Nifty after 30th July 2007

If you happen to see that Friday first hour, the candle formed is a bullish candle and hence the market jumps up. Refer to the candle explanation at http://www.fxwords.com/b/bullish-dragonfly-doji-candlestick.html. It may also be noted that the Monday rise was well up to the 0.618 pullback of the Friday fall. A healthy sign for some more upside. Of course the market could not sustain and closed on Monday nearly at Friday levels.

What next is a matter of watching. The credit policy on Tuesday can be a cause to take the market either way. The government is worried about the foreign funds inflows more than tampering with the interest rates. What exactly happens is to be judged. A tightening to stop the inflows is also a bad omen to the market. Whatever happens, the banking stocks should be in the limelight and people can keep an eye on the banks to locate good moves up and also, once the peaks are reached to trade the fall even if it warrants you to go short over a period of more than a day.

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Nifty after 27 july 2007

What next ? 4420 was the trend line hit and Friday nearly did that. Add a 1 per cent margin to get a 4380 for whipsaws .....

Take another case of nifty. Mid June to end July when the top was made...... We have done 0.382 or thirty-eight percent retrace of 4440 already in that Friday jerk. A 0.5 or fifty per cent retrace is at 4376 which nearly coincides with the above mentioned target of 4380. This will come very easily.

Now is the point. If we go to that 0.618 or sixty-two per cent retrace, it becomes a risk for that level is where the market automatically starts to move towards the full or hundred percent retrace. This level is 4311. The market generally stops here for a breather before moving on in the same direction. So if the market has to hold it must not to that rather precarious level of 4311.
Is this possible? Can we take a long at 4380/4376 levels? Or how about somewhere near that 4311 ? You have got to be smart to either take a smart gamble early or the moment it turns around back to rise up..... Do not try to mimic situations; for every time, there is a different story and a different plot these big fellows play.
Remember you are second smartest. The big smart is the market.
Once all the above situations fail.......what if they fail? The full retrace is at 4100 levels. Lots of other intermediate levels can be calculated. Try to remain simple and clear. If you can sense the futures and options market - the puts and calls - you can be a better judge.
And if all hell breaks, there are still more levels but take one step at a time. But keep in mind the next step as well, well in advance.

........................... Click here to read more!

Fibonacci retrace of 0.236

The fibonacci retrace of 0.236 is too small to often work on.......either on the upside or on the downside. But the beauty of this is that be it intraday or be it on an end of day basis ........... it works pretty well. In the sense that once you are able to judge the top or the bottom PERFECTLY, there is virtually no stopping you to reach that target. See today intraday nifty chart or as a matter of fact watch almost any chart on any time frame. You are bound to get a very high accuracy. Now the point is so why do we not trade it. The answer is that we are at times not able to tell whether a top or a bottom has been made and by the time we realize, this target is already there. Do try this strategy on swing trading and get good results rather than intra day ...... All the best !

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What time charts should you be using

We all generally make a mistake of trading and using the wrong charts. Ever realized that ? Have a look as to whom you resemble for a particular trade and trying using that time frame chart and do confirmations if any using the next higher time frame chart.

Trading Style & Related Time Chart
Participant	Chart
Scalpers	1-minute
Day traders	5-minute
Position traders	60-minute
Investors	Daily
Institutions	Weekly

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And the July 2007 expiry day nifty looked like this

And this month (July 2007) expiry looked like this. More or less was anticipated to be up ....... and if you see the last move ......... was a quick sharp 40 point move ....... which was nearly pinpointed just before it started banging on........ Well done to all those who earned in watching and waiting and working a trade in the last hour spike. ........................... Click here to read more!

Nifty expiry day for the last 6 months

June 2007May 2007

April 2007

March2007

February2007

January2007

The following 6 NIFTY spot charts show you the expiry day (the last thursday of the month) for the last 6 months. If you notice, around 1 to 2 hours before the close, generally a spike is seen. The spike can be any direction and if you plan to work on this with puts and calls, it can be profitable. Please keep in mind that it is for the people who can act fast and have a knowledge and understanding as to what is to be done. Rest of us, please just watch and do NOT try to handle an extinguishing candle............

........................... Click here to read more!

Top Picks

A very interesting article found on the net ......being reproduced as it is........ with due apologies and full credits to the author. The link for the same is at the end.

