NIFTY - will the fall gather speed ???

My target for NIFTY of 4755 was achieved... I presume the readers of my blog have benefitted...

The NIFTY has taken support near the indicated level of 4755 and has risen today (30-Oct) on the back of a 200 point jump in DOW JONES.... For the next few trading sessions consider 4730 as the support level and a break below this should now lead to a speedy fall towards sub 4450 levels .. The ADX indicatoris indicative of this.



Upmoves should now face resistance at 4865 and 4910 levels where aggressive traders can start building short positions ...

Expect increase in volatility in the coming week...

Happy trading !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

SBI - Exit in any rise !!

The Nifty moved more or less as indicated. I had indicated that a break below 4930 should lead us towards 4755... Today (28-Oct) it already touched a low of 4784 (as of 3 pm) ...

One of the recent hero of the rally was SBI and it seems those investors holding SBI in their portfolio may want to exit it.

The technical charts looks like it wants to form a Head and Shoulder formation. The second shoulder (right) is yet to be formed..

There is also a negative divergence on the charts which suggests inherent weakness..



Be careful with your holdings and use any upmove to exit the stock for the time being. Upside seems quite limited from these levels. On down side Rs 1800 levels can now give some short term buying opportunity... .

Happy profit booking !!

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

NIFTY - trend weakens... as anticipated. .

The NIFTY trend was indicated to be turning weak (Pl see my last analysis on Oct 5th and Oct 20th).

You would have noticed that for the past 3-4 trading sessions, the market is not able to hold on to upmoves during intraday movements.

While many of the basic indicators have already suggested profit booking, with last couple of days movements, some advanced indicators have gone in 'Sell' mode.



A break below 4930 should lead us now towards 4755 initially levels which is also near to the retracement level of the current ongoing move.

At the current juncture, traders and investor may do well in booking profit in any price upmoves and consider short selling below 4930 levels.

Happy trading and profit booking!!

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

HOCL - coming out of hibernation!

While the NIFTY continues its corrective mood, it may be time to track the mid caps which are bottoming out (there not many left now)

One such stock which came to my radar is HOCL

The scrip has recently (21-Oct-09) broken the long term resistance of Rs 45 with high volumes. It has fallen back to Rs 42 levels.



However the price charts, some basic indicators (like MACD)and some advanced indicators are suggesting that the stock should rally once it now clears past Rs 47/-. So medium term traders may buy on break above Rs 47 with stoploss kept near Rs 34/- for a target of initially Rs 65 and then Rs 77 Plus. . .

Happy trading !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

Nickel - Readying for second leg up!

The followers of my blog would have benefitted from the Nifty view ... Nifty did close near to the indicated down target of 5050 and has further weakened in afternoon trades today... I am sure most of you would have taken profits home . . . If not then remember the saying "One in hand is better than two in the bush"

Well as I watch multiple markets at a time, I presume the metals are again readying themselves for a second phase of up moves.. Copper, Zinc and Nickel especially . . .

I had indicated entry in Nickel in June at Rs 600 + levels on the triple bottom formation.. the target being Rs 900/- .. The target was achieved and surpassed as it tested Rs 1000/-.



Now it seems to be readying for another upmove... The advanced indicators (not shown here) are suggesting increasing momentum once it breaks above Rs 915/- .. Keep a stoploss at Rs 830 and target a price of 1135 initially and then Rs 1200 + ..

Multiple Market traders may want to shift focus from equities to commodities ... And yes we sure had a nice decent move in the USD INR in past few days. . .

CA Rajiv D Khatlawala
Valuetrade Academy Pvt Ltd.

Nifty - Divergence continues . . .

The Nifty opened with a good lead today but could not sustain and in fact closed lower. Conquering 5200 seems a heavy task for the Nifty. Moreover my observation has been that while Nifty is touching its recent highs , most of the frontline stocks are not! This itself suggests extreme caution to the trader.

On the daily charts, there is a small inverted hammer formation while the RSI remains in negative divergence . . .

The daily charts suggests a support of 5000 Nifty while intraday charts (not shown here) suggest weakness on close below 5050.. . .



While individual stocks may be positive, traders may reduce their exposure keeping in mind the RSI divergence ...

Be careful friends,

CA Rajiv D Khatlawala
Valuetrade Academy Pvt Ltd.

POWERGRID - A Diwali Pick!!!!

Before anything else ....

VALUETRADE Academy wishes you all a very happy Diwali and a Great NEW year ahead!

The first thing which comes to mind on the eve of Diwali is ' What to buy for 'Mahurat'? Definitely something which we can hold for long term and which we can buy currently at a reasonable level.

POWERGRID - seems to be just the prime pick for the medium term investor. . .

The technical formation is good , even the advanced indicators (not shown here) and retracement and extension analysis suggests strength developing...



