STILL TO CROSS…

In spite of the best efforts by the Bulls at the opening, taking cues from the global surge, failed to absorb the selling pressure. As posted earlier the Nifty failed to cross the 5371-75 levels but could hold the bottom intact that suits for Bulls.
The retail investors are no more enthusiastic to invest even though the stock prices are at mouth-watering levels. The smart money is entering but very selective to support the stocks like- SAIL, techs-Inosys, Satyam and the pharma pack Sun, Cipla, Ranbaxy, Biocon (these were already suggested-read earlier posts.)

Not a good sign but……

As posted earlier the markets opened higher on Monday and Tuesday but failed to hold the gains made last week, as a matter of fact Nifty touched a high of 5368 a level that is most important for the bulls. (..The markets likely to open high but has to close above 5365-71 to continue the efforts made by the bulls during the week long fight against the bears/global concerns….). The real damage has done to Nifty today when it failed to hold above 5200 but the ray of silver line hope lingering at the other end of the tunnel that it could cover the losses by the week end and stays above 5263 will become a good sign. The positive side of the Nifty is still above 5085 on closing basis but the frontline counters failed to cheer the bulls.

Incase RIL trades below 2350, ICICI below 1066, ONGC below 930, SBI below 2128 and SAIL below 204 (very crucial levels) then there a serious damage done to the Nifty and will correct sharply to 4000 levels. The markets may take longer period to revive than expected earlier. As of now, I think that the bulls are inviting bears to sell as much they could to trap them heavily before the good news known to every body.

The Retail Investors can avail the opportunity to eat more stock-food to fatten the kitty but shall not expose to swallow the bullet.

The closing is crucial….

The markets likely to open high but has to close above 5365-71 to continue the efforts made by the bulls during the week long fight against the bears/global concerns. The immediate resistance will come at 5471-85 level. The markets any way face resistance at every level but the crucial thing is that it should not loose the bottom support. The markets may oscillate for next two weeks till the budgets boosts the sentiment. The policy matters likely to infuse new blood in the markets if it stays above 5480 by Feb series. The blue chips in the banking sector building hopes on insurance sector and economic growth may find good support from bulls once the Budget sops announced to Heath insurance and the corporate tax cut. The FM will infuse large savings of industry and personal income to plough back for rapid growth well above 9%.

The pharma sector will get FII support as they encouraged the IT sector. So KOI- Keep On Investing in stocks that do the CRAMS business. The power equipment sector will be no more a favourate on the bourses but the encouragement will afloat the stocks at these levels. The boom in the realty will continue to stay and the stocks will out perform the Nifty. The emerging sector will be CNG and gas distribution in the towns. The RNRL will see more good days than now. The GAIL will benefit the most than the other stocks in the Nifty.

The Nifty will find first support at 5135 level and 5085 is crucial. Incase Nifty trades below 5085, then offload 50% of the holding. The RIL has support at 2356-26, Infy has support at 1441-45 levels but it is good above 1505-11 levels. The ICICI bank has support at 1135-30 and SBI has support at 2130-35 levels. The relatively weak counters are Bharti and RCOM. The Bharti has to cross 909 at the earliest possible time and shall trade above 850. The RCOM has to cross 645 and shall trade above 611-15 levels to see that the stocks get bulls support along with the Nifty advancement. The positive sentiment will become a foundation for next big movement when the Nifty trades above 5545.

Some time needed…

The markets taken the timely u-turn to see new highs in future but it will take some time to do so.
As suggested in the previous posting the Nifty took a deep low at around 4800 and trapped the ardent bears to see further low. The earlier suggested level for the Nifty is at 5085 but to trap the bears it took a deep low at 4803 but took bottom support at that level for 3-trading sessions and the journey took the index to reach 5300 levels. This classic example can be correlated with the BHEL support at 2047 and then a trap to bring at 1850 levels to see the bears live in joy for a day or two. Try to understand the game plan behind the moves to understand the stock market operation.

