Budget blues for Nifty

The Nifty last week went in a trading range. On the weekly charts it has give a hammer - but such a candle has no major meaning as it does not occur at the end of a down move.

But the Nifty chart is suggestive that the current rise in indices is corrective in nature.



The Volumes are not supporting the rise while the MACD too indicates a low 'momentum'. The conclusion could then be that the upmove in the next week near to 4400-4440 should be corrective and an opportunity for us to lighten our positions.

More so as the forthcoming budget seems to be a tough one for our FM especially in a scenario of global recession, world wide protectionism , rising stock markets, falling rupee, falling inflation and rising prices !!!! (wooops)

And hey !! do my readers also see something else ?? a pattern may be ??
(More of it next week)

Till then - Enjoy the weekend!

CA Rajiv D Khatlawala
Head of Research & Training
JHAVERI Securities Ltd.

P & F chart. a new way to chart reading...

At the outset , I apologise for remaining infrequent at the blog...

Well I just thought that the blog can also be used as a 'stimulant' for new ideas and new methods ..

Accordingly, I am presenting the Point and Figure Chart of Silver in US market.



I am sure all those who read my blog will rush to find out more of what is a P&F chart (if you already don't know it)

Happy searching,

CA Rajiv D Khatlawala
Head of Research & Training
JHAVERI Securities Ltd
Baroda

Dabur- targeting beyond the yearly high!!!

My view that the Nifty is heading for a correction seems to be going as anticipated. Expect 4100 Nifty in days to come ... with resistance being at 4375+...

One of the few stocks which is very close to its 52 week high is DABUR INDIA. It is forming a Triangle pattern - which is a continuation pattern and the volumes too have recently risen within this pattern.



Expect a break above 117 to provide further impetus to the move and target the 52 week high as your initial (first) profit booking level. Stop will be at 103 /-

Happy trading !

CA Rajiv D Khatlawala
Head of Research & Training
JHAVERI Securities Ltd

Nat Gas - bottoming out nearing completion!!!

The Nifty moved as expected - The long legged doji did create the selling it usually does. My first target has been achieved (4340) ... I expect some support near to 4275 levels but upmove from this level should be only corrective in nature.

Incidentally Reliance has covered about half it's 'Election result' Gap ... I will not be surprised if Nifty too does something similar in days (or weeks to come) !

Taking NAT GAS on the MCX .. I presume it is too making a bottoming formation and this formation is nearing completion.



A break above Rs 212 and a close above Rs 220 should give us signals of the bottoming out being completed. We may then target Rs 275 - 300 levels in the medium term.

As for Zinc, I presume the stoploss of Rs 71 on close hold... The break out on closing chart has occured suggesting 'active interest' on upside.. Watching closely !!!

Happy bottom fishing in Commodities !

CA Rajiv D Khatlawala
Head of Research and Training
JHAVERI Securities Ltd
Baroda.

A Long Legged Correction ????

A week of indecision went by. Most market players were undecided whether to become bullish or turn bears !!! And those on the sidelines wondered what the bulls and bears were up to (!!)

No doubt the Japanese Candlesticks pattern of a 'Long Legged Doji' occurred on the weekly charts.



The weekly charts indicate the Nifty near a strong historical resistance / supply area and the weekly RSI too is overbought for some time. This is not a common event and the RSI , though an oscillator, may not continue to remain in such overbought condition for long.

A correction is emminent - but is elusive, so to say.

I presume that a Nifty break below 4550 should start the correction process and the first target will be near to 4340...

Watch out and book your profits (and keep them!)

CA Rajiv D Khatlawala
Head of Research & Training
JHAVERI Securities Ltd
Baroda

ZINC - readying for the next move . . .

Time to check the Metals again ...

Nickel is moving as indicated some time back while even Crude Oil is nearing my target of 3400 (indicated buying at Rs 2700 in middle April)...



I presume now other base metals should see increased activity - Zinc is poised for another rally .

A break and close above Rs 77 should give a momentum towards Rs 88-90 levels ... keep SL at 71 after the break out occurs.

Happy trading !!!

CA Rajiv D Khatlawala
Head of Research & Training
JHAVERI Securities Ltd
Baroda

SBI - Don't bank ON it !!!!

You may continue banking with SBI the banker, but don't bank on SBI the stock!!!



The price chart of this banking leader suggests three major issues :

1. The recent rise was NOT support by rising volumes

2. There is a clear negative divergence on the price charts suggesting that at least for some time Rs 1900 will be a price which the stock will find hard to break above

3. I will not be surprised if , in days to come, SBI tests the GAP area

The Nifty too is giving signs of exhaution and it is highly likely that the banking stocks may be one of the leaders leading us to the 'correction' in the market.

Investors and Traders ----CAVEAT EMPTOR (Buyers Beware!)

Incidentally, my previous analysis that the USDINR is suggesting a correction seems to be going as anticipated... Watch out!

CA Rajiv D Khatlawala
Head of Research & Training
JHAVERI Securities Ltd.
Baroda

Markets may correct soon! - USDINR says so !!!!!

A few weeks back I had evaluated the inverse relationship of the Indian Stock Markets and the USDINR ...

More often than not, the price of the USDINR goes in opposite direction to the Indices. In fact I have seen this even in intraday movements.

The USD-INR chart suggests , what is technically called a positive divergence. This is a reversal signal indicating a halt to the current down move...



I expect that a break above 47.50 in the USDINR should give a move upto 49 - 49.25.

Now if the rupee is 'technically likely' to depreciate, the inverse relation with the stock indices gives us an indirect indication of an imminent correction!

Lets see how the currency market performs as a predictor of the stock markets !!!

Happy observing !

CA Rajiv D Khatlawala
Head of Research and Training
JHAVERI Securities Ltd
Baroda

TATA TEA - Something's Brewing !!!

Mid Caps have had a field day today . Even those of you who were (im)patiently waiting for EKC to climb... seemed relieved today ....

With the markets rising relentlessly ,it is becoming increasingly difficult to identify socks for investment but I did manage to pick one good stock in the process of my radar screening...

TATA TEA seems to be ripe for an up move. Today's break out of its range was with very high volumes and gives us some comfort.



I would target a figure of Rs 800+ and keep a stoploss close to Rs 685/-. I am sure you have noticed the pattern - Tata 'Diamond' Chai - should we say ? ? ?

Happy Trading

CA Rajiv D Khatlawala
Head of Research and Training
JHAVERI Securities Ltd.
Baroda.