A close above Rs 116 with volume expansion should give us the required signal to jump into the stock .... And support remains strong near Rs 100/- levels ( My Basic course participants will know why !)

On break out , expect a 40% plus target in a few weeks ....

Happy Diwali once again!

CA Rajiv D Khatlawala
Valuetrade Academy Pvt Ltd.

Bombay Dyeing - good for L/T

GOLD (my previous analysis) is now nearing the upward break out.

As for Nifty, the IIP numbers are once again positive. A double digit industrial growth is surely a positive.

The Nifty (as analysed earlier) is now closing below 4930... Till that happens , don't become bearish... Buy trades may be taken - with caution ofcourse.

Bombay dyeing gave a 'technical break out' yesterday. On the medium to long term charts, the trend is positive.



I expect that a break and close above 430/- will give an intial target of Rs 490 and a longer term target of Rs 550 Plus. Keep SL near Rs 375 after thebreak out occurs.

Those of you in an around Baroda may note that the next Batch of Basic Technical Analysis workshop will commence Nov 2 (Tuesday) and Advanced Technical Analysis Workshop will commence on Nov 6 (Friday) - You may email me if interested

Happy trading !

CA Rajiv D Khatlawala
Valuetrade Academy Pvt Ltd.

This DIWALI should u buy Gold (Futures) ?

GOLD hit the headlines a couple of days back as it broke to a multi-years high in dollar terms. It broke the previous level of $1034 ( I had analysed Gold sometime back suggesting that this should happen) .

But in rupee terms, we are still below the all time high of Rs 16000/-. The simple reason is the crash of the USD INR.

It is currently stuck in the range of 15500 and 16000 and a break out is imminent. I expect the USDINR to now become stable (even RBI is worried about the last 3 days volatility) . Given the expected stability of the currency, I expect a break out of Rs 16000 more likely.



Traders may buy on break out with a stoploss near Rs 15500 for a minimum move of Rs 1000 - Rs 1200 in days to come...

This should become more likely especially if the world markets start correcting.

Happy GOLD trading this Diwali...

CA Rajiv D Khatlawala

Reliance - Diwali BONUS!!

The news od Reliance giving a 1:1 bonus hit headlines . Reliance sure has a way to surprise markets and marketmen ... (many a times i wonder even Mukesh Ambani may be surprised later at his own decision)....

Is it a gimmick ? Or does Reliance really see a great future 3, 5 or 8 years ahead ??? (ooops Fibonacci numbers not intended!)

Whatever that may be , but today's market reaction was suggesting that players are not comfortable and sense something fishy ! ... Is it to counter ADAG ? Or is it a bigger strategy- may be of a global scale??? Possible.

Technically however in the short to medium term one may see some selling pressure. Investors who are convinced of the growth (or who are Diehard RIL fans) may use this opporunity to wait a while before jumping in to the stock.



One may be more comfortable buying the stock near to 1900- 1950. Also till it remains below the crucial 2200, upmoves will have selling pressures.

Happy Bonus grabbing !!

CA Rajiv D Khatlawala

Nifty - signs of long awaited reversal !!

Tomorrow's pink papers should read something like this . . . .
"The Nifty fell by 80 points. Nifty falls below the crucial psychological 5000 level and closes just near it. Many sectors saw profit booking. "

Well, a perfect set up for the technical minded to look out for early reversal signs ... Check the following:

1. Evening star formation
2. A negative divergence on RSI and
3. A falling momentum



Surely the strength of the rally is giving early signals of fatigue. Yesterday I had mentioned tht the markets are quite 'nervous' and it seems todays movement confirmed the fear.

Moreover as indicated yesterday, profit booking stoploss has been triggered and now one should remain on the sidelines and condier short sell on close below 4960 or a break below 4930... !!

The additional signals indicated above should increase the confidence level of the short seller - once it breaks below 4960...

I presume one can now turn positive only if the markets breach the 5100 levels .. till that time - its 'correction' time!

Happy trading

CA Rajiv D Khatlawala

Nifty - bullish and nervous !

The nifty's movement seems to be 'supportive' rather than the usual 'leading' in nature. By remaining positive, it seems to be supporting stocks to achieve their respecive highs.

It is spending much time in the vicinity of 5000 (+ or - 100 points around 5000). It is still bullish but surely nervous. And a nervous market is always riskier for the investor / trader. Sudden moves are 'normal' as markets get nervous. With the world markets seeing corrections, it is 'likely' that the needed correction sets in.

In all probabilities it may be a deep but fast correction. There are a lot of similarities between the market rally of 2003 and the current one. But it may be too early to conclude on this similarity.



I shall keep a trailing stoploss at 5020-5000 now and try to book profits if the markets try to move beyond 5125-5140. Only break below 4900 can qualify for short selling.

Happy trading !

CA Rajiv D Khatlawala