The length of fall is so deep that it could take more time to bring the retail investors to market. The financially damaged retail investors tasted bitter experience with R-Power, are experiencing a series of failures at their investment decisions. They are now nostalgic to the heart pains/caused wounds. They need more time to forget the bad feelings of buying stocks and will become scapegoats again at the top.

So always “Buy Low and Sell High”- this could be a valid proposition only when one understands the market movements. The other way of investment in stocks is “Buy when the trader’s margin selling happens and Sell when the trader is confident to take delivery with margin”.

No longer a long fall..

The Nifty has created a great concern suddenly dropping nearly by 200 points from previous week. Now the markets are moving Southwards in spite of smart money entering into prime stocks. The best thing is let the market fall to the deepest possible place, as it is a trap to bears; once it crosses 5135 buy the good stocks that have limited scope to fall. The best thing is to accumulate the out-performing sectors like pharma, auto and techs to some extent. The weak signals are not over but the hope is building by strength on the budget expectations on tax sops to corporates. As posted earlier the Reliance got support at 2390 level and closed at 2426.

The worrying factor is that that markets did not excused the slow down in the growth when the CSO announced the data. The steep fall more than 180 points damaged the short-term prospects of early recovery of Nifty. Now Nifty will advance definite, confirmed growth prospects. This provides an excellent opportunity for cherry picking in the lot. The clear signals of advance movements confirmed in software stocks like Infosys, so long it stays above 1470 favours the bulls and likely to gain over Rs 200/-, can easily cross 1749-1770, Satyam can cross 453-460 range, Wipro can cross 463. The smart money is entering in the auto sector, especially Tata Motors will run above 740 to 870 range and the rest will follow. The defensive sector Pharma will now infuse fresh momentum with the tax benefits to the R&D and the private equity players encourage our companies to expand to meet the demand of CRAMS business. The top players like Cipla and Ranbaxy started bottom building. The stocks like Dishman, Divis, Nicholas and Matrix will give 60-100 % returns in one year. So falling Nifty cause tension for those whose investments are for a week to 10 days (now forger Buy Today Sell Tomorrow story). Nobody has ever thought how dangerous it is to find a fool for the next day to buy those dumped stocks on premium for a single night holding.

The Worst is not over…

The global turmoil has not came to an end as one after one bad news is unwinding after every rise the markets are inching globally. The spin that created due to sub-prime issue is going to settle in a week’s time as the eve of Budget-08 is going to creat its interest at the Indian bourses.

The technical’s are building on weak foundations of global cues at Nifty level but the bottom building is on. Incase the Budget fails to meet the market expectations then the markets likely to touch 4135-45 range and may stay in that range for more than an year as the election schedule will dampen the markets. So the crucial support at the first level exists at 5115-5085, then the crux of Nifty support exists at 4503-4518.

The markets look southwards so long Reliance trade below 2645-50, but the Bulls keep their faith strongly to fight against all odds until Reliance trades above 2400-2380. The immediate support for the Nifty is at 5225-15 and the front line Nifty movers are favouring the bulls at this point in time.

As simple as that ….

The stock market is a beautiful place where all can gather and have fun, offering parties, celebrating for some body’s fall is also seen even when the days of mourning were announced at the bourses. This is a common phenomenon that can be tracked across the world. The interested groups gather to enjoy the party when some body made a “Killing” in the market while the Bull move is on. These easy earnings and celebrations throw lots of hope in the individuals who are even called at that particular point as spectators of the “Stock Game”. At this point in time no-body listens -“Stock market game is no child’s play”.

These spectators spread the news of how easy it is to mint lakhs/crores at the bourses that to in weeks/days. These people motivate the sleeping/non-participators to grab the ever-flooding opportunities in the stock market. Slowly but surely the “chain action” will spread the news to streets. The “chain action generated reaction” will increase the activity in the market that propels the prices to higher levels. The money flows and chases the stocks unabated. The crux of the game starts here- the fag end retail investor/new participant think that the up move is real and permanent. This story is not new to the seasoned but they also get trapped as they think/rather advance a bit before the fall starts. So they get trapped twice in the short side and their stop losses get triggered. The new comers will lift the stocks shorted by the seasoned as they think that the move is a “God sent opportunity”.

