CAIRN India - a Techno Fundamental pick

Hello Friends ,

Extremely sorry for being irregular in blogging . Last couple of weeks have been hectic.

The markets are hovering around the resistance level of 4700 - with bulls and bears deciding what to do...

But activity is quite positive in mid caps. One stock which you may want to accumulate as a techno fundamental pick is CAIRN India.

Below are the technicals - I will try to post the 'fundamental basis' too here later.



Accumulate between 220 -265 for medium to long term...

Happy trading ! (and i foresee more blogging in the future) !

CA Rajiv D Khatlawala

USDINR . . . readying to take off!!!!

In one of my earlier posts I have mentioned about the inverse correlation between the USDINR and the Indian stock markets. In fact the correlation co-effecient is near (-)85% which is a high inverse relation.

while the Nifty movement seems to be 'confusing' I thought let me get some idea from the USDINR.



The above chart indicates that the USDINR is currently in 'bullish mode' - MACD too is suggesting it. Moreover it has made a higher low formation and I expect that a break and close above Rs 49.10 should trigger the anticipated rally in the dollar.

This will be more so considering that our FM is willing to increase imports of foodgrains (because of drought) and at the same time ban export of food grain. Logically this should lead to a depreciation in the rupee. A break above Rs 49.10 will tell us that such a thing will happen!!

Price is the king - remember?

Happy trading !!!

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

IOC... the contrarian

OIL PSUs are going against the markets - the contrarians

In last few days the Nifty fell more than 5% while OIL PSUs including IOC rose by 5% +...

The technical indicators are quite positive with the MACD also signalling an upward bias.



The above chart suggests investors can accumulate this with SL placed at 525/- (yes a little far off) for medium term targets of Rs 650 and Rs 725...

Also considering the weak market situation, you may want to buy lesser quantity than usual for any 'buy' indications...

Happy trading !

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

Nifty - targetting sub-4000 ??

The Nifty got strong resistance at the level above 4700 and it seems the FIIs sold heavily near 4700 Nifty ,while as usual, the retail investor saw himself holding the baby!

The last three working days almost gave the candle pattern usually referred to as 'Three black Crows" This is a reversal pattern which remains intact till the high of the first candle is broken.



The MACD too indicates losing of momentum of the upmove and is giving a negative divergence.

The correction, if worldwide / asian factors worsen, can lead us to sub-4000 levels - which will be one of the few opportunities to grab stocks at lower levels !

Happy trading

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

NAT GAS - Long term trend about to change !

Metals on the commodities exchanges are having a good run (as expected ) while the stock markets are taking a breather after a good run up ...

Nickel and Zinc (among other metals) moved quite well and I presume those of you who traded could get good benefit...

I thought of re-visiting 'Nat Gas' where it seems that the 'bottoming out' process is still on... I expected it to complete the bottoming formation last month. But 'technically' speaking the more time a security takes to bottom out , the more fierce should be the subsequent action... Copper and Nickel are recent examples - as both went up 50% in less than 2 months.



I Presume price fall in Nat Gas can be used to add positions and a break out of the Rs 205 level should give us the needed signal of the completion of bottoming out.

Even the long term RSI which I use, is suggesting an impending change in trend.

Positional Traders ... be ready for action ....

Happy trading!

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

"PASSING THE PARCEL"- The game is on!!!

Friends . . . .
We are now just near to the 52 week high – a psychologically satisfying level. Most market players, across the world, believe that - not only the worst is over but also that the much awaited ‘economic revival’ has started. While we are not sure whether economic revival has really started or not, one thing we are sure is that ‘investor sentiments’ has improved dramatically.

As they say “Stocks don’t sell for what they are actually worth; but rather, they sell for what investors ‘think’ what they are worth’. Extend this saying to the market and that is what we are witnessing. Every one believes that economic recovery has started. And like always, all investors – retail, HNI, Mutual funds, FIIs, et al, usually follow the mass thinking – usually referred to as ‘herd mentality’.

Now here is an open secret - the main reason all of us are buying today is ? - 'BECAUSE THE PRICE IS GOING UP'



And pray , this is not necessary a virtue of the Indians alone .....

Going by something what we may call a ‘world wide rotating investor sentiment’, it seems that the Asian markets rally because the US and European markets are positive and in turn the US and European markets rally because the Asian markets are positive!

The roller coaster is spinning - and spinning quite fast . We can equate this to the 'Passing the Parcel' game we enjoyed - not so long ago. While we may enjoy the game, don't forget to get down on the first signs of trouble .. Because otherwise the 'Big players' as usual, will exit leaving the 'ball' in order hands !

Happy trading !

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