Archives : NIFTY 2502 - A CRITICAL SUPPORT - 21/11/2008

nifty 2502 – a critical suppor - 21/11/2008. 

Once again we hit bull’s eye, when we had mentioned that the Nifty support is at 2502 and the Nifty even in this turmoil almost took support at 2502 and rebounded from there. The start to the week was very bearish and it kept on increasing, until the level of 2502 was respected in trading on Thursday. This level held even in an otherwise choppy market on Friday. Thus the level of 2502 holds lot of significance in the short term. This level needs to hold or else the previous bottom of 2252 will be in danger and the market will enter panic stage once again. 

RATE CUT, FUEL PRICE CUT - Keep your fingers crossed.

SENSEX. 

NIFTY. 

HOW TO TRADE? 

LAST WEEK’S RECOMMEDATIONS:

Mind blowing, was how one can describe last weeks performance, as almost all the targets were achieved with effortless ease except for HCL Info. But the STAR  SELL of the week were Tata Chem and Everest Kanto, which went down by astonishing 18% and 19% respectively in just a week.!!!!! 
  • Sell Infosys 1213 Tgt 1104 REACHED 1090.
  • Sell Tata Chem 162 Tgt 148 REACHED 133.
  • Sell L&T 791 Tgt 747 REACHED 695.
  • Sell HCL Info 64 Tgt 54 REACHED 64.
  • Sell ABB 461 Tgt 413 REACHED 397.
  • Sell Everest Kanto 171 Tgt 149 REACHED 138.

 If one had sold 200 shares of INFOSYS, 2000 shares of TATA CHEM & EVEREST KANTO, 300 shares of LT & 500 SHARES OF ABB, then one could have earned a whopping profit of Rs. 2,09400/-!!!  

THIS WEEK’S RECOMMENDATIONS:

WATCH OUT FOR:

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nifty 2502 – a critical suppor - 21/11/2008. 

Once again we hit bull’s eye, when we had mentioned that the Nifty support is at 2502 and the Nifty even in this turmoil almost took support at 2502 and rebounded from there. The start to the week was very bearish and it kept on increasing, until the level of 2502 was respected in trading on Thursday. This level held even in an otherwise choppy market on Friday. Thus the level of 2502 holds lot of significance in the short term. This level needs to hold or else the previous bottom of 2252 will be in danger and the market will enter panic stage once again. 

RATE CUT, FUEL PRICE CUT - Keep your fingers crossed.

Inflation for the second week running came in below 9% and lower inflation is a reality and it is here to stay. Inflation came in at 8.90% for the week-ended November 8, 2008. This single digit inflation will compel the RBI to have another round of Interest Rate cut as economic activities are slowing down. Last week, the government was expected to announce a Fuel price cut along with the RBI going for an interest rate cut. Both the things did not materialize last week, but this week, it seems that both will come through. Keep your fingers crossed.  

SENSEX.

Sensex opened the week at 9396, made a high of 9435, made a low of 8316, and closed the week at 8915, thus registering a weekly loss of 470 points. The Sensex has made a Bullish White Marubuzo on the Daily charts. If the recovery is to continue then we can expect a retracement of the current fall from 10570 to 8316. The retracement levels are 9177-9433-9709. The Trendline Support is at 8426 and the Trendline Resistance is at 9461-10195-10504.

For the week ahead the Resistance is at 9061-9435-9875-10195-10570. Support is at 8426-8316-7697-7656. 

NIFTY.

Nifty opened the week at 2813, made a high of 2835, low of 2502, and closed the week at 2693. The weekly loss was 117 points.Nifty has formed a Bullish White Marubuzo formed Bullish Engulfing Pattern on the daily charts.If the pullback is to continue then the Nifty will retrace the fall from 3161 to 2502 and the retracement levels are 2754-2832-2909.The first major resistance the Nifty will face will be at 2860, which was the strong double bottom support. But now it will act as a strong resistance.The Trendline Support is at 2536 and the Trendline Resistance is at 2763-2908-3268.

The O.I. PCR is at 0.87. After quite sometime the Put writers have sprung back into action and thus Put writing is visible at the strikes of 2500 and 2300. These levels will provide strong support in case of a fall. Nifty Calls at the Strikes of 3000 and 3200 has seen lot of addition in open interest which will provide resistance.

For the week ahead, the Resistance is at 2763-2860-2909-3161. Support is at 2536-2502-2288.  

HOW TO TRADE?

1. This week, RPL (73) has given a Breakout. One can construct a Bull Spread for RPL. Buy 70 CA and Sell 80 CA. Or else use Protective Put strategy. Buy a Future and at the same time buy a Put at 70 Strike price at Rs.1.40.2. SAIL 62 is looking Bullish. Construct a Bull Spread by buying a 60 CA and Selling a 70 CA. at a cost of Rs.3.50. Max Loss is Rs 3.50 and Max Profit is 6.50.  

LAST WEEK’S RECOMMEDATIONS:

Mind blowing, was how one can describe last weeks performance, as almost all the targets were achieved with effortless ease except for HCL Info. But the STAR  SELL of the week were Tata Chem and Everest Kanto, which went down by astonishing 18% and 19% respectively in just a week.!!!!! 
  • Sell Infosys 1213 Tgt 1104 REACHED 1090.
  • Sell Tata Chem 162 Tgt 148 REACHED 133.
  • Sell L&T 791 Tgt 747 REACHED 695.
  • Sell HCL Info 64 Tgt 54 REACHED 64.
  • Sell ABB 461 Tgt 413 REACHED 397.
  • Sell Everest Kanto 171 Tgt 149 REACHED 138.

 If one had sold 200 shares of INFOSYS, 2000 shares of TATA CHEM & EVEREST KANTO, 300 shares of LT & 500 SHARES OF ABB, then one could have earned a whopping profit of Rs. 2,09400/-!!!  

THIS WEEK’S RECOMMENDATIONS:

  • Buy IVRCL Infra 131 SL 125 Tgt 141-146-152.
  • Buy RPL 73 SL 71 Tgt 78-82.
  • Buy SAIL 62 SL 58 Tgt 67-76.
  • Buy HPCL 228 SL 221 Tgt 234-245.
  • Buy BPCL 327 SL 319 Tgt 334-345.
  • Buy Cairn 136 SL 129 Tgt 144-149.
  • Buy Nag Const 59 SL 56 Tgt 65-69.

WATCH OUT FOR:

1. RPL: (73) TRENDLINE BREAKOUT. KEEP SL 71, TGT 78-82.

2. IVRCL: (131) STRONG BREAKOUT WITH VOLUMES KEEP SL 122 TGT 146 – 159.

 

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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