Now the operators build positions against the up move at the top/plateau, they tend to loose some notional loss as the stock even move higher. The seasoned traders think that the high volume built up at the top is a bottom building exercise for a fresh move. So they tend to go long or wait for confirmation of the long move that keeps them away from shorting or leaving their deliveries. The real crack down will happen at that movement that leads to sharp fall in the market. The new comers and the margin traders get wiped out of the system. The losses put burden on their families and the crying on streets by blaming the “Market” becomes a day of activity for some time. The newspapers mention in their headlines how the Govt. failed to save the retail investor. But very little effort has done to educate the investors. No media tried enough to educate the retailer investor about the over greediness/underling dangers of capital loss or the need for systematic investment plan over a period of time. We all know that the story repeats once again after some time.

The cracks can be seen before a collapse; like that the sprout cracks the ground to emerge. The stock market is no different from nature, do some homework, understand the business cycles and the company prospects before investing. Above all the stock market operation is as simple as that ‘Never build the herd mentality but Follow the Trend”.

Increasing B P ….

The real test for Bulls and the in built long run of Bullishness in the Indian markets will see the new opening tomorrow. In case the Indian markets are in bull grip, then the markets will open above 5226 and will close above 5280 at Nifty.
The bears took lot of advantage due to US financial crisis and global troubles. The situation at the home is very positive. (I failed to publish- It has little importance but can be used as a record.)

The game of averages …

The operators take large amount of “Risk” and so is the “Return”. The retail investor always at the fag end to receive the vital information and fail to do necessary home that can give good returns/protect him from the pit falls. I try to once again make the readers about the warning made when the Mid and Small cap run up started …… titled as Distribute and eliminate…………..dt.21-11-07…

Who will buy at higher levels is all ways the question asked by many and the doubt can be answered only when some body experiences the taste of buying at the top and selling at the panic bottom.
“Don’t be CRAZY to chase…”, “be cautious…..,” the phrases often used and shout… buy buy buying—happening every where……create a confusion in the minds of investors and make them to believe every thing is rosy and beautiful. This is a classical effort to prepare the retail small investors to become scapegoats.

In my earlier write up cautioned the readers to think about the happenings at the bourses. The speeds at which things are happening are very new to Indian investors and are losing time, opportunity and money in the process. The game plans are designed in such a manner to eliminate the retail investor incase somebody holding good stocks at fair prices.

“The steep falls and steep rises give little time to think.”— “Stock Market” is a mind game and every step of investment shall go after through research, understanding the business and the timing of pricing the investment.
At the end of the day “Minting Money” in the “Stock Market” comes by “Buy Low- Sell High” but not by buying cheap………………

The experts are clear about the Bull market but are not advising the investors to buy at the rock bottom prices and asking to wait till they average.

The Indian growth story is selling at dirt cheap at the bourses. The inherent strengths are unexplored and more good days to come. Let some body suffer at some place be sympathetic but all thing hungama is just because to give respect. But after a few days of turmoil, the nations will go back to work. Because US is going for elections like us they are also compelling the Govt. to go for some incentives to industry and to the public. The US is no exception than any other nation when it comes to elections. So there is nothing to worry about our GDP growth or about our markets. The good companies will flourish early than the laggards any way lose their steam.

Never sell the Enterprise…

The markets are facing rough time but the ray of hope lies in the growth story. The markets are likely to bounce back to new levels and even cross the High in the months to come as the dust will settle after two quarters. The India’s economy growth is intact and the corporate performance will improve in future. The internal consumption is huge and the breadth is increasing by strength.

The Nifty is strong at 4500-4600 levels. The range suggested earlier (5200 to 6300) is still a valid range as the FII’s have heavily from 19th Sep-07 to 16th Oct-07, invested at the 4500-5700 Nifty levels. The FII out flow is a cause of concern at this point in time but not at all a worry some event.

