Archives : HEAD & SHOULDERS BREAKOUT. - 08/08/2008
HEAD & SHOULDERS BREAKOUT. – 08/08/2008.

Market is on a Roll. It is typically behaving in copy book fashion. Both Sensex and Nifty gave Inverted Head & Shoulders Breakout, they went up and again came back to kiss the neckline and moved up immediately on Friday. Once again our analysis was spot on and as usual we were standing like a light house in the sea of uncertainty, only to guide our readers in the right direction.

 

If one has sound knowledge of Technical Analysis, then one should have used the dips, which came on Wednesday, Thursday and Friday as good buying opportunities. But alas, there are lesser mortals who misguide and scare the people. One thing I would like to bring to notice to our readers is that don’t get misled by any rumours. These rumours keeps on surfacing in a Bear market and especially when there is a strong sharp Bear rally and people who have burned their fingers previously while buying are skeptical about the sustainability of the rally and believe the rumours and make losses again.

 
  • CRUDE & INFLATION.
  • SENSEX.
  • NIFTY.
  •  HOW TO TRADE?
  • LAST WEEK’S RECOMMENDATIONS:

Once again we were on the mark as all our recommendations hit their targets. As usual the strike rate still remains a BORING and NON-VOLATILE 100%. Success is assured for our followers. Please check below,

 
  • Sesa Goa @ 3483 Tgt 3557 Reached 3620.
  • MRPL @ 69 Tgt 75 Reached 78.
  • Nag Fert @ 40 Tgt 43.50 Reached 43.50.
  • RNRL @ 101 Tgt 106 Reached 108.
  • Tata Chem @ 330 Tgt 347 Reached 350.

If one would have purchased 100 shares of Sesa Goa, 5000 of MRPL and Nag Fert each, 3000 of RNRL and 500 of Tata Chem, then one could have earned a profit of Rs 1,07,200 in just a week !!!  
  • THIS WEEK’S RECOMMENDATIONS:
  • THIS WEEK’S CASH RECOMMENDATIONS:
  • WATCH OUT FOR:

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HEAD & SHOULDERS BREAKOUT. – 08/08/2008.

Market is on a Roll. It is typically behaving in copy book fashion. Both Sensex and Nifty gave Inverted Head & Shoulders Breakout, they went up and again came back to kiss the neckline and moved up immediately on Friday. Once again our analysis was spot on and as usual we were standing like a light house in the sea of uncertainty, only to guide our readers in the right direction.

 

If one has sound knowledge of Technical Analysis, then one should have used the dips, which came on Wednesday, Thursday and Friday as good buying opportunities. But alas, there are lesser mortals who misguide and scare the people. One thing I would like to bring to notice to our readers is that don’t get misled by any rumours. These rumours keeps on surfacing in a Bear market and especially when there is a strong sharp Bear rally and people who have burned their fingers previously while buying are skeptical about the sustainability of the rally and believe the rumours and make losses again.

 CRUDE & INFLATION.

Crude and Inflation sounds so cliché but now both the spoil sports are now declining. This is assumed to be positive for the stock market. Crude has almost plunged to a low of $115 from a high of nearly $148. Inflation too came in at a meek 12.01% v/s 11.98% last week, though higher, but the rise has become too slow and the market seems to be pricing this scenario and rallying.

 SENSEX.

Sensex opened the week at 14594, made a high of 15422, low of 14725 and closed the week at 15167. The weekly gain was a brilliant 511 points. In the process, the Sensex has been able to maintain above the 50dma and is able to maintain the short term uptrend. This week Sensex has given a Bullish Inverted Head & Shoulders breakout and is now headed much higher. Probable targets are 15956-16498-16871. After giving the Breakout, the Sensex touched the 100dma and retraced somewhat from there just to kiss the neckline. The Sensex immediately bounced after kissing the neckline and managed to give a strong close on Friday.

The Sensex chart shows formation of a higher top and bottom formation. One thing is clear that the Sensex is now headed much higher and so any dips should be utilized as buying opportunities. Strong Trendline Support exists at 14836-14744, and strong Trendline Resistance exists at 15919-16350. If we consider the correction of this fall, from 21206 to 12514, then the retracement levels are placed at 15834-16860-17886.

For the week ahead, Sensex Resistance 15422-15789-15970. Support 14888-14725-14568. NIFTY.

Nifty opened the week at 4426, made a high of 4615, low of 4362 and closed the week at 4529, thus registering a gain of 116 points. Nifty too has managed to stay above the 50dma and exactly found resistance at 100dma which was at 4615. Nifty too gave an Inverted Head & Shoulder Breakout and probable targets are 4767-4919-5066. Strong Trendline Support exists at 4476-4442. Strong Trendline Resistance exists at 4994. If we consider the ongoing rally as a correction of the entire rise from 6357 to 5298, then the retracement levels are placed at 4770-5074-5377.

Nifty Futures ended 18 points in premium on Friday. Nifty Open Interest PCR is quite healthy 1.32. This shows presence of hedged positions. Huge Open Interest has been added at the strikes of 4700 and 4800. These levels will act as resistance. Lot of Put writing is witnessed at the strikes of 4500 and 4400. These levels will act as support.

For the week ahead, Nifty Resistance 4615-4679-4746-4919. Support 4464-4362-4310. 

 

  HOW TO TRADE?

Construct a Bull Spread for Nifty.

Buy L&T future and hedge by Nifty Futures.

  LAST WEEK’S RECOMMENDATIONS:

Once again we were on the mark as all our recommendations hit their targets. As usual the strike rate still remains a BORING and NON-VOLATILE 100%. Success is assured for our followers. Please check below,

 
  • Sesa Goa @ 3483 Tgt 3557 Reached 3620.
  • MRPL @ 69 Tgt 75 Reached 78.
  • Nag Fert @ 40 Tgt 43.50 Reached 43.50.
  • RNRL @ 101 Tgt 106 Reached 108.
  • Tata Chem @ 330 Tgt 347 Reached 350.

If one would have purchased 100 shares of Sesa Goa, 5000 of MRPL and Nag Fert each, 3000 of RNRL and 500 of Tata Chem, then one could have earned a profit of Rs 1,07,200 in just a week !!!  THIS WEEK’S RECOMMENDATIONS:
  • BUY SCI 239 SL 235 TGT 249-257.
  • BUY STERLITE 640 SL 630 TGT 658-670-691.
  • BUY DIVIS LAB 1511 SL 1484 TGT 1550-1573.
  • BUY APTECH 230 SL 221 TGT 238-247.
  • BUY L&T 2836 SL 2778 TGT 2957-2990-3039.
  THIS WEEK’S CASH RECOMMENDATIONS:

  • BUY ASIAN ELECT 102 SL 97 TGT 109-118-125.
  • BUY TORRENT POWER 114 SL 111 TGT 122-133-141.
  • BUY AFTEK 47 SL 45 TGT 50-54.
  • BUY ASHAPURA 136 SL 132 TGT 149-168.
  WATCH OUT FOR:

SCI has given strong Trendline Breakout accompanied by huge increase in volumes and has closed above the 200dma as well. Buy SCI 239 SL 234 Tgt 249-257.
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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