Archives : BULLISH HAMMER - 18/07/2008
BULLISH HAMMER – 18/07/2008.

 

Our market rallied on the back of good US market cues and the crude too fell from $148/bbl to 128/bbl, which was a substantial fall of more than 15% from the top. So at least for the first time there is a ray of hope on the crude front, inflation has not surprised on the way up and there has been no shockers from the earnings front. All this factors made the market rally after making new lows for both the Sensex and the Nifty. Both the indices have formed Bullish Reversal pattern in the form of a Hammer. May be the market is trying to give some bounce back, but any rally forward won’t be without its dose of volatility.

 
  • US MARKET HELPS FUEL RALLY.
  • INFLATION NOT A DETERRENT THIS TIME.
  • POLITICAL GAME NEXT WEEK.
  • SENSEX.
  • NIFTY.
  • HOW TO TRADE?
  • LAST WEEK’S RECOMMENDATIONS:
  • Once again we hit BULL’S EYE. All our readers must have made handsome profits. If one had SOLD/SHORTED 200 shares of Infosys, HDFC, RIL, TATA Power and 500 shares of ICICI and Tata Steel, then one could have earned a Profit of 1,95,800. KEWL isn’t it.
  1. SELL INFOSYS 1676 TGT WAS 1531 REACHED 1503.
  2. SELL HDFC 1998 TGT WAS 1838 REACHED 1755.
  3. SELL ICICI 591 TGT WAS 554 REACHED 514.
  4. SELL RIL 2016 TGT WAS 1956 REACHED 1920.
  5. SELL TATA POWER 973 TGT WAS 931 REACHED 911.
  6. SELL TATA STEEL 666 TGT WAS 626 REAHCED 581.
  • THIS WEEK’S RECOMMENDATIONS:
  • WATCH OUT FOR:
  • TO READ FULL ARTICLE CLICK MORE
    

BULLISH HAMMER – 18/07/2008. 

Our market rallied on the back of good US market cues and the crude too fell from $148/bbl to 128/bbl, which was a substantial fall of more than 15% from the top. So at least for the first time there is a ray of hope on the crude front, inflation has not surprised on the way up and there has been no shockers from the earnings front. All this factors made the market rally after making new lows for both the Sensex and the Nifty. Both the indices have formed Bullish Reversal pattern in the form of a Hammer. May be the market is trying to give some bounce back, but any rally forward won’t be without its dose of volatility. 

US MARKET HELPS FUEL RALLY. 

The market turned around after Thursday and started moving up based on good U.S. cues. The U.S. market went into a slump following the announcement of Freddie and Fannie going through financial trouble. Immediately the FED made a statement to rescue the already plunging US market. This in turn forced the global markets to rally and which gave the Indian Market much needed impetus to stop the freefall and start a pull back rally.

 INFLATION NOT A DETERRENT THIS TIME.

For the first time the Inflation figure was announced on Thursday evening instead of the usual Friday noon. This step means that every Friday’s dose of volatility will be missing as the inflation will be announced after the market closes on Thursday. Market seemed to have a whiff of the inflation figure coming in at lesser than 12%, so the market rallied more than 500 points on Thursday itself and to press home further advantage the market rallied more than 500 points on Friday too. The annual Wholesale Price Index-based inflation moved up to 11.91% for the week ended July 5th, with a slowdown in the primary articles inflation ensuring that the rise was only marginally higher than the 11.89% reported for the previous week. The market reacted positively and jumped by 500 points on Friday, thus consolidating the gains registered on Thursday. Lower inflation figure helped Banking, Financial, Real Estate, Infrastructure & Auto stocks to gain on the back of lower than expected inflation numbers.

 POLITICAL GAME NEXT WEEK.

Again as you get into the next week, there would be lot of news flow coming in on what will happen with the vote of confidence. On Tuesday, the suspense will be over and at that point I think the market will get a sense of further direction. 

SENSEX.

The Sensex opened the week at 13360, made a high of 13684, low of 12514 and closed the week at 13635. The net weekly gain was 166 points. The weekly candlestick chart of Sensex shows a Bullish Reversal Pattern in the form of a Hammer. It has been seen that whatever bottom that has been formed, has held that support and a possible new rally starts from there. It may be no different this time, provided the bottom of 12514 is not broken.

The Indicators are suggesting momentum. The ROC has turned positive and is already hitting the trendline resistance, but is still in the positive half. When this trendline is broken the market will get into a strong momentum mode and it will rally from there on.  The MACD has also given a BUY signal.

The Trendline Resistances are at 14052-14627-15184. If you see the level of 14052 is coinciding with the previous week’s high, which is also the 30DMA and the previous week’s high. Chances are, the level of 14093 will provide strong resistance and the rally will go further only if this level is decisively broken.

For the week ahead, Resistance is at 14052-14449-14645. Support is at 13049-12822-12514.

 NIFTY.

Nifty opened the week at 4047, made a high of 4118, low of 3790 and closed the week at 4092, thus registering a gain of 43 points. On the weekly charts the Nifty has formed a Bullish reversal pattern in the form of Hammer. The indicators are suggesting momentum going forward. The main resistance will be at 4215, which is the previous rally’s top and also the 30DMA. The Trendline Resistances are at 4153-4215-4369.

The Nifty OI PCR is at 1.20, which is quite okay. Lot of Put writing is visible at the strikes of 3800 and 4000 levels, which are expected to provide support to the market.

For the week ahead, Resistance is at 4153-4215-4369. Support is at 4009-3896-3848. 

HOW TO TRADE?

It is suggested to form a BULL SPREAD for NTPC.  Or one can use protective Put Strategy for NTPC.

 LAST WEEK’S RECOMMENDATIONS:

Once again we hit BULL’S EYE. All our readers must have made handsome profits. If one had SOLD/SHORTED 200 shares of Infosys, HDFC, RIL, TATA Power and 500 shares of ICICI and Tata Steel, then one could have earned a Profit of 1,95,800. KEWL isn’t it.

SELL INFOSYS 1676 TGT WAS 1531 REACHED 1503.

SELL HDFC 1998 TGT WAS 1838 REACHED 1755.

SELL ICICI 591 TGT WAS 554 REACHED 514.

SELL RIL 2016 TGT WAS 1956 REACHED 1920.

SELL TATA POWER 973 TGT WAS 931 REACHED 911.

SELL TATA STEEL 666 TGT WAS 626 REAHCED 581. 

THIS WEEK’S RECOMMENDATIONS:

BUY NTPC 173 SL 168 TGT 178-182-193.

BUY NALCO 357 SL 332 TGT 377-398.

BUY HCC 85 SL 83 TGT 90-94.

BUY REL 858 SL 840 TGT 873-892.

BUY L&T 2547 SL 2476 TGT 2610-2662. 

WATCH OUT FOR:

NTPC 173, HAS GIVEN A DIAMOND BREAKOUT, BUY WITH A TARGET OF 182-193, KEEP SL OF 168. 

  
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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