So long Reliance stays above 2430-50 level, ICICI stays above 1035-29 level and the ONGC stays above 1000-990, SBI stays above 2020 and the Bharti stays above 810 level the markets enjoy the bulls support. Small aberrations through opportunity to buy but not to sell.The HDFC, HDFC bank, RCOM, REL, NTPC, SAIL, Tata Steel are going to catch up in future. The Techs are bottomed out and they have limited space left to correct. The correction could not change the bottom supports of ITC and HUL. The rest any way change their weight age time and again as they could through no material impact on the Nifty levels.

The immediate support levels for Nifty are at 5080 and can easily touch 5680 with or with out global cues that can favour our markets. The US recession will become a boon to us as they out- source services to products. The Auto and auto components business will benefit in future will get favourable news from June-08. The bad period may last for 6-9 months; consider this as an opportunity for a fine consolidation period and an excellent base for the next boom. The market participants know that markets observe periods of consolidation and a vertical rise cannot last longer.

So Never sell the growth story of the enterprise but sell the stock at higher levels and re-enter at the lower levels. The investment at higher levels is a valid proposition for the operator as it could through some opportunity to offload large chunk of holding but not for the small/retail investor. “Never chase stocks - Never miss a Growth Stock”.

The Fittest will….

The trouble was there in the market when the markets crossed 6300 at Nifty level and the supports became weak but it survived on the euphoria of Mid and small cap run-up. I personally warned in my write up titled..(Y can’t it be…………….Dt.18-11-2007……. I personally feel that the prices are sky rocketing with thin edge time to participate in those sharp moves is a clear sign of distribution at higher levels.
The retail investor will now about the rise in the scrip at the end of the day, after the next day the participation comes above 20% rise. To conclude the view, these stocks likely to hit the lower circuits or steep fall occur after three to five trading sessions of Bull Run. Be cautious……………………).

The situation could not have this much worse but the deep write down mess in the US financial sector gave an opportunity to correct the steep valuations at the home. So the conclusion is as simple as that “Never buy beyond a point… the point can be identified by the age old, ever green safe investment method—P/E ratio”.

So never blame the market or the seller who made you to buy. It is a simple marketing strategy. While some one out for shopping shall understand his/her home needs rather than blaming marketing people. The emotions at stock market will drain the purse and fill the heart with pain.

So is US………

The markets are fighting for their survival as the Bull Run took a beating at the bourses due to US internal problems. The markets will take considerable time to resume their upward move. (Pls.read my earlier write ups.---the range suggested at 5250-6290 but the high touched at 6347). The game plan of the operators are very clear that they took the Sub-prime issue for more than 6-months so that the retail investor forget. I warned that the sub-prime issue is much bigger than what they pronouncing.

Now the long period of consolidation is good opportunity to traders as they can get in and get out at every 12-15% rise and fall. The earnings will be good to the Indian industry as the consumer demand and the economic growth continue to flourish. The markets likely to test the bottom at 5192-5226 at the worst scenario but this will happen only if the Nifty fails to cross 5935 before the end of Jan-FO series.

The markets likely to get support at 5670 level as first support and if trades below that level then the support at 5445-15 level at the October-07 level. So long the Reliance stays above 2630-50 level, ICICI stays above 1135-29 level and the ONDC stays above 1090-1110, SBI stays above 2020 and the Bharti stays above 810 level the markets enjoy the bulls support. This correction is a measure to MFs & FIIs to save themselves from the Mid-cap trap happened at 2005.

No longer immune…….

The Indian markets are resilient to the external pressures of equity fall as the markets see god future but the immediate and short-term pressures cann’t be ruled out. In my ealier write up dated: 29/10/2007, clearly mentioned the possible up side be capped at 6290.

(It can’t be stretched further….…..I foresee the Bull run can become a long consolidation period- more than 6-9 months with a range of 5250-6290 at Nifty level).
The markets are likely to see more down ward action than upward momentum. The rise and fall ratio could be of 1:3 from next week onwards until Aug-Sep-2008. Incase economy could face the challenges for next 6 months than the upward journey in the stocks resume. Indian stocks valuations based on the broad based economy and growth prospects is over, sure for now. The real test of price move in upward direction depends on the companies that have to perform given the opportunities, then the markets.

