Why we are Bullish On Equities!!!

"GOLD", when this word is heard anywhere around india, the speaker gets attention of all the ears around him. Gold is consider to be one of the preferred investment of savings in India. Gold Jewellery is highest consumed in India. Whenever i ask my elders what to of the savings, they would reply "Buy Gold". I am sure many of my friends and colleagues would be facing that. Arent we creating some bubble in gold?? On the charts i was bearish and i am bearish on Gold since it hit 34000+ in last January and i did even post it on this blog. Second thing to gold is "Real Estate". Last ten years inflation in India was majorily due to real estate prices. People became rich unexpectedly faster due to doubling and tripling of Land price in even less than a year of buying the property. A survey by a renowned agency said that saving in financial market droped from 8% from 2008 to just 2% in 2013 of total saving i.e., rest of saving is in either gold and Real estate. Buhh!!! arent we smelling a bubble in real estate??? It my view that when more than 80% of public is bullish in any asset of investment than we can expect a big move in prices on either side. Since we have seen a continuous upside in real estate segment, we can be bias on downside of the prices. On other side Gold is treated as a just a mere investment option in US. I just came across of the article of Ex. member of FED Mr. Randall S Kroszner who stated to our indian Journalist that they wont give more weightage to Gold at this level as their economy is recovering but yet not inflating. Gold is just the hedge against inflation for them. So we can make out that Gold demand in global market will decline so is the case India. On other side Equity has very less portion of ones saving in India, which gives huge opportunities on upside in the Equity. Technically, Gold has strong resistance at 28000/30350 where current rally could hault. Therefore, looking at inter asset analysis, Equity is the underperformer and  we are bullish on it for LONG TERM 

#207 Nifty Update: Ab ki Baar, Nifty ko Maar

Indian Cricket stadium has always been electrifying for IPL but this time whatsapp and social media are more electrifying with youth taking interest in Election starting tomorrow. All the media apps, atleast on my phone, are flooded with Ab Ki baar, Modi sarkar one liners and Funny quotes. But on markets for next few weeks it could be dangerous slides that is why 'Ab ki Baar, Nifty Ko Maar'. We have seen none stop electrifying run from 5933 to 6776 but now its time for some profit booking. In our last post i mentioned that 6780 is strong resistance and Nifty on Thursday resisted at 6777 which was just at the stop we mentioned. What made markets weak was bank license announcement which was just out of the box what traders expected. Two Finance company IDFC and Bandhan Finance were lucky enough to get the license. Many rejected applicants were dissappointed with the decision and why not as they were more financial sound than the approved applicants. This could bring some profit booking in the Finance space which had moved in anticipation of getting banking license. On global front, US payroll is increasing at a steady pace which could lead in cutting more stimulus as market seems to have been improving. Russia may enter recession if capital outflow continues due to political tension over Crimea. Coming back to Technicals, Nifty daily charts suggest a highly overbough markets. As we all could notice on the charts above it was in upward channel which could now be breached on Monday to give us steep downfall. It has closed below 5 day moving average for the first time in recent time to show biasness towards downside. Monday opening could hour would give a clear idea. If the opening of NIfty is below 6705 on Monday and if it even trades below that level for 5 points too than downside breached is confirmed. 

Our Recommended Strategy: We recommend traders to go short on nifty CMP: 6694 with tgts of 6586/6453/6350 SL: 6810 (closing basis)

Note: all levels are of Cash Nifty and we would recommend to book 20% profit at 6586 50% at 6453, 30% at 6350 to all are traders. Please rely on our recommendation after consulting your advisor and at your risk

#5 BankNifty Update: Bank's Tank's

On 15th Dec we recommended to Short BankNifty on our blog at 11366 with tgts of 10720 and 10260 of which we have achieved 1st tgt easily last week. BankNifty made low at 10333 which was just 70 points away from our 2cd tgt. Anyways No worries we will still get that tgt but might take some time. Today we had third monetary policy by Mr.Rajan and street expected no change but truely speaking i did expect a hike in rate. I am not lieing but who all are in my touch personally could recollect that i myt have conveyed this gut feeling. Inflation has did cool off in last number but that major change was becoz have decreasing in Onion price. On other sign IIP are getting worst which made me pretty sure that RBI will rake hike. Though i didnt expect hike in reverse repo. Now coming to technicals BankNifty is still showing weakness sign on Weekly chart but a short covering is expected on Daily chart. As you could notice weekly chart in above graph, it clear shows off strong support at 200 Weekly average last week. Secondly now elliot wave suggests that we might see a pull back to 10988 but thats just a big MIGHT. 10988 is also a trendline resistance and 100 weekly Moving average which makes that point more stronger resistance on weekly chart. I hope you guys have booked atleast 50% profit on our 1st tgt 10720, if not do it right away.


