Archives : HUNT FOR THE BOTTOM 10/10/2008

hunt for the bottom : 10/10/2008.

            - Jatin Sanghavi.


The Once again the market behaved exactly in the way we predicted and the Sensex and Nifty managed to achieve  their targets of Sensex 10740 and Nifty 3272 as mentioned by us in the weekly article “Meltdown Continues” two weeks before. The market seems to be obeying our articles. Our readers must be overjoyed as they must have made a lot of profit just by following our advice and our recommendations.

 The market started was falling as if there was no bottom. The Sensex and Nifty targets were achieved without putting much effort as the Bears kept on increasing the pressure relentlessly. The markets seemed to be trading in a ‘No Support Zone’ as all Supports were broken very easily. The Sensex as a result suffered the highest weekly loss of almost 2000 points on a weekly basis. The Sensex and Nifty closed the week below the 200 Week MA and as a result of which don’t be surprised to find the Sensex in four digits and Nifty sub 3000 levels soon. 
  • THE GLOBAL TURMOIL.
  • GOOD NEWS DISCOUNTED. 
  • DOW THEORY SAYS.
  • SENSEX.
  • NIFTY.
  • LAST WEEK’S RECOMMENDATIONS:

As is our habit, once again we managed to achieve fantastic results. We are so consistent that sometimes we are in a danger that we may become monotonous. All our recommendations achieved target except Dr Reddy. We hope all our readers must have made handsome Profits.

 
  • SELL RELIANCE IND 1761 TGT 1502 REACHED 1477.
  • SELL L&T 1159 SL 1189 TGT 1141-1032-1000 REACHED 850.
  • SELL TATA POWER 887 SL 911 TGT 843-818-760 REACHED 680.
  • SELL INFOSYS 1391 SL 1428 TGT 1369-1320 REACHED 1040.
  • SELL REL CAP 1063 SL 1119 TGT 1021-1005-972 REACHED 772.
  • BUY BPCL 372 SL 363 TGT 382-393 REACHED 386.
  • BUY DR.REDDY 550 SL 533 STOPLOSS TRIGGERED
If one had bought 200 shares each of RELIANCE,L&T,INFOSYS, & REL CAP, 300 shares of TATA POWER, 1000 shares of BPCL, and 500 shares of DR. REDDY, then one could have earned a WHOPPING TOTAL PROFIT Rs. 3,14,600/- IN JUST ONE WEEK’S TIME. 
  • THIS WEEK’S RECOMMENDATIONS:
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hunt for the bottom : 10/10/2008           

 - Jatin Sanghavi.

 

The Once again the market behaved exactly in the way we predicted and the Sensex and Nifty managed to achieve  their targets of Sensex 10740 and Nifty 3272 as mentioned by us in the weekly article “Meltdown Continues” two weeks before. The market seems to be obeying our articles. Our readers must be overjoyed as they must have made a lot of profit just by following our advice and our recommendations.

 The market started was falling as if there was no bottom. The Sensex and Nifty targets were achieved without putting much effort as the Bears kept on increasing the pressure relentlessly. The markets seemed to be trading in a ‘No Support Zone’ as all Supports were broken very easily. The Sensex as a result suffered the highest weekly loss of almost 2000 points on a weekly basis. The Sensex and Nifty closed the week below the 200 Week MA and as a result of which don’t be surprised to find the Sensex in four digits and Nifty sub 3000 levels soon. 

THE GLOBAL TURMOIL.

Current fall in our markets are not a manifestation of our economy or fundamentals of the company, but this is a result of the panic situation in the global markets. The US market has been bleeding and now the panic situation in the European markets has worsened global uncertainty and the panic has now set in. In order to fight the crisis, the world acted in unison and cut the interest rates almost simultaneously to inject liquidity in the markets. But the markets seem to be in total panic as the matured markets now keep falling like almost 5 to 8% everyday.

GOOD NEWS DISCOUNTED.

Bear markets tend to discount good news and we saw in this week, how many important positive developments were discounted effortlessly.

CRR Cut: The RBI in a fire fighting effort cut the CRR by 150bps instead of 50bps announced earlier. The CRR cut will release Rs. 60,000cr in the already cash starved banking system. But the result was nothing but more pain and more fall.