Uncertainty is Certain…

The stock valuations are most vulnerable by their nature to the minor and major issues and to local and international issues even if they are not of much importance on the face it but influence a lot by creating turbulance in the minds of the investors, cause anxiety that refluct as "demand and supply" cause fluctuations in the price irrespective of the percentage of concern. We can easily say, “the uncertainty is certain” at the bourses each time and every time. Those who fear about uncertainty can search their souls in peace, as nothing is certain.

As expected in my earlier write up the market bounced back on bull track in 4 trading sessions.(………if the Nifty to close above 5935 with in 3 trading sessions. At the immediate level the Nifty shall not close below 5670 level to continue the bull run…….. The markets likely to take help from the tech stocks, FMGC and from the Pharma).

Now the challenge at the Nifty level is to stay above 5778-71 to register a new high and above 6400 level by the end of first week of Feb-2008. The run up in the prices of power and infra will take a back seat and the service sectors and hotels will enjoy the support of bulls along with FMGC & retail move. The network of gas transportation is the emerging sector. I have been suggesting holding in Fertliser stocks and the next big bet on banks with insurance exposure. These sectors will explode maximum followed by oil exploration and allied services.

The end of the BULLRUN for some time?.

Whether the markets are taking deep breath to settle for a long leap up move to scale new highs or this could be the end of the Bull Run? I see a steep correction like that happened in May 2005 if the Nifty to fails to close above 5935 with in 3 trading sessions. To console the brave hearts, at the immediate level Nifty shall not close below 5670 level to continue the bull run.
Incase the nifty fails to trade and close above 5885 tomorrow, it is likely that the markets likely to touch 5321-28 level and then markets need strong cues to rejuvenate the bulls.
The big boys of the market are very silent for their own reasons but the time has come that they need to infuse vital medicine to the Bulls to take on Bears. The good support of RIL at 2640-30, SBI has support at 2135-2128, ONGC has support at 1060-70, Bharti at 835-829 level and the ICICI has support at 1085-1090. Incase two or three stocks could stay above 4-5% above those support levels then the markets are for the Bulls.
The markets likely to take help from the tech stocks, FMGC and from the Pharma
With out doubt, the Small cap and Mid-cap run-up story is intact until the Nifty stays above 4865-4935 levels.

Gross & wild violation…..

Any body who live with technicals can contribute this fall is steep and wild in violating the supports. Any way the fact is the bottom is lost. The hope totally depended on the reliance, ONGC and SBI. They are very strong even at this level of correction. The bulls have the last opportunity to believe the market is a Bull market until it stays above 5175-80 levels. The markets can fluctuate with a wide range of spread for a greater consolidation as the prices have reached relatively high level.
Then the hope lies a head so long the RIL stays above 2580 at immediate support level and can even touch 2440-50 level. The ONGC got the support at 1090 and even can touch 1010-20 level. The big banking leader can touch 2020-2030 and even touch 1910-1900. The high tech ICICI can touch 1020-1010 level. The violation of the above levels can cause deep cracks that can take months to repair the bull move to regain.
So wait and see what will happen at global level and at the local level. The ray of hope lies with the support from local institutions and the deep-pocketed HNIs who are waiting for long time when the FIIs are at buying spree after the rate cut at US.

Distribute and eliminate…………..

Who will buy at higher levels?- is the question asked by many and the doubt can be answered only when some body experiences the taste of buying at the top and selling at the panic bottom and realising the situations that made/forced to do so.
“Don’t be CRAZY to chase…”, “be cautious…..,” the phrases often used but by shouting… "buy buy buying—happening every where……"..create a situation, confuse the minds of investors and make them to believe that every thing is rosy and beautiful. This is a classical effort to prepare the retail small investors to become scapegoats.