Our Recommendation: HOLD rest 50% short on bankNifty with trailing at Cost price 11366 and risk taker can again short near 10988 with the same SL. and near tgt is intact at 10260 

*all levels mentioned are of bankNifty index and Not future and rely on recommendation at your risk.

#4 BankNifty Update: Dont Bank on Bank for near term

After nifty, Banknifty index is the most followed index. On 19th of October we had recommended to go long on Banknifty with tgts of 10948/11200 which were easily achieved in November/December. Now time has came to book all longs for short time and Sell Banknifty. Ofcourse for long term investors its time to arrange for some liquidity as they will get a chance to buy some banks for time horizon 2-3 years. Fundamentally, as we mentioned in our last post on Nifty, we are expecting some rate hike in upcoming Monetary policy and also expecting FED to start tapering soon. Now coming to BankNifty Weekly chart technical's, it has resisted at strong resistance line which was a support line last quarter. Secondly, A dark cloud cover pattern is visible on charts but not much valid as its not the clear top. Thirdly, the most strong theory which i follow Elliot Wave is showing some correction on the charts. Weekly, indicators have turned negative for the short term. Counting Waves, it has completed Sub-Wave 1 with as visible 5 wave Pattern. Now a correction Wave 2 with a-b-c is possible. We expected atleast correction upto 10720. At the most it could drop down to 10250 in near term.

Our Strategy: We recommend to go Short on BANKNIFTY (CMP:11366 cash level) with tgts of 10720/10260 SL:11750 ...

*all level mentioned are of Index and not the future contract of Index

#194 Nifty Update: "Dark Cloud" covers Market and 430/688 points rain expected

Rain in winter is unusual but for the markets this COULD happen, so now carry a RAINCOAT i.e., put option to protect you portfolio for new 2-3 months. Last five session has been continuous downside and that was like a slow poison to traders as slide was a bit everyday. Looking at 'Weekly chart" after today's close i was shocked to see a strong negative candlestick pattern "Dark Cloud" cover. This pattern suggest a reversal to bullish trend and this time its more relevant as its at a "Clear top". Indian Economy hasnt improved as expected or as market has discounted. Yesterday IIP were worst than expected at -1.8% while inflation was at the peak at 11.42% (approx). RBI is expected to hike rate in upcoming monetary policy while FED is expected to start tapering of Bond buying which will squeeze some liquidity from the markets. One more reason to see some profit booking around the world and India is the financial year end for US which makes FII liquidate their investment to adjust Balance Sheet. But one good thing for me is that a new high was in December than rather November because History says if a new high is in november than we see a downside for a long term but this was not case for us this year. Earning results would be announced next month and i am expected a little hazzy profits as auto industry hasnt seen sales as expected in diwali festive. Now coming back to technicals, Weekly chart has surely given a negative candlestick pattern while indicators are also bending negative. Nifty took strong support at 5 Week EMA which is also a strong support was next week. On daily chart we may see some short covering as we have seen 5 straight down side. On monthly chart nifty is trading below the resistance line. For bulls in power this expiry should close above 6288. From the elliot wave point, this was end of Wave 1 from 4624-6415. Now we expect correction of 430 points minimum to maximum 688 points if nifty trade nxt week below 6145-6152.