Sector watch

Priya Kansara

The market seems to have rewarded stocks in advance building in the Q1 forecast. Investors need to take a cautious stock specific approach to avoid disappointments.

The first quarter of this fiscal has been one of the most challenging quarters for India Inc in recent times as it was fraught with problems like rising interest rates, appreciating rupee, cooling down of metal prices and threat of price controls on cement.

As a consequence, the Sensex earnings growth in excess of 30 per cent reported in the past few quarters is expected to moderate. Then, why is the Sensex taking great strides (it touched all-time level of 15,330 on Friday) when the earnings are slowing down and there are concerns about valuations getting stretched?

Says Amitabh Chakraborty, president-equity, Religare Securities, “We believe that interest rates have peaked and hence earning estimates that were based on higher interest rates need to be revised upwards.” Accordingly, analysts are looking beyond the first quarter estimates and feel that Indian companies are likely to end the year with a robust earnings growth of 20 per cent.

Growth will primarily come from sectors such as telecom, banks, engineering and cement. While telecom is experiencing robust growth in the subscriber base, the macro environment for banks looks favourable. Similarly, engineering companies are riding on the capex cycle and attracting huge orders to sustain growth much beyond this year.

Cement companies, while attracting the wrath of the government, are profiting from the tight demand-supply situation. Thus as growth is likely to happen in select pockets, analysts suggest a stock specific strategy. Here is a synopsis of how the first quarter numbers are likely to be and more importantly, what is in store beyond this quarter. Also check out the best picks. TOP PICK'S SCORECARD Rs crore Net sales Operating profit Net profit P/E Q1FY08 % chg Q1FY08 % chg Q1FY08 % chg FY08E FY09E TELECOM Bharti 5916.00 53.40 2450.00 65.00 1430.50 89.50 29.00 22.00 Rel Comm 4173.50 28.40 1740.00 44.00 1079.50 110.40 28.00 22.00 BANKS* HDFC Bank# 1042.00 27.40 787.00 26.70 321.00 34.30 3.50 3.20 ICICI Bank 1903.30 29.00 1570.50 27.60 756.00 21.90 2.40 2.20 UTI Bank# 446.80 38.80 367.90 29.90 175.00 45.20 2.70 2.50 SBI 4483.50 15.40 3010.00 6.10 1037.50 29.90 2.40 2.20 BoI 1025.00 34.10 618.50 32.40 295.00 41.80 1.80 1.60 CAPITAL GOODS BHEL 3617.50 25.30 431.00 35.50 315.60 33.30 28.20 22.50 LnT 4408.50 26.80 450.00 66.70 245.00 56.10 31.00 24.00 Suzlon 1470.00 37.50 279.00 50.00 118.90 29.90 37.00 25.00 CEMENT ACC 1750.50 19.70 486.90 6.90 355.00 19.40 15.00 16.00 Shree Cement 408.00 32.00 183.00 33.60 100.00 11.10 10.50 9.10 India Cement 663.00 36.70 232.50 40.90 136.50 20.80 12.20 11.90 Grasim 2349.50 25.10 728.50 42.00 355.00 19.50 11.70 12.50 PHARMA Divis Labs 230.00 43.80 103.00 123.90 84.00 211.10 33.00 27.00 Opto Cicuit 79.80 156.60 28.00 133.30 23.51 128.30 NA NA OIL AND GAS RIL 28207.00 15.00 5030.00 18.70 3151.00 23.70 20.60 20.00 GAIL 4215.50 3.40 770.60 -18.10 516.00 -12.80 15.00 14.50 METALS Tata Steel 4444.50 13.50 1817.00 14.90 1032.00 6.80 7.70 6.30 SAIL 7350.00 7.20 2032.00 14.20 1318.00 29.50 9.00 7.70 JSW Steel 2470.00 57.40 850.00 86.50 390.00 129.40 7.30 6.80 INFORMATION TECHNOLOGY @ Infosys# 3773.00 0.00 1084.00 -9.40 1079.00 -5.70 24.00 19.60 TCS 5190.00 0.90 1298.00 -10.90 1067.00 -9.00 22.00 18.00 AUTO Maruti 3781.50 21.00 493.40 8.20 359.80 -2.50 13.80 11.50 M&M 2512.50 13.30 286.00 5.90 215.00 15.20 12.60 10.90 Bharat Forge 1066.00 8.00 160.00 0.60 70.00 -10.30 19.70 17.50 Amtek Auto 1072.00 46.80 204.00 59.60 111.80 57.80 13.70 12.40 Apollo Tyres 882.00 16.50 103.00 81.70 44.50 173.00 12.40 11.20 # Actual; * Net sales=Net interest income,Valuation=P/BV; @ chg is q-o-q

