Archives : MARKET BLEED,INVESTORS CRY. - 08/02/2008

MARKETS BLEED, INVESTORS CRY.- 08/02/2008

 

Last week, we said that 5071 was strong support for the market. The support level was tested several times on Friday, before poor inflation figure helped the market to breach the support at 5071. But it somehow managed to close above that level. But all in all, the market is selling off at every higher level. Nifty will find strong support at 4960 and 4869 levels.

 JATIN SANGHAVI speaks out TO INVESTORS & TRADERS.Markets were bleeding during this bloody correction and investors have lost a lot of money. Traders are already out of the market, as they have made huge losses. Traders have lost so much money that, many of them won’t even return to the stock market. It is a pity that this time more people have lost money than at any other time in the history of our market, which includes the original Big Bull period in the early 90s and the technology bubble period at the start of the millenium.

Many people blame the F&O segment for the collapse. I agree, to a certain extent, only because people use F&O as only a leverage instrument and not as a tool for hedging one’s risk. The fact that the awareness level amongst retail traders is so low that they ended up using F&O as a leverage instrument only and lost everything they had. I would like to differ somewhat and say that F&O is probably, the only available tool for the investors and traders, which can help them to hedge their risk in such uncertain, volatile market conditions. If, for instance, an investor, who has a huge portfolio and does not wish to sell at any levels, would certainly be handicap in such a fall. But if the investor hedges his portfolio, his value certainly won’t go down so much and it will be protected from down side risk. So my sincere request to all my investor friends is PLEASE LEARN how to hedge and protect your portfolio using F&O, instead of just blaming without having any knowledge.

 
  1. RELIANCE POWER TO LIST ON MONDAY.
  2. WOCKARDT HOSPITAL & EMAAR MGF PULLS OUT IPOs.
  3. SENSEX.
  4. NIFTY.
  5. HOW TO TRADE?
  6. LAST WEEK’S RECOMMENDATIONS:
  7. THIS WEEK’S RECOMMENDATIONS:

RELIANCE POWER TO LIST ON MONDAY.

Reliance Power IPO, when it had opened, the gray market premium was around 400 to 450 and is now being quoted at 110-120, mainly due to the crash in the secondary market. The sentiment is negative, so on listing, investors will want to book profits at the first chance. HNI’s certainly will not even be able to recover their costs. If anyone wants to buy this script for the long term, then certainly better opportunities will be available in the future, SO DON’T RUSH TO BUY.

 WOCKARDT HOSPITAL & EMAAR MGF PULLS OUT IPOs.

In what could be termed as huge fallout for the primary market in India, first Wockhardt hospital and then Emaar MGF succumbed to the volatility in the stock markets. Confidence in the primary market has taken a hard knock, which will harm future issues. Due to the bleeding in the secondary market, the investor response was very poor despite two downward price revision (for Emaar MGF). The primary market will take some time to come back on track.

 SENSEX.

Sensex opened the week at 18496, made a high of 18895, low of 17203 and closed the week at 17464. The weekly loss being 769 points. This is the fourth week of correction and generally, this bull market uptill now has reversed after this four week of downtrend. The trendline support for the Sensex is at 17381 and 15480. Trendline resistance is at 18879. There is an unfilled gap between 18509-18274, which will prove to be a strong resistance going forward. The support levels which may be tested this week will be 17113 and 16693.. The 200 DMA falling at 16835 will also be tested. Weekly support is at 17203-17113-16835-16693-15480. Resistance is at 17692-18274-18729-18895.

 NIFTY.Nifty opened the week at 5315, made a high of 5545, low of 5034 and closed the week at 5120. The weekly loss is 197 points. The indicators are all showing weakness and hence the market will sell off at every higher level. I feel that the market might go on to touch the 200 DMA which is falling at 4965 and in case of that being broken, then certainly 4867 level will come in handy and bounce back from that level. But if that level is also broken, then we will go on to test the support at 4491.The trendline resistance is at 5366-5670. Trendline support is at 4869-4491. The correction might lead the Nifty down to test the levels of 4996 and 4867. The weekly support is at 5034-4996-4965-4867-4491. Weekly resistance is at 5177-5366-5545-5618.  HOW TO TRADE?Best recommendation to traders is NOT TO TRADE, but instead go bargain hunting for good quality blue chip stocks which may be available at throw away price in correction, with a view to hold for over 6 months to a year for extraordinary returns. LAST WEEK’S RECOMMENDATIONS:ONCE AGAIN WE WERE 100 % INSPITE OF SUCH BAD & VOLATILE MARKET CONDITIONS. THREE CHEERS TO OUR READERS !!!Tata Motors tgt was 790, reached 788.TCS TGT WAS 980 REACHED 989.ITC TGT WAS 214 REACHED 213.HDFC TGT WAS 3105 REACHED 3098.REI AGRO TGT WAS 1154 REACHED 1154.PRITHVI TGT WAS 338 REACHED 352. THIS WEEK’S RECOMMENDATIONS:
  • SUN PHARMA 1119 SL 1070 TGT 1150-1169.
  • ABB 1284 SL 1264 TGT 1309-1339.
  • TULIP IT 976 SL 960 TGT 999-1049.
  • HERO HONDA 707 SL 685 TGT 749-774.
  • REI AGRO 1153 SL 1100 TGT 1196-1294.
  • SHYAM TELE 128 SL 120 TGT 134-149.
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.

Copyright © 2000 - 2018 Jatin Sanghavi. All rights reserved.
No part of the material on this website may be reproduced or distributed in any forms or by any means, electronics or mechanical without the written permission of the author.
Sitemap