Our Strategy: SHORT Blindly below 6152-6145 and Sale on Raise with SL of 6450.. Downside targets for next few months 5950/5750/5470

#189 Nifty Update: Haathi vs Chiti

We all have forwarded funny sms Jokes of Haathi vs Chiti  but now traders are experiencing such fight on Nifty Chart. As all technical analyst could make out from my markings on chart that two "head and Shoulders" pattern are visible i.e., One being a confirmed breakout (Haathi) and Second being in formation (Chiti). That the size differs so its easy for some people to say that a small one is not much of importance but as hindi dialogue says "Chiti chahe toh Haathi se bhi Tandav karva sakti hai" and same is true here. Techinally size does matter on the charts but we cant ignore the possibility of smaller formation. Fundamentally we dont have much to cheer domestically but US economy is showing signs of improvement from employement data and ECB also reduce interest rates to 0.25%. Results have all outperformed street estimates. If we talk above correction than Bank Nifty has already given correction. As You all could notice that even nifty has closed at support line of Channel. So everything including a Chiti H&S suggest a pull back early next week but who wins the war depends on breakout. Green patch defines High Volatile range on the charts.

Our strategy:Wait for some confirmation on either side. 6080-6253 is the range. So Wait and Watch as of Now.

#188 Nifty Update: today Nifty acted as a melted Ice cream

Do u remember that day of your childhood when you used to get your favorite icecream??? Than when it used to melt we would lick it to capture every drop of the icecream. Nifty was something like that today to bulls. After a steady opening it gave a tremendous mouth watering rally to 6289 but than it dropped off drastically and bulls felt like that they had just got icecream (nifty) in their mouth but than it dripped from the lips (edge) to the floor. And all bulls would have been crying on nse platform just like a small child. As we could notice in the charts, nifty had cracked out of a small channel and it was surely signal was like a  "Choco Nutty" of havmor to bulls but than we saw some profit booking on banking stocks and midcaps. Today Pharma and IT had held up nifty to some extent. Technically, markets are some more of weakening signs on daily chart. Weekly chart and Monthly chart are still at a pause showing consolidation phase in near term. A small channel is back in action to guide nifty to some downside. Indicators are showing weakness in the daily chart. Nifty has strong resistance at 6207/6232 for tomorrow and support at 6146 for intraday. 6180-6196 is a chewing gum range where market could revolve around. On the breakout on either side we could see market taking support at 6146 or resisting near to 6232

Our strategy: Our closing trailing SL at 6200 has been triggered. Now we recommend to go long above 6207 tomorrow and safe traders above 6232. We dont recommend shorts as secular trend is up for now. 6167 is strong closing support level.

#187 Nifty Update: Bulls are still on a Vacation

Since last two sessions we have seen some profit booking on Diwali Rocket rally on Nifty. BOLT is missing bulls on the screen to tick up the index. We are seeing some sector specific movements and not one sided move which is a typical characteristics of consolidation phase. yesterday it was Pharma and IT for correction while today we saw banking sector sliding and Pharma picking up. As we have been stating Monthly chart is strong bull mode while weekly chart is on the mid way of road indicating that market could even go downside. But daily chart is showing some weakness since last two session. Not much of the fundamental reasons to interfere currently on the charts but market is in purely in Technical Tunes. There are two lines cementing road of nifty current as i have marked with the arrows on the graph. Black line is acting as a support for the 4th time today since 5250. Today we did mention on our fb page and twitter that 6210 would be a strong support and today low was at the same mark. Tomorrows day is important for our long call as closing trailing is near by.

Our Strategy:We still HOLD on our long call with tgts of 6375/6500 with closing trailing SL at 6200. 

#186 Nifty Update: Diwali Rocket Touched 6300ft mark

Investors rocket expires at the highest point in October at 6300 which was not expected by the street but we mentioned in our Update #184 that we expect expiry 6200 and we got lil more on that. There was not much fundamental reason to drive nifty but it was pure technicial support and short recovering which took Nifty near to life time high. Technicals are yet suggesting a good diwali ahead for the investors but its just we should have courage to book profit and liquid portfolio at the right time than. 6380-6500 is the range where you should book profits on your longs. Monthly chart is ofcourse signalling a strong bull but a internal correction could expected in next two expiry though we cant be sure of time scale. next 200 points rally would be backed by Walls of Nifty such as Reliance, Ongc, SBIN, AxisBank and TataSteel  to mention few.We dont recommend to short at 6380-6500 as we will wait for some confirmation before doing so. Technically as you could notice a support line of previous channel is acting as a strong resistance line today but is expected to break through before diwali. Nifty is still take strong support of 5EMA which should be considered as a trailing SL to our longs

Our recommendation: We HOLD on our longs with intact tgts of 6375/6500 with trailing SL revised at 6200(Closing basis)

#185 Nifty Update: A strong breakout

Yesterday Nifty took a strong support at 6080 which was the support line in the channel which i mentioned on our fb page www.facebook.com/mavjihari After the bank policy we did revised our buying call on the page and initiated long on Nifty around 6142-6155. Bank policy was as expected so it rallyed up as rate hike was already discounted for. All the banks and midcap have rallied with huge volumes which is a strong support for the bulls. Nifty has resisted at strong level 6220 which we had been mentioning in our updates all this month.