INFORMATION TECHNOLOGY Looking at the Infosys results, investors must have got a sense of how the results of other IT companies are going to be. The rupee's rise across major currencies in Q1FY08 (up 7 per cent, 5 per cent and 4 per cent against dollar, pound and euro respectively) took a toll on Infosys’ financials.

The same can be expected of other technology companies as well. Revenues are expected to increase 1-3 per cent quarter-on-quarter (q-o-q), thanks to volume growth of 5-8 per cent and price improvement of nearly one per cent. Operating profit margins are likely to decline by at least 2-3 percentage points due to wage hikes, visa costs and rupee appreciation. Flat sales and declining operating margins will have an impact on the net profit margins as well.

However, investors have punished IT stocks enough. BSE IT index is down 9 per cent since January 2007 as compared to the Sensex gain of 9.8 per cent. The current valuations reflect the downward revision in the rupee earnings guidance given by Infosys and expected from other key players.

Analysts are now recommending front-line IT stocks due to their attractive valuations. Moreover, the business outlook still looks bullish with other levers of growth like volume and pricing remaining strong. Says Chakraborty, “With Sensex having touched fairly high levels, money will now start chasing beaten down sectors like auto, IT, pharma and FMCG.”

TOP PICKS Infosys: Reasonable valuation and sustained growth prospects TCS: Broad based revenue growth and strong margin levers

AUTOMOBILES AND AUTO COMPONENTS Auto has been another beaten down sector after IT, and is down 11 per cent since January 2007. The reason for the huge underperformance is well known. Interest rate hikes and pricing pressures have impacted demand for autos, mainly two-wheelers where volumes were down 7.6 per cent in the April-June 2007 quarter.

While heavy commercial vehicle volumes were up marginally (0.06 per cent), there was reasonable growth in other segments like passengers cars (12.8 per cent), utility vehicles (12.4 per cent), and light commercial vehicles (15.2 per cent).

As a result, revenue growth of the auto sector comprising two, three and four-wheeler major is likely to be muted at around 7 per cent but profits are likely to decline by 7 per cent due to competitive pressures and rising input costs especially for two wheeler majors.

However analysts feel that the worst is over for the auto sector as interest rates have peaked. But it may take some time to have a positive impact on the sales volumes.

TOP PICKS Maruti: Better product mix, strong growth despite tough quarter M&M: Diversified product portfolio and value in subsidiaries

On the other hand, auto component companies are likely to do well due to exports especially to non-US markets like Europe. Moreover, acquisitions done in the past by companies like Bharat Forge, Amtek Auto and Apollo Tyres are likely to start contributing results. While revenues are expected to grow over 10 per cent, profits are expected to grow at 20 per cent.

TOP PICKS Bharat Forge: Strong profit growth due to forex gains offsetting currency losses on exports Amtek Auto: Integration with subsidiaries to expand margins Apollo Tyres: Strong volume and profit growth thanks to stable natural rubber prices

TELECOM Telecom companies are going to be the biggest earnings drivers for the Sensex. Robust subscription growth (about 6.1 million per month) will take care of the slow growth or marginal decline in average revenue per user (ARPU). Margins may remain flat or expand a bit because of economies of scale and operating leverage.

The subscriber growth has grown over 4 per cent q-o-q in the June 2007 quarter, and low-cost entry level phones have expanded the market. Rajat Ragharia, head of research, Motilal Oswal expects telecom companies to double their profits in the first quarter. Going forward, volume growth will continue as and when companies penetrate in the rural areas.

TOP PICKS Bharti Airtel, Reliance Communication, Idea VSNL: Robust growth in subscription and substantial profit growth

BANKS Banks are expected to be the second best performers after telecom. Strong macro environment is enabling higher advances and stable yields on investment portfolio and firm net interest margins.

