Archives : MELTDOWN CONTINUES - 26/09/2008
MELTDOWN CONTINUES – 26/09/2008. 

Once again the market was menacing and dreadful as the Sensex plunged by 940 points on a week to week basis. In the process, the small upmove which had started a week back has ended. The market once again plunged in the wake of postponement of the clearing of the Nuclear deal. The market has once again started its down move and is headed lower. The Sensex and Nifty have registered a Bearish Engulfing Pattern in the Weekly charts.

If the Sensex and Nifty Breaks its previous double bottom then the chances are we may well be on the way to test Nifty 3677-3272 and Sensex 12177-10740.

 
  •  INFLATION:
  • ROLLOVER ANALYSIS:
  • SENSEX.
  • NIFTY.
  • LAST WEEK’S RECOMMEDATIONS:
  • THIS WEEKS RECOMMEDATIONS:


MELTDOWN CONTINUES – 26/09/2008. 

Once again the market was menacing and dreadful as the Sensex plunged by 940 points on a week to week basis. In the process, the small upmove which had started a week back has ended. The market once again plunged in the wake of postponement of the clearing of the Nuclear deal. The market has once again started its down move and is headed lower. The Sensex and Nifty have registered a Bearish Engulfing Pattern in the Weekly charts. If the Sensex and Nifty Breaks its previous double bottom then the chances are we may well be on the way to test Nifty 3677-3272 and Sensex 12177-10740.  

INFLATION:

Inflation for the week ended September 14th 2008, came in unchanged at 12.14%. Thus the year-on-year and week-on-week inflation remains flat. One positive aspect that we can draw from here is that finally inflation is showing signs of tiring out. A big positive is that the Manufacturing index, which has 64% weightage in the index fell by 0.5%. This is the first time in 4 months it has shown a decline. Going forward we can expect inflation to cool down further.

Considering, the global financial crisis and the liquidity crunch prevailing in the global markets, it is unlikely that the RBI will opt for a rate hike. “No Action Stance” from the RBI, which is what the market desires, will signal an end of Interest Rate hardening era in our markets.

 
ROLLOVER ANALYSIS:

It was a tepid expiry as the nifty October future closed at a hefty premium of 40 points. The nifty rollover was 63% v/s 75% in the last expiry. Even the overall market wide roll over was lower at 76% v/s 83% last month. The low roll over on low base means the market is very lite and can take any direction very easily.

A low roll over was seen in most of frontline stocks like Reliance and ONGC. Interestingly side stocks like India cement and PSU banks like IDBI, Vijaya bank and UBI witnessed a strong roll over above 90%. Stocks like BPCL and Bharti witnessed very low roll over.

 

  

SENSEX.

Sensex opened the week at 14215 made a high of 14221, made a low of 13054and closed the week at 13102, thus registering a weekly loss of 940 points. The Sensex recorded a Black Marubuzo in the daily and the weekly charts. The Sensex has also managed to form a Bearish Engulfing pattern in the weekly charts. The weekly ROC and the weekly MACD too have reversed their signal of the previous week and has again given a Sell Signal. The signal given in the last week has proved to be a false signal. There is Bearish Crossover of Moving Averages again signaling a Sell.The Trendline Resistance is at 14835-15431-15790. The Trendline Support is at 13019-12565. The support at 12565 assumes significance as there is a double bottom prevailing in that area.

For the week ahead the Resistance is at 13486-13779-13978-14221. Support is at 13019-12565-12179. 

NIFTY.

Nifty opened the week at 4248, made a high of 4303, low of 3970 and closed the week at 3985. The weekly loss was 260 points. The Nifty has recovered a Bearish Engulfing pattern in the weekly charts and a Black Marubuzo on the daily charts. The Nifty has managed a weekly close below 4000 for the first time since April last year. The OI PCR was at 1.01 and is suggesting further weakness, Lot of Call writing is seen at the Nifty strikes of 4200, 4300 and 4400. These levels will be difficult to cross. The Trendline Resistance is at 4159-4245. The Trendline Support is at 3943-3883-3801-3677.

For the week ahead, the Resistance is at 4159-4227-4303. Support is at 3943-3801-3677.  

LAST WEEK’S RECOMMEDATIONS:

Last week inspite of the extremely volatile market conditions, the performance was average as only two stocks viz. Akruti and Reliance reached target. The other recommendations were strictly average.
  • BUY AKRUTI 907 TGT 965 Reached 1079.
  • BUY RELIANCE 2055 TGT 2105 Reached 2110.
  • BUY SBI 1565 TGT 1675 Reached 1595.
  • BUY BOB 323 TGT 338 Reached 328.
  • BUY ABAN 2464 TGT 2542 Reached 2507.
  • BUY HDIL 224 TGT 253 Reached 234.
  

THIS WEEKS RECOMMEDATIONS:

 
  • SELL ABB 823 SL 831 TGT 781-765-743.
  • SELL EDUCOMP 3314 SL 3380 TGT 3231-3185-3120.
  • SELL TATA STEEL 461 SL 474 TGT 438-422.
  • SELL APTECH 149 SL 156 TGT 141-133-107.
  • SELL BHARTI 776 SL 801 TGT 758-735.
  • SELL REL CAP 1173 SL 1205 TGT 1136-967.
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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