Our recommendation: HOLD our longs on Nifty with trailing sl of 6125 tgt 6375/6500

Follow us at FB page: www.facebook.com/mavjihari Twitter: @chartechnician or LinkedIn : Kush Ghodasara and dont miss any of our updates 

#9 Article Update: Can Investor’s rocket reach sky line this Diwali?

Nifty is about to reach the peak with all energized investors. Last issue I mentioned that nifty was resting before touching a peak and that’s what happening currently on the chart. October is always consider to be a eventful month as we have quarterly earnings report and this month is considered to be a turnaround time in the history of equity markets. Though not always but yes for India this was slightly the same i.e., turning point for our investors. Economy of India is still in a dicey stage where inflation is at a rising stage and Industrial Production numbers aren’t still a cheering stage where it should be. But the FMCG and service sector companies have started showing improvement on fundamental grounds which is a sign of start of new long term Bull Run in coming years. Though we cannot rely only on that ground but combining other factors we can be bias towards a bull run. IT and Pharma sector has given a good results too with financial sector. Lagging sectors like commodity and Infra has yet not beaten street estimates which is a perfect sign of a bull run cycle as these sectors are always last to give a run.

Government had taken some interesting steps during October month. First, they cleared bill for Jet-Etihad Deal. Secondly, FIPB cleared cleared some deals worth Rs,.1213 crore recently. Thirdly, RBI governor has taken some calculated risk to control money flow by adjusting MSF twice this month. Fourthly, controlled import of Gold has driven Current Account Deficit (CAD) of the country down which is a good sign. On the other side US had a dead lock for almost 10 days for passing the budget. At last on 17^th Oct they passed the budget with a statement saying that a tapering would still be delayed upto mid 2014. This was cheering for the currency’s outside US and even to Indian Rupee. Looking at the technical of USDINR I had initiated short for long term on our blog on 17^th Oct and we still recommend to short over the view of 7-8 months.

Above is the USD/INR weekly chart and we could see that after a high we have seen a sharp downfall. It’s time for some short recovering on the weekly charts but indicators and wave patterns suggest some more downside in a long time scale. On daily chart 50 EMA is at 63.20 which could act as a strong resistance in near term. But now we could see some consolidation. Our recommendation on USD/INR is to short on every rise to 63.20 with downside tgts at 57.40/54.70 Sl:64

  

Coming to investors rocket (nifty) technical chart, we were bullish since last month issue at 5833 and we are intact with the view. Our 1^st tgt 6212 on nifty has been achieved comfortably this October which I mentioned last month.  Nifty has been taking strong support at 5 Weekly average. Indicators are still positive on all time scales but daily chart suggest that a pause is about to arrive pretty soon after a new life time high. We are in the 5^th Wave of a larger 1^st degree on the monthly chart and we could see this end rally anywhere between 6220-6500. Nifty just broke a small downside narrow channel today signaling a strong move ahead. We are bullish on Nifty as the Banknifty and Midcap index are in strong bullrun as per the charts. BankNifty has taken a strong support at 10600 and now we could see a move to close around 12300.

Our recommendation on Nifty: Hold longs on Nifty initiated last month at 5833 and book profits on next two tgts 6370 and 6500 with trailing SL at 6040 and 6200 on achievement of 6370

Follow us on our blog http://chartechnician.blogspot.com and our fb page www.facebook.com/mavjihari or twitter @chartechnician

Note: All the data and graph is as of 29^th October 2013 closing

Disclaimer: I may have personal position in index and above mentioned stocks. Views and News mentioned above may have Errors and omissions. My views are biased more towards technical analysis. Please read and study the market carefully before investing on my idea. For any suggestion contact me on my email. Some words mentioned in article don’t mean their actual meaning. They are correlated for market.