INFLATION: The inflation for the week ended Sep 27th 2008, came in at 11.80% v/s 11.99%. The inflation is at last showing signs of cooling down and the downfall in inflation will continue as the crude is showing signs of cooling down and the economic growth too has hit a road block. This definitely will help inflation cool down further. But this news too got discounted and the fall continued.

CRUDE: The Crude which was made out to be one of the main culprits in the Bear market till now, fell almost 15% and has almost hit sub 80 level, but failed to give any positive impetus to the market.

IIP Number: The IIP number came in at a shocking 1.3% v/s 10.9%, with the manufacturing growth number at 1.1% v/s 10.7%. The IIP numbers suggest we are in an Industrial recession.

DOW THEORY SAYS.

The Dow Theory suggests that the last stage in a Bear market is a panic stage and there is extreme pessimism everywhere and the market falls as if there is no support. The fall normally overdoes and the market presents extremely good value buying opportunity. The Valuation keeps on getting attractive but there is no pull back and that is exactly what is being witnessed in our market. The current scenario is more like a carnage than a fall. The buyers have disappeared completely as the valuation keeps on getting attractive. The first phase of the bull phase that will follow actually overlaps with this panic stage. This is the time when the indices keep on making newer bottoms and the stocks simply refuse to do so. The India growth story is in no way over and one should keep in mind the global meltdown. One should start searching for stocks that present tremendous value and are still having lot of growth potential.

SENSEX.

Sensex opened the week at 12284, made a high of 12284, made a low of 10239 and closed the week at 10527, thus registering a weekly loss of 1999 points. The indicators are now extremely oversold and we can expect a strong technical dead cat bounce. But by no means the bottom is confirmed. The Sensex has a likely target of 9895-9449. For the week ahead the Resistance is at 10746-10975-11405-11721. Support is at 10239-9951-9895-9449. 

NIFTY.

Nifty opened the week at 3817, made a high of 3821, low of 3198 and closed the week at 3279. The weekly loss was 539 points. The OI PCR is a poor 0.73 and this suggest the markets are extremely oversold. Call writing is the order of the day as Call writing is increasing at the Nifty strikes of 3500-3600. The Nifty is following a Bearish Head and Shoulder pattern and is on the way to achieve target of 3041-2931. The 61.8% Retracement level of the entire Bull market is also at 2997.For the week ahead, the Resistance is at 3394-3505-3627. Support is at 3198-3119-3041-2997-2931.  

LAST WEEK’S RECOMMENDATIONS:

As is our habit, once again we managed to achieve fantastic results. We are so consistent that sometimes we are in a danger that we may become monotonous. All our recommendations achieved target except Dr Reddy. We hope all our readers must have made handsome Profits.
  • SELL RELIANCE IND 1761 TGT 1502 REACHED 1477.
  • SELL L&T 1159 SL 1189 TGT 1141-1032-1000 REACHED 850.
  • SELL TATA POWER 887 SL 911 TGT 843-818-760 REACHED 680.
  • SELL INFOSYS 1391 SL 1428 TGT 1369-1320 REACHED 1040.
  • SELL REL CAP 1063 SL 1119 TGT 1021-1005-972 REACHED 772.
  • BUY BPCL 372 SL 363 TGT 382-393 REACHED 386.
  • BUY DR.REDDY 550 SL 533 STOPLOSS TRIGGERED

 If one had bought 200 shares each of RELIANCE,L&T,INFOSYS, & REL CAP, 300 shares of TATA POWER, 1000 shares of BPCL, and 500 shares of DR. REDDY, then one could have earned a WHOPPING TOTAL PROFIT Rs. 3,14,600/- IN JUST ONE WEEK’S TIME. 

THIS WEEK’S RECOMMENDATIONS:

  • SELL VSNL 417 SL 434 TGT 393-380.
  • SELL HERO HONDA 815 SL 842 TGT 793-785.
  • SELL PNB 460 SL 471 TGT 451-443-437.
  • SELL HUL 221 SL 231 TGT 213-200.
  • SELL LUPIN 621 SL 639 TGT 593-572.
  
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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