The key thing to look at is the non-performing assets as a fallout of interest rate hikes undertaken by banks. Private banks might see some pressure on margins due to their aggressive deposit raising exercise and higher provisioning on consumer loans.

On the other hand, public sector banks might fare better on this count. ASK Securities expects margins of public sector banks to ease off in this quarter due to PLR hikes of 50-75 bps in February 2007 and 50-75 bps in April 2007. However, they lag behind their private counterparts in non-interest income growth.

Banking stocks had a significant run-up on the bourses in the last quarter which reflects the turnaround in sentiment in these stocks. Moreover, investors have paid little attention to the recent big bang capital raising plans of banks and the resultant dilution in equity as over the long term it will benefit in terms of higher business.

Also the outlook is positive as interest rate are expected to remain stable with inflation going down. Any dip in stock prices can be considered as good buying opportunities, say analysts.

TOP PICKS Private banks: HDFC Bank, ICICI Bank, UTI Bank: Robust growth in interest and non-interest income Public sector banks: SBI (capital raising plans), Bank of India (consistency in performance even in challenging environment)

Engineering and power equipment Capital goods has been the best performing sector till date in year 2007 with the BSE Capital Goods index gaining 42 per cent. And the reason is obvious. Robust economic activity and huge capex plans is leading to huge order inflows. After a stupendous rise however valuations of many stocks look stretched.

But analyst cannot resist the robust pace of growth in companies like L&T, BHEL, ABB, Siemens and Crompton Greaves. As a result, these stocks still remain the best buys. Says Sandeep Nanda, head of research, Sharekhan, “Being one of the principal sectors, liquidity will continue to flow in the sector.”

In Q1FY08, analysts expect a top line and bottom line growth of at least 30 per cent and 40 per cent respectively, followed by a double digit growth in order backlog.

TOP PICKS BHEL: High earnings visibility (current 3.1x FY07 order book to sales) L&T: Focus on margin expansion, efficiency and better priced orders Suzlon: Sharp rise in overseas sales, consolidation of Hansen

OIL AND GAS Crude oil price rose by 18.6 per cent during the quarter to $68.6 and the Indian basket of crude oil increased by 17.6 per cent to $66.8. However, the rising rupee mitigated the impact of higher crude oil prices to some extent. Though ONGC is expected to gain due to higher crude oil prices, it will suffer due to the heavy subsidy burden and rupee appreciation.

Pure refining companies like Chennai Petroleum are likely to gain from volume growth as well as stronger refining margins though it might be offset partially by a stronger rupee. Refining margins bounced back significantly, to $9 a barrel during the quarter (compared to US$6.8 a barrel in the March quarter).

Oil marketing companies are likely to report losses due to under-recoveries pending clarity on oil bonds. Till date there has been no official announcement on the same. Moreover gas transmission and distribution companies are likely to fare well due to bounce back in volumes thanks to gas availability.

TOP PICKS RIL: Rise in margins especially refining; higher crude throughput; new exploration success. GAIL: Growth in LPG and petrochemical business. Aban Offshore: Increase in fleet size and higher day rates on rigs.

CEMENT The performance of the cement sector is expected to be robust. Revenues are expected to grow at a strong 20-30 per cent thanks to higher volumes growth (10-20 per cent) and increase in realisations (10-15 per cent). Operating margins are expected to improve by over 100 basis points.

Southern players like India Cements are likely to perform better as cement prices have risen by Rs 3-5 per bag in the South compared with Rs 2-3 per bag in other regions. Going forward, analysts do not foresee any substantial rise in cement prices.

The cement sector has underperformed the Sensex due to price curbs and concerns of oversupply in FY09. Most cement stocks especially in the mid-cap space are quoting at single multiples and EV per tonne of $40-60.

However Nanda of Sharekhan thinks differently: “Cement stocks look attractive though there will be one year of pain due to supply glut in the next financial year.” But looking at India's requirements for augmenting infrastructure and ongoing developments in commercial and residential complexes, cement demand would be robust, he adds.

TOP PICKS ACC: Will better industry growth rates. Madras Cements, India Cements: Beneficiary of the price rise in South Grasim: Diversified business, strong growth in cement and VSF business

PHARMA The performance of pharma companies is likely to be a mixed bag. Since most of the companies have significant exposure to the US and Europe, there could be some currency impact. Sales and profits are expected to grow in the range of 20-30 per cent.

