Archives : 14002 - CRITICAL SUPPORT - 05/09/2008
14002 – CRITICAL SUPPORT – 05/09/2008.

Market went up spectacularly on Tuesday, backed by strong U.S. market and a dramatic fall in the crude price. But somehow the market seems to be giving up at higher levels and is exhibiting signs of tiring out as it is not able to build on the small rallies. The worrying sign is that at every higher level the selling increases. This shows signs of distribution as the money keeps going out of the market as can be seen by the continuously increasing FII outflows. Investors and Traders are advised caution as the volatility and uncertainty increases. Better to be cautious than to be sorry.

  
  • SENSEX - 14002, Nifty – 4201.
  • CRUDE RELIEF. 
  • SENSEX.
  • NIFTY.
  • LAST WEEK’S RECOMMENDATIONS:

Once again we were on target as majority of our stocks hit the targets. Just see Educomp and Aban for sheer delight. If one had bought 100 shares of Educomp and Aban, 500 shares of Great Offshore and KLG Systel, 1000 shares of Mphasis BFL and HCL Tech and 2000 shares of GTC Ind, then the Total Profit would have been astounding Rs. 1,18,600. in just a week !!!
  • BUY EDUCOMP @ 3770 TGT 3941 REACHED 4029.
  • BUY GT OFFSHORE @ 530 TGT 556 REAHCED 568.
  • BUY KLG SYSTEL @ 397 TGT 414 REACHED 422.
  • BUY MPAHSIS BFL @ 242 TGT 251 REACHED 253.
  • BUY GTC IND @ 138 REACHED 140.
  • BUY ABAN @ 2083 TGT 2263 REACHED 2325.
  • BUY HCL TECH @ 233 TGT 249 REACHED 255.
  
  • THIS WEEK’S RECOMMENDATIONS:

  • WATCH OUT FOR :


14002 – CRITICAL SUPPORT – 05/09/2008.

Market went up spectacularly on Tuesday, backed by strong U.S. market and a dramatic fall in the crude price. But somehow the market seems to be giving up at higher levels and is exhibiting signs of tiring out as it is not able to build on the small rallies. The worrying sign is that at every higher level the selling increases. This shows signs of distribution as the money keeps going out of the market as can be seen by the continuously increasing FII outflows. Investors and Traders are advised caution as the volatility and uncertainty increases. Better to be cautious than to be sorry.

  SENSEX - 14002, Nifty – 4201.

Sensex formed bottom at 12514 and went on to reach 15579 with higher bottom formation in place. The higher bottoms were formed at 13727 and 14002.The Nifty went up from 3790 to 4649, while forming higher bottoms at 4159 and 4201. Now both the Sensex and Nifty must respect the last higher bottom formed at 14002 and 4201 respectively, if it wants to keep the higher top and bottom formation intact. In any fall the 14002 for the Sensex and 4201 for the Nifty becomes critical support which should not be broken.

  CRUDE RELIEF.

Crude has fallen all the way to $105 per barrel and is now providing some relief. The inflation for the second week running came in at lower levels because of the crude effect. The fall in Crude prices provided much needed relief to crude dependent sectors such as Oil Marketing Companies like HPCL, BPCL and IOC. The other sector which seemed direct beneficiary of the fall in crude prices was the Aviation sector as both Jet Air and Deccan Aviation posted smart gains during the course of the week.

  SENSEX.

Sensex opened the week at 14412, made a high of 15106, low of 14281 and closed the week at 14483. The weekly loss was 81 points. The Sensex is reacting after reaching a high of 15106 and is now moving down. If we consider that the Sensex is correcting the rise from 12514 to 15579, then the correction levels are 14408-14046-13685.

The Sensex fell with a gap on Friday and this gap from 14766-14601 will provide resistance while moving ahead. The Trendline Support is at 14283-13733. Trendline Resistance is at 14608-14988. The Trendline support at 13733 is matching with the higher bottom formed at 13727. The market has to cross and close above the trendline resistance at 14988 to restart the upmove.

For the week ahead the Resistance is at 14608-14766-14988-15231. Support is at 14281-14002-13727.

  NIFTY.

Nifty opened the week at 4356, made a high of 4522, low of 4281 and closed the week at 4352. The weekly loss was 8 points. The Nifty formed a Doji on the weekly charts. The Nifty is correcting its rise from 3790 to 4649 and the correction levels are placed at 4321-4219-4118. The Trendline Resistance is at 4492-4528. The Trendline Support is at 4286-4214-4148. The Trendline Support at 4148 is matching with the higher bottom formed at 4159. Thus the support zone of 4159-4148 assumes significance. The Nifty OI PCR is at 1.28. The increased Call writing at the strike of 4500 shows strong resistance at that level.

For the week ahead, the Resistance is at 4383-4492-4553. Support is at 4281-4201-4159-4118.

  LAST WEEK’S RECOMMENDATIONS:

Once again we were on target as majority of our stocks hit the targets. Just see Educomp and Aban for sheer delight. If one had bought 100 shares of Educomp and Aban, 500 shares of Great Offshore and KLG Systel, 1000 shares of Mphasis BFL and HCL Tech and 2000 shares of GTC Ind, then the Total Profit would have been astounding Rs. 1,18,600. in just a week !!!
  • BUY EDUCOMP @ 3770 TGT 3941 REACHED 4029.
  • BUY GT OFFSHORE @ 530 TGT 556 REAHCED 568.
  • BUY KLG SYSTEL @ 397 TGT 414 REACHED 422.
  • BUY MPAHSIS BFL @ 242 TGT 251 REACHED 253.
  • BUY GTC IND @ 138 REACHED 140.
  • BUY ABAN @ 2083 TGT 2263 REACHED 2325.
  • BUY HCL TECH @ 233 TGT 249 REACHED 255.
  THIS WEEK’S RECOMMENDATIONS:

Since the market is choppy we suggest to hedge the BUY positions with SELL positions of different stocks. The hedge will help you ride the volatility and uncertainty in the market.

 
  • 1. BUY JET AIR AND SELL ORCHID CHEM.
 
Buy Jet Air 540 SL 522 Tgt 558-573-589.Sell Orchid Chem 240 SL 247 Tgt 230-216.
  • 2. BUY UTV AND SELL HDFC.
Buy UTV 808 SL 791 Tgt 823-843.Sell HDFC 2281 SL 2332 Tgt 2233-2200-2125.
  • 3. BUY IOC AND SELL TATA STEEL.
Buy IOC 446 SL 437 Tgt 458-469-481.Sell Tata Steel 560 SL 574 Tgt 547-538-527.
  • 4. Buy HOTEL LEELA AND SELL NIFTY FUTURE.
Buy Hotel Leela 33.80 SL 32.50 Tgt 36.75 - 38.90.
 WATCH OUT FOR :   
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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