#184 Nifty Update: Rajan karega Raj

All Indians are busy planning their vacation for next week diwali but vacation for investors would all depend on Mr. RBI. Tomorrow we have a monetary policy and markets is all waiting for the results. Most of them expect 25bps hike in repo rate and 25bps in MSF which is already discounted in the market. A change in either rate and we could see a volatile session tomorrow. Technically as we had been mentioning in the last few updates that we are expecting a correction but not more than 6030 and tomorrow could be the day. A small narrow channel has been dipping downwards since last week. All the indicators are at the verge of support and  nifty's upcoming movement would be crucial for us. It is sitting on the Moving average which we consider to be strong support. According to retracement and tiny gap 6020-6045 is a spot were risk taking buyers should go long tomorrow. We expect expiry to be around 6200.

Our recommendation: Risk traders should go long at 6040 and safe traders should wait for a confirmation.

Disclaimer: I may have personal position in index and above mentioned stocks. Views and News mentioned above may have Errors and omissions. My views are biased more towards technical analysis. Please read and study the market carefully before investing on my idea. For any suggestion contact me on my email. Some words mentioned in article don’t mean their actual meaning. They are correlated for market.

#36 Stock update: NaNo completes its drive to 375 Km

In our #27 Stock update on 12th February we recommended to go long blindly on Tata Motors with tgt of 375 and we have achieved that this month. It was recommended at 298 and tgt of 375 which is 25% return in 8 months. We did mention further tgts of 445 and 508 but there arent still activated. Looking at the charts at current situation, weekly chart suggest some retracement. As we could notice that Tata Motors was on a upside channel and now looking at the indicators of weekly time frame than i am smelling a breakout of that channel on downside. Next tgts 445/508 is expected to be activated after some retracement

Our recommendation is to buy on dips

 At Rs. 362 buy 40%
At Rs. 351 buy 10%
At Rs. 340 Buy 20%
At Rs. 314 buy rest 30%
              

#35 Stock Update: Bank on Some Fitness

              Market mid-caps are at attractive to valuation but we have to select few out of the pool. One of them after Dena Bank amd Adani Power which we recommend is Talwalkars Fitness. Why??? Looking first into some basic fundamentals. Sales Turnover has been gradual increasing from 66 crores on March 2010 to 145 crores in March 2013 (rounded off). Earning per share (EPS) for the same period has been up from 4.39 to around 10.5. Talking about Book value than its currently at Rs. 77. One safe thing about talwalkars is that it has secured loans of around 125 crores while has reserves of 176 crores. Looking at listed peers for the stock than its only COSCO India with EPS at 0.70 and Book value at 32. Indias demographic says we have most population of the age between 18-35 and i guess they are now more health conscious.  Firstly, Gym is like a trending fashion amongst high school kids and College teens. Secondly, Going for a branded title is also a must for them. Both the conditions are favorable for Talwalkars.

                 Coming to charts. Talwalkar has given a breakout to strong resistance line with Huge volume as seen in the charts. Secondly now its taking support at new line. Stock has given a double bottom support around 109 level after listing in 2011. Currently it is resisting near to its 200 EMA at 141 but looking at indicators and volumes its a buy on Dip for long term

Our Strategy:We recommend to go Long at CMP at 137 tgts 179/320 Sl: 117 for a long term view

#183 Nifty Update: Madness around the Chart

Since last few updates we had mentioned a channel which was broken a day before yesterday but yesterday we moved back into channel initially in the day and closed back exactly on the verge of new support line. Nifty closed with a Dragon fly Doji but its not supported with perfect rules. Indicators have turned flats to slightly bearish with intact of my tgt of 6035. ONE PECULIAR CHARACTERISTIC OF NIFTY THIS WEEK IS THAT IT HAS CLOSED NEGATIVE EACH DAY. Yesterday we saw a higher high and higher low but we have to wait and watch what should we do the next. On thing supporting bulls is bank nifty which is signaling a buy on each dip and it has under performed nifty. Our trailing SL has been hit on both side yesterday and currently we dont recommend anything for safe traders

Our Strategy: Risk takers go long at 6034 or above 6220 today for holding it positional. Safe traders wait and watch for a safe call.  