Overall, the outlook for the sector is slightly cautious as most of them are in the generics market where pricing pressure still continues, though the domestic formulations market continues to be strong. However, nobody seems to be interested in the pharma sector story despite its defensive nature as market participants prefer to be more focused on individual companies.

TOP PICKS Divi’s Labs: Increasing traction in contract research and API growth

METALS Steel companies are expected to fare better than non-ferrous metal players like aluminium. Aluminium price cuts due to weaker international prices as well as stronger rupee, will impact realisations for Nalco and Hindalco.

International aluminium prices have been down by around 1 per cent in Q1FY08 compared to the March 2007 quarter. On the other hand, steel prices have risen 9.7 per cent.

Moreover, appreciating rupee will have an impact on the realisations across the board. As a result, profit growth could be in the range of 5-10 per cent except JSW Steel and SAIL on good growth in top line. Investors need to be cautious going ahead about metal prices in general.

TOP PICKS Tata Steel: Financials of Corus to be included in this quarter (profit of Rs 900 crore). JSW Steel and SAIL: High volume growth of over 20 per cent due to increased capacity utilisation on expanded capacities during FY08.

FMCG The performance of FMCG companies is not going to be extraordinary. Net sales and operating profits are likely to grow between 10-15 per cent each.

While some analysts think that one could see pressure on margins for players like Hindustan Unilever and Nestle due to rise in input costs (palm oil and milk prices), others debate that margins will be maintained due to price hikes.

TOP PICKS Hindustan Unilever: Personal care products to resume growth. ITC: Less dependence on cigarette volumes-a positive

The above article was picked from the link of http://www.businessstandard.com/common/storypage_supp.php?autono=291174&leftnm=0&subLeft=0&chkFlg=Features ........................... Click here to read more!

Paper trade to perfect your strategies

Paper trade to perfect your strategies if you cannot trade

A good strategy is to HONESTLY do paper trades if for some or the other reason you cannot actually trade. Reasons can be lack of funds, funds stuck in something else and what not. Why to be honest ? That is up to you for if you cheat you get cheated by the market. Paper trades and actual trades you will later on realize do differ. They will not actually deliver as well as they did on paper. Practical problems........forget what.
I used to do the same with nifty futures and did that for some time and used to write notes as to what wrongs i did so that i could analyze later on. Well results were fantastic and even if i say that actual will give 50 per cent success of the paper, not bad. At this this leaves you with good confidence when you actually trade.
All the best ! ........................... Click here to read more!

Do we dip a little ?

Nothing to scare the shit out of someone ..... But do we go for a little dip until Monday or Tuesday ? We surely can do that for all are in super bullish mode and the big gamers do not wish to go up straight. Do they ? Try to understand their psychology and follow the leaders. Any news of levels either technically or special info shall be available to you all as soon as i get !
The market is roaring as of now - 19th July and rushing to reach a logical 4550.
Not that i am bearish all the time ...... but dips are good times to be ready to take longer entries and do some shorting too !
All the best ! ........................... Click here to read more!

19th July 2007

Nifty did a start - UP then - DOWN closing - UP ......and all were confused as to what was the market up to. Expiry is still away and any moves can be expected to it. We expect the market to be tricky like the 18th for today and tomorrow......
If you go to this site of http://www.fxwords.com/j/japanese-candlesticks.html you will see that the 17th July candle for end-of-day nifty was an "evening star" and should have given a down or red candle for the 18th. In fact it did give a red candle had that last half hour rush back not come in. The candle pattern for 18th formed is a doji - the classic way to say - "not sure".
So we are not sure what is coming on 19th that is today. Let it come. ........................... Click here to read more!

16th July 2007

16th Monday will come with high hopes with Nifty just having done a high weekly close ......High means at the Mount Everest and looking up.... Shall we be able to move the Mount a little up ? Or do we correct this week...... I guess we do a little up and a little down too .......... 100 points nifty dip will work fine ......... rest some other time ..........
If you are super bullish then markets may fool you ; if you are super bearish, market may fail you; try to remain right behind the tail so that the BULL or the BEAR can never see you !

Property stocks running and will run. Caution all the time for you never know when a stock tanks too hard ...... ........................... Click here to read more!