna Const @ 125 Tgt was 143 Reached 148.  

THIS WEEK S RECOMMENDATIONS:

  

READY TO TUMBLE:

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BACK TO BEARISHNESS - 11/07/2008.  

Market closed the week in poor shape as the IIP numbers took a toll on the small rally that had begun last week. Market had been going up since the past week, inspite of the Political uncertainty. Finally the Bulls were proved to be weak once again, as Bears wrested the initiative away from the Bulls. The market once again went into negative territory and reversed the short term direction. On Friday, both Sensex and Nifty registered a Bearish Engulfing candle. This indicates further weakness in the market. Over to the Bears once again.   

FRIDAY HORROR SHOW.

 

Friday was very heavy data day beginning with the Infosys results, followed by the dreaded Inflation figure and finally the IIP numbers. The Infosys results were above expectation and the guidance was upped in Rupee terms, but remained unchanged in Dollar terms. Inflation figure was next in line and it came in below 12 and the market breathed a sigh of relief and started moving up. But that was short lived as the IIP numbers were too disappointing at 3.8%, to say the least. As a result the market started tumbling and was breaking support levels with ease. The carnage was visible in Capital goods and IT stocks. 

 

SENSEX.

Sensex opened the week at 13561, made a high of 14066, made a low of 13049 and closed the week at 13469. The weekly gain was 15 points. It was the first weekly gain after more than 7 weeks of continuous loss. The Sensex formed a Doji formation on the weekly chart. On the daily charts, Sensex made a Bearish Engulfing pattern, which will have negative implications in the short term. The ROC was moving up but rebounded after touching the zero line and is now again moving southwards, indicating further increase in Bearish Momentum, starting next week. If the recent low of 12822 on the Sensex is broken then Sensex may well go on to test 12055.The Trendline Resistance is at 13642-13958-14382. The Trendline Support is at 13289. Selling pressure will be visible at every higher level. For the week ahead, Resistance will be at 13642-13887-14066-14382. Support will be at 13289-13049-12822-12400.  

NIFTY.

Nifty opened the week at 4002, made a high of 4215, low of 3896 and closed the week at 4049. Weekly gain for the Nifty was 33 points. It was the first weekly gain after seven weeks of continuous loss. The Nifty has formed a Bearish Engulfing candle on the daily chart. This suggests further Bearishness in the short term. If the recent low of 3848 is broken, then the Nifty will head towards 3630.The interesting aspect on Friday during the sell-off was the Nifty future discount which reduced from 42 to 21. It indicates that the market is surviving on the edge. Lot of Call writing was visible at the strikes of 4200 and 4300. These levels will act as Resistance going forward. The Trendline Resistance is at 4185-4306. The Trendline Support is at 3944. For the week ahead, Resistance will be at 4185-4215-4326. Support will be at 3944-3896-3848-3630.    

HOW TO TRADE?

The market will be very volatile. So Hedge all your positions. Infosys is looking weak. Construct a Bear Spread for Infosys.   

LAST WEEK S RECOMMENDATIONS:

Inspite of the volatility prevailing in the last week, all our recommendations once again reached the targets. SSSSSSSSupperb… Need we say more.

I-Flex @ at 1511 Tgt was 1545 Reached 1563.

REL @ 771 Tgt was 871 Reached 879.

DCB @ 52 Tgt was 57 Reached 58.50.

Orchid Chem @ 256 Tgt was 270 Reached 270.

Adlabs @ 380 Tgt was 432 Reached 469.

HDFC @ 2057 Tgt was 2137 Reached 2164.

Nagarjuna Const @ 125 Tgt was 143 Reached 148.   

THIS WEEK S RECOMMENDATIONS:

 

SELL INFOSYS 1676 SL 1775 TGT 1531-1484.

SELL HDFC 1998 SL 2045 TGT 1942-1913-1838.

SELL ICICI 591 SL 608 TGT 570-554.

SELL RELIANCE 2016 SL 2057 TGT 1956-1918.

SELL TATA POWER 973 SL 1020 TGT 931-903-850.

SELL TATA STEEL 666 SL 680 TGT 638-626.   

READY TO TUMBLE:   

1. SELL Infosys 1676, has given Bearish Head & Shoulder Breakout.           

Go Short with SL 1775 for Target 1531-1484-1413.

 

 2. Sell Tata Power 975, has already given a Bearish Head & Shoulder Breakout.

Pennant Breakout suggests continuation of Down Trend.                           

Go Short with SL 1020 for Target 903-850-785.  

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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