In my earlier write up cautioned the readers to think about the happenings at the bourses. The speeds at which things are happening are very new to Indian investors and are losing time, opportunity and money in the process. The game plans are designed in such a manner to eliminate the retail investor incase somebody holding good stocks at fair prices.

“The steep falls and steep rises give little time to think.”— “Stock Market” is a mind game and every step of investment shall go after through research, understanding the business and the timing of pricing the investment.
At the end of the day “Minting Money” in the “Stock Market” comes by “Buy Low- Sell High” but not by buying cheap………………

Y can’t it be…………….

The story is contrary to the current happenings at the bourses. The positive side shall go like this way….
In my earlier write up I clearly mentioned to hold positions in fertilizer stocks for decent gains that turned right. Now they doubled from the prices recommended to buy & hold. In the same manner I wrote about the investments of FIIs in our markets. They first invested huge amounts in the Reliance group. They are familiar with the Reliance group growth story than the Indian growth story. Now they are spreading their investments to other sectors with different groups.
The situationed at large caps are rather fully saturated at the price level and left with little scope for further appreciation. So the MFs, FIIs and the DIIs are left with no option but to explore new opportunities with emerging companies, though they are small to medium in size at this point in time. The flare up in prices is due to the mismatch in their size and the amount of liquid cash chasing the stock.
The negative side shall go this way….

The small caps and the medium cap stocks are now in their flare-up run at the bourses is visible but the investigative approach can show a dark side of manipulations in the game.

The story goes back to the 2005-2006, the FIIs, the MFs and the operators heavily invested in (the early bird catches the fish-but the frontliners bite the bullets in the war front) the Mid & small caps to capture the instant large gains which turned out a futile effort due to lack of liquidity due to the steep crash when the Sensex was at 12000-12500 range. The investments became dud for long two years with no moves. After a long frustration, now these people captured the up moves with vengeance.
I personally feel that the prices are sky rocketing with thin edge time to retail investors to participate in those sharp moves is a clear sign of distribution at higher levels.The retail investor will now about the rise in the scrip at the end of the day, after the next day only large participation comes above 20% rise. To conclude the view, these stocks likely to hit the lower circuits or steep fall occur after three to five trading sessions of Bull Run. So Be cautious…………………… buy but never chase.

Nobody can stop…..

Nobody can stop or make an end to the stocks “moving”, but the question is always on the direction, at the end it surprises many. Market is the BOSS and boss is always right.

Never be regid to dictate the move either to upward or down ward, just respect it - you will be rewarded with profits.

The New Year of Indian stock market has closed with a thumps down move after 7 years on the eve of the celebration-“Happy Diwali”. The Indian stock market is left with more steam than any body could imagine. So, I personally suggested readers to go by stock specific rather than depending on the Index.

Markets have to fall to eliminate the weak hearts and the daydream manipulators. These two sections are always at the losing end at the end of the day because they place their money on weak fundamentally weak stocks but depend on momentum.

The strength of the market comes from the profits of adopted business models of the companies but not on their dripping margins. So never place your bets on the run-ups but on the sustainable earnings made by the good managements. The story is on and on but the identification of such companies…………….? Wait & watch.

Let the Indian Stock Market provide you a Happy and Prosperous New Year-2064

It can’t be stretched further….

It is a merciless killing of the “Bears” at the bourses by the Bulls and intelligently trapped the Bears in the pretext of mid-term and PM resignation……!. But the Bears could exert some pressure on the bulls to take a back seat on Friday that failed to the core by Monday. The sustained effect can be seen only when there is a reasonable selling happens on Tuesday, otherwise it is endless Bull run.

The banks are in news as the RBI credit policy and anticipated rate cut in US and at home. The credit off take has slowed considerably and the real momentum growth in stocks can put to test in future. I foresee the Bull run can become a long consolidation period- more than 6-9 months with a range of 5250-6290 at Nifty level.

Sincerely speaking the movements at the bourses put my mouth shut and the study was put to halt. The other side is that the study has to be reflected in my trading so I decided to publish in my "moneymagicbnr.blogspot.com" as TRADING TECHNIQUES link.