#182 Nifty Update: A bearish Engulfing after a Doji

A rewind button has been pressed on Nifty today after 2 days of pause. But today i feel that more weakness has been smelt around the charts. Firstly, Nifty resisted around the same levels for 3 consecutive sessions. Secondly, it gave a super slide in intraday making indicators turning in favor of bears. Thirdly, the channel which we mentioned since last 2 updates had been breached on lower side in intra-day and closed exactly at the verge. On the downside we have a tiny gap unfilled at 6034 which is also coinciding with a another support level making it a strong tgt to be achieved on the downside. Indicators have shown some sign to move downside but a confirmation is required tomorrow from them. Trading and close below 6186 tomorrow is consider to be weak

Our Strategy: Risk traders are SHORT as we initiated during market hours yesterday while a trailing SL for safe traders at 6167 has been hit for long positions. So we are Status Quo for near term on selling side while safe traders its NO Trade zone.  SL to shorts are at 6220

#181 Nifty Update: Rewind or Forward after a Pause button??

Everyday you all come across "Rewind, Forward and Pause" button but since two days Nifty has pressed pause button on its level around 6200. What next?? A"Doji and spinning body" as circled in graph suggest a pause to a current trend and it could retrace or move forward (Rewind or forward) depending on the momentum of global platforms across. Nifty is still in the trading channel as we mentioned yesterday suggesting some bullishness for sure. But NIFTY today exactly resisted near to my 1st tgt 6220 as mentioned yesterday. Intraday movement suggested some weakness ahead so we did initiate a safe player strategy on out FB page during market hours i.e., "Going Long on a Midcap stock and shorting nifty with SL of 6235 (Cash levels). Risk takers are holding long for sure on my nest two tgts 6280/6310. We would recommend to keep Trailing SL at 6167 on downside and 6235 on upper side.  Though long term trend is positive with SL of 6050. Tomorrows CLOSE is a crucial of the movie ahead. 

#180 Nifty Update: Index in perfect channel

On our last update on #Nifty we mentioned to Hold long for risk traders and we are seeing a perfect upside angle on index. We had mentioned to that safe traders could keep a trailing SL at 6050 and it was hit but if you are lucky enough than its good for you. Anyways coming back to nifty, it is in a strong bull momentum. Our tgt 6220 as mentioned in #179 update is yet to be achieved and it would be comfortably achieved. Fundamentally US shut down is over and markets have positively discounted it. Indian markets are also positive on good Q2 earnings. Indiacators are yet positive and signalling some good road head for the index near  term. Weekly and Monthly charts are still handsomely supporting bulls .But WE DONT RECOMMEND TO Initiate new long though.

Our strategy: HOLD existing long with the tgts 6220/6280/6310 trailing SL 6125 (Closing)

#179 Nifty Update: Mixed bag fundamentals but strong technicals

Around 2 weeks ago we gave of tgts 6150 on Nifty in the update #175. We have achieved all the tgts on intraday basis but we still of the idea that we will get a strong close above 6150 soon. Inflation of our country has been rising but on other hand this result earning season has been good so far. With Infosys,Reliance, HDFCBANK, TCS and HCL Tech delivering above estimation result we can expect others to perform as well. US Senate has just passed budget before few minutes to avoid debt default which is of a great benefit for us indirectly. Tapering in US will be delayed and liquidity would stay with us.  CAD has seen some improvement which is also to cheer for us. Technically we are close to over bought position on daily chart but still we can see a long upside on Weekly and monthly chart suggesting a every dip as a buying opportunity. Our strategy is to HOLD long on Nifty  with tgts of 6220  6050 is important support for next 2-3 sessions which could be trailing SL. Currently downside is capped at 5900 which could be consider as buying opportunity if we see that levels first. 

#34 Stock Update: New Morning for Adani Power

Our new recommendation for Multibagger is ADANIPOWER. I know stock has been in down trend since a life time high of 144 but now i am witnessing some accumulation on the weakly chart around 32-34 levels and Volumes are way above avg volumes. Technically on daily chart indicators have turned Super Bullish and stock is comfortably trading above all short term moving averages. A resistance line is around 35 which could act as a miniature breaker but the bull power since to over come it. On weekly chart currently candlestick pattern 'morning star' is in formation and for risk taker its a good time currently to go long for long term.

Our Recommendation: GO Long for risk takers and safe traders above 35 with tgts of 47/55