Archives : BULL EMERGE WINNERS IN A VOLATILE WEEK. 02/11/2007
BULLS EMERGE WINNERS IN A VOLATILE WEEK.02/11/2007
Last we had said that the Sensex was headed towards 20000 and Nifty towards 6000. It did this great style. Week after week our targets for the market have been spot on. I pray for all my readers to get over the volatile times and make money. That is the reason we take lot of efforts in giving market levels and weekly recommendations. Every ounce of our hardwork is worth its weight in gold, if our readers are benefited.
SENSEX CLIMBS 20000 AND NIFTY 6000.
Sensex and Nifty both reached important psychological levels of 20000 and 6000 respectively. The usual suspects, the Reliance group and aided by the capital goods stocks L&T and Bhel, were the chief architect in making the index conquer such lofty levels. The more higher we move, the base rises and for the Sensex to gain 1000 points is just a matter of 5%. So now we should be ready to digest such high volatily during the day. Now the Sensex and Nifty if they close above 20238 and 6011, then possibly we can look forward to the target of 22322 and 6656. This is a journey and the targets are not the destinations, but like stations where the express train will halt for a break. So please don’t doubt this golden bull run, but participate in it and make wealth over a period of time.
DR.REDDY INCREASES CRR, BERNAKE REDUCES INTEREST RATE.
RBI in its credit policy increased the CRR in its bid to control the dollar inflows. The CRR hike is not a signal that the interest rates may harden, but it was meant to suck out some liquidity from the system. India is now an asset class that no funds or big investors across the globe can afford to miss out. Hence such huge dollar inflows. On the other hand, in the US, the economy is in recession and the 25 bps interest rate cut announced by the Fed was like giving a kiss of life to the already almost dying economy. Be sure the world has chosen, China and India, as its two growth engines now and are betting on it. Hence we see such huge inflows in our economy. Please note that the liquidity tap will continue as long as India continues its 9% plus growth rate.
RPL & RNRL THE NEW DARLINGS OF THE MARKET.
Nobody is able to get enough of this two stocks. These have become the punter’s favourite and they clock record turnover day in and day out. Something is definitely cooking in both the stocks. RPL bounced from 159 levels last week and reached 294, a gain of almost 90%. While RNRL rallied from 81 odd levels and reached a high of 149, almost a gain of 85%. And the rally will not stop here, as it is expected to continue its unabashed, unmatched bull run. Some theories doing the round are Chevron picking up 29% stake at a hefty premium of 15% over the prevailing market price. Another surprise could be the refinery may start its operation as early as this March, beating everyone’s estimate. Also the crude prices are helping the matter as it is now hovering near the three digit mark. Some rumour has it that there may be some form of settlement, regarding the gas price, has been agreed between the Ambani bros and which will help increase the price of RNRL to levels unheard or imagined. Watchout for this two stocks.
Sensex opened the week at 19621, made a high of 20238, low of 19255 and closed the week at 19976. Weekly gain for the Sensex was 733 points. The Sensex underwent a correction on Friday and went to a low of 19255 and recovered lost ground during the course of the day to register handsome gains. In the process Sensex filled the gap left behind between 19276 to 19621. Sensex if it crosses and closes above its previous high of 20238, then we can expect it to reach 21220-22322. The 50DMA is placed at 17248 which is near the 2 week low registered at 17171. The long term uptrend will remain intact as long as this level is not broken. Please note that the MACD has given a fresh buy signal, so watch out. The trendline support for the Sensex is at 19754-19335-18469. For the week ahead the resistance is at 20504-21220-21238. Support will be at 19679-19446-19255-18705.
Nifty opened the week at 5708, made a high 6011, made a low of 5708 and closed the week at 5932. Weekly gain registered was 230 points. The MACD is giving a fresh buy signal. The Nifty OI PCR is at 1.18, indicating lack of hedged positions. Nifty futures turned into a premium of 22 points. Nifty resistance for the week is at 6090-6307-6409. Support is at 5778-5708-5541-5332.
HOW TO TRADE?
This week we suggest a bull call spread for NTPC 234. It has a target of 253-267. One can also go for an ATM Call for Petronet LNG 89 for a target of 106-115. Please hedge your positions don’t keep naked open positions.
LAST WEEK’S RECOMMENDATIONS:Once again 100% success…fantastic. !!!
JINDAL STEEL 8364 REACHED 13847 !!!!!
BHEL 2431 REACHED 2750.
BAJAJ HIND 189 REACHED 216.
RPL 202 REACHED 294 !!!!
TITAN 1680 REACHED 1789.
MCDOWELL 1891 REACHED 2189.
BHARAT FORGE 336 REACHED 390.
WHAT MORE YOU WANT IN LIFE???
THIS WEEK’S DEEPWALI RECOMMENDATIONS:
RNRL 141 SL 133 TGT 152-175.
DENA BANK 72 SL 67 TGT 78-89.
JPHYDRO 82 SL 78 TGT 88-92-103.
PETRONET LNG 89 SL 85 TGT 97-106-115.
NTPC 234 SL 228 TGT 253-267-278.
BHEL 2720 SL 2606 TGT 2910-3050.