Archives : PROFIT BOOKING IN SHORT TERM UP TREND 17/04/2009

Profit Booking in Short Term UpTrend – 17/04/2009.

Once again our analysis of the market was on the dot. We had clearly mentioned that the critical resistance for the market was near the 200 DMA, Sensex (11342) and Nifty (3437), and we also wrote that it would be difficult to close above these levels. Exactly the same thing was witnessed in this week as the Sensex and Nifty attracted profit booking near Sensex (11350) and Nifty (3450-3500). As a result the short term uptrend which started from Sensex 8047 and Nifty 2539 is undergoing a brief correction.

  • Flirting with 200 dma continues.
  • INFOSYS KICKS OFF THE EARNING SEASON.
  • SENSEX.
  • NIFTY.
  • INDEX LEVELS:
    • LAST WEEK’S RECOMMENDATIONS:
    • Last week once again we achieved 100% success as all our targets reached with ease. If one had bought 1 lot of each,

      STOCK

      Lot SizeRecm.PriceTgtReachedProfit
      Tata Steel1528261298299Rs. 58,064
      ICICI Bank700397453470Rs. 51,100
      CESC1100248263265Rs. 18,700
      Escorts9600455252Rs. 67,200
      IRB4400104118118Rs. 61,600
      LIC HSG1700282294301Rs. 32,300
      Total Profit    Rs. 2,88,964
      • tHIS WEEK’S RECOMMENDATIONS:
      • WATCH OUT FOR:
        TO READ FULL ARTICLE CLIK MORE:

Profit Booking in Short Term UpTrend17/04/2009.

 

Once again our analysis of the market was on the dot. We had clearly mentioned that the critical resistance for the market was near the 200 DMA, Sensex (11342) and Nifty (3437), and we also wrote that it would be difficult to close above these levels. Exactly the same thing was witnessed in this week as the Sensex and Nifty attracted profit booking near Sensex (11350) and Nifty (3450-3500). As a result the short term uptrend which started from Sensex 8047 and Nifty 2539 is undergoing a brief correction.

Flirting with 200 dma continues.

 

Both Sensex and Nifty faced strong resistance near the 200 DMA and as a result market witnessed some profit booking. Normally the 200 DMA is considered to be a sacrosanct level as far as the market players are concerned. Long term investors treat 200 DMA as a Laxman Rekha separating the Bull market and the Bear market. If the market is trading above the 200 DMA, the outlook is positive and if the market trades below the 200 DMA the outlook turns negative.At the recently held Personal Finance Exhibition by Informed Investor at World Trade Centre, I had mentioned about the short term uptrend in the Sensex (closed at 10048) and its possibility towards testing the 200 DMA. According to Divergence principle the market returns to the mean at least twice in a year and hence this explains the short term upmove towards the 200 DMA

INFOSYS KICKS OFF THE EARNING SEASON.

 

Infosys reported its first sequential profit decline in several years, due to the global economic slowdown. It has given a muted guidance which was below expectation. It has forecast de-growth in dollar earnings for the coming year. It is guiding a revenue growth of 1.7% and a profit growth of 7.6% for the next year, which does not reflect any optimum. The company has always under promised and over delivered for the past many years, but this year it will be difficult to do so.

Considering the Bear market scenario, majority of the bad news has already been factored in the price and any positive news on the result front, will have a positive impact on the stock price.

SENSEX.

 

Sensex opened the week at 10916, made a high of 11367, made a low of 10715, and closed on Thursday at 11023, thus registering a weekly gain of 220 points.The Sensex has formed a small black body with a long upper shadow in the daily charts on Friday. The upper shadow indicates selling pressure fro the high of 11339 as on Friday. On the weekly charts Sensex has formed a small white body almost resembling a Star like formation.The Sensex tested the levels of 11337 to 11367 on three consecutive days i.e. Wednesday, Thursday & Friday. Somehow the Sensex was unable to surpass this supply zone. This zone is a very strong resistance zone because of the Trendline resistance and 200 DMA also helping to provide more resistance.The next upmove will be seen only if Sensex close above this resistance zone. Sensex has left a rising gap between 10107-9921. This gap will act as a support in a falling market.Sensex is seeing a correction of the short term rise from 8047 to 11367 and the retracement levels are 10099-9707-9315. If we take into consideration a very short term up move from 9520-11367 then the retracement levels are 10663-10444-10226. The Trendline Resistance is at 11405 and Trendline Support is at 10617.

For the week ahead the Resistance is at 11256-11405-11711. Support is at 10719-10444-10171-9707.

NIFTY.

 

Nifty opened the week at 3211, made a high of 3401, low of 3149, and closed on Thursday at 3342. Thus the weekly gain was 131 points.Nifty has formed a small white body with a long upper shadow on the daily charts as on Friday. It indicates selling pressure from the high of 3489 as on Friday. On the weekly charts Nifty has almost formed a slightly bearish reversal pattern almost resembling a Shooting Star formation.The Nifty tested the levels of 3489 to 3511 on three consecutive days i.e. Wednesday, Thursday & Friday. Somehow the Nifty was unable to surpass this supply zone. This zone is a very strong resistance zone because of the Trendline resistance and 200 DMA also helping to provide more resistance.The next upmove will be seen only if Nifty close above this resistance zone.Nifty is seeing a correction of the short term rise from 2539 to 3511 and the retracement levels are 3140-3025-2910. If we take into consideration a very short term up move from 2962-3511 then the retracement levels are 3301-3237-3172. Nifty strikes of 3400 and 3500 have seen lot of CALL writing which will act as resistance going forward. Some PUT writing is visible at 3300 strike price which will act as an immediate support.The Nifty has Trendline Resistance at 3415. The Trendline Support is at 3346-3171.

For the week ahead, the Resistance is at 3413-3511-3638. Support is at 3311-3237-3149-3025.

INDEX LEVELS:

 

S3S2S1CLOSER1R2R3
Nifty3149323733113384341335113638
Sensex9707101711071911023112561140511711

LAST WEEK’S RECOMMENDATIONS:

Last week once again we achieved 100% success as all our targets reached with ease. If one had bought 1 lot of each,

STOCK

Lot SizeRecm.PriceTgtReachedProfit
Tata Steel1528261298299Rs. 58,064
ICICI Bank700397453470Rs. 51,100
CESC1100248263265Rs. 18,700
Escorts9600455252Rs. 67,200
IRB4400104118118Rs. 61,600
LIC HSG1700282294301Rs. 32,300
Total Profit    Rs. 2,88,964

THIS WEEK’S RECOMMENDATIONS:

PAIR NO.STOCKCMPSLTGT - 1TGT -2
1SellTATA STEEL258269247236
BuyHDFC1799175118711953
2SellTATA MOTORS235248221197
BuyORACLE FIN.866826912950
3SellJSW315328301280
BuyINDIAN BANK115111121125

WATCH OUT FOR:

Sell Tata Steel 258 SL 269 Tgt 247-236-221.                             2 Black Crows.

 

Buy Oracle Fin. 866 SL 826 Tgt 912-950-990.               Inverted Head & Shoulder Breakout.
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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