Archives : BEAR MARKET RALLY - 31/10/2008

BEAR MARKET RALLY – 31/10/2008. 

Is the bottom in place? 

The answer to the above question is an emphatic NO. The Bear market is not going to get over in a jiffy. There is more pain left to suffer. Probably we might form a bottom around 6300 levels, but the time the Bear market will probably take to complete, will be a long period. So in the near term, the current rally is nothing more than a mere technical pullback led by the global lowering of interest rates. This will only provide some rest for the Bears before they swing back to action.

INFLATION BELOW 11%, MORE RATE CUTS.

SENSEX.

NIFTY.

LAST WEEK’S RECOMMEDATIONS:

OUTSTANDING…..in one word. Once again most of our stocks just blazed through and reached their targets. Just go through the percentage falls and you will understand how much our readers must have made. Just check this out Tata Power fell by 16%, Sterling Bio by 5%, Hero Honda by 9%, and VSNL by 12%. Only Tata Chem and Maruti just fell short of the target but were still down by more than 8% and 12% resp. !!!

  • Sell Tata Power 629 Tgt was 581 REACHED 530.
  • Sell Tata Chem 128 Tgt was 113 REACHED 118.
  • Sell Sterling Biotech 163 Tgt was 157 REACHED 155.
  • Sell Hero Honda 728 Tgt was 680 REACHED 661.
  • Sell VSNL 365 Tgt was 340 REACHED 323.
  • Sell Maruti 538 Tgt was 458 REACHED 475.

If one had sold 500 shares of Tata Power, Hero Honda, Maruti, VSNL and 2000 shares of Tata Chem, Sterling Biotech then one could have earned a whopping profit of nothing less than Rs. 1,71,500/- !!!

THIS WEEK’S RECOMMENDATIONS:

WATCH OUT FOR:

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BEAR MARKET RALLY – 31/10/2008.

Is the bottom in place?

The answer to the above question is an emphatic NO. The Bear market is not going to get over in a jiffy. There is more pain left to suffer. Probably we might form a bottom around 6300 levels, but the time the Bear market will probably take to complete, will be a long period. So in the near term, the current rally is nothing more than a mere technical pullback led by the global lowering of interest rates. This will only provide some rest for the Bears before they swing back to action.

INFLATION BELOW 11%, MORE RATE CUTS. 

Inflation for the week ended Oct.18th came in at 10.68%. For the first time in over four months the inflation rate fell below 11%.This has raised hopes of a fresh cut in key interest rates by the RBI to boost liquidity and reduce borrowing costs for embattled industry fighting a global slowdown.

SENSEX. 

Sensex opened the week at 8599, made a high of 9870, made a low of 7697, and closed the week at 9788, thus registering a weekly gain of 1087 points.  The indicators were extremely oversold and suggested some sort of technical pullback from lower levels and it did after nearly achieving the Head & Shoulders Pattern target of the Sensex at 7427. The Sensex bounced after reaching 7697. It went up by almost 2091 points from the low of 7697.  The Trendline Support is at 9472-9327 and the Trendline Resistance is at 10325-11817.The Sensex is correcting the fall from 15579 to 7697 and the correction levels are placed at 10708-11638-12568. 

For the week ahead the Resistance is at 9952-10239-10750-11405. Support is at 9618-9459-9327-8739. 

NIFTY.

Nifty opened the week at 2583, made a high of 2921, low of 2252, and closed the week at 2885.The weekly gain was 301 points. The Nifty suggested a Technical Head & Shoulders Breakout and a possible target of 2275 and the Nifty did achieve that as it reached 2252 before bouncing back.  The Trendline Support is at 2753 and the Trendline Resistance is at 2985-3641.The Nifty is correcting the fall from 4649 to 2252 and the correction levels are placed at 3168-3451-3783. The OI PCR is a little bit more respectable at 1.07 than previous week. Last week, it was extremely oversold at 0.66 and hence we suggested that the markets could see a bounce back. Just check out how the Sensex & Nifty bounced by more than 2000 and 600 points respectively from the lows made during the week. Call writing is seen at the strikes of 3000, 3100 and 3200. These levels will provide the Resistances going forward. Good Put writing is visible at the strikes of 2800, 2700 and 2600. These levels will provide support during a fall.  

For the week ahead, the Resistance is at 2996-3046-3111-3168-3254. Support is at 2834-2778-2753-2507. 

LAST WEEK’S RECOMMEDATIONS: 

OUTSTANDING…..in one word. Once again most of our stocks just blazed through and reached their targets. Just go through the percentage falls and you will understand how much our readers must have made. Just check this out Tata Power fell by 16%, Sterling Bio by 5%, Hero Honda by 9%, and VSNL by 12%. Only Tata Chem and Maruti just fell short of the target but were still down by more than 8% and 12% resp. !!!

  • Sell Tata Power 629 Tgt was 581 REACHED 530.
  • Sell Tata Chem 128 Tgt was 113 REACHED 118.
  • Sell Sterling Biotech 163 Tgt was 157 REACHED 155.
  • Sell Hero Honda 728 Tgt was 680 REACHED 661.
  • Sell VSNL 365 Tgt was 340 REACHED 323.
  • Sell Maruti 538 Tgt was 458 REACHED 475.
  • If one had sold 500 shares of Tata Power, Hero Honda, Maruti, VSNL and 2000 shares of Tata Chem, Sterling Biotech then one could have earned a whopping profit of nothing less than Rs. 1,71,500/- !!!

    THIS WEEK’S RECOMMENDATIONS: 

    Buy I-Flex 607 SL 589 Tgt 633-691-780.

    Buy Tata Steel 209 SL 200 Tgt 219-235-243.

    Buy Jindal Steel 792 SL 771 Tgt 830-990.

    Buy Rel Cap 652 SL 620 Tgt 725-772.

    Buy Walchand Nagar 122 SL 117 Tgt 138-148.

    Buy Punj Lloyd 174 SL 165 Tgt 189-195-211.

    Buy Polaris 44 SL 42 Tgt 49-54.

    Buy HCC 41 SL 38 Tgt 45-49.

    WATCH OUT FOR: 

    SATYAM COMP 304, has given a Bullish Head & Shoulders Breakout. Keep SL of 282 for a Target of 323-344-360.

    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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