Nifty - Dangerous on Monthly!

The Nifty did break below the 'Dubai' support indicated yesterday but closed above this level.

The RBI's move to increase CRR (Cash Reserve Ratio) by 0.75% has been 'absorbed' by the market. However this may be treated as a signal of increase in interest rates in coming times. The clear indication on this will be probably given in the budget.

On a MONTHLY basis, the January month has closed on a weak not. In fact on monthly charts there is what we call the 'Bearish engulfing' candlestick pattern. Also if one observes the monthly chart, one would agree that the recent rise -since last September- has been with declining volumes...



How I interpret this monthly price-volume relation is that the rise since Sept 09 was more due to 'trading and speculative' activity rather than 'long term' investment buying. (Do tell me if you have any other interpretation)

So for the coming week, one should expect a 'technical bounce' towards 4940 - 4990 where the bulls may 'take profit'. And the 'Dubai support' still hold - on closing.... If it breaks, re-start selling ....

Happy trading !
CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

Nifty - at 'DUBAI' support !!

The Nifty opened positive, fell below yesterday's low and then recovered to close slightly positive. This roller coaster ride may suggest that the bulls and bears are now deciding whether to 'take out' the low made on the day of the Dubai crises. That days low was 4806.

Daredevil traders may want to become bullish with this low as their stop. But remember there may only be merely a corrective rise. Also a break below 4806 either tommorow or on Monday should give the market more jitters ... Till then bullish traders may sigh some relief.



Any thing between 4935 and 4978 should be profit booking level for short term intraday buy positions.

While the major oscillators and also advanced indicators are oversold, a bounce back may not occur with strength. . .

Happy trading !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

IT STOCKS - Time UP!

NIFTY gave a resounding crash today as it fell almost 3%. World markets too were weak, but it seems the sell off was heavier in India. The current F&O settlement as weel as the coming budget seems to be heavy in the minds of investors and traders - big and small.

in a way this is good - since we are having a 'correction' before the budget, leaving scope for a post budget resumption of the rally. But still we have some time before buying aggressively.

One of the major beneficiaries of the current rally is the IT sector. I have analysed CNXIT some time back. In fact with the current price charts, it seems that even medium to long term investors may want to reduce their IT stock exposure.



The CNXIT WEEKLY chart is showing negative divergence which should in all probabilities be confirmed by end of this week. And the other weekly advanced indicators (not shown here) too are indicating 'reversal'.

Use any corrective upmove in IT stocks to lower any longs. I will not be surprised if the CNXIT heads towards 5100 - 4700 range in coming weeks. . .

Happy profit booking
CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

Rounding in Hangseng ?

The Nifty could not sustain the upmoves of intraday and closed weaker. Keep an eye on 4970 as indicated last week... Break below this could mean further selloff.

Incidentally, if we take some direction from another emerging market - HangSeng Index, it seems that the Nifty is likely to remain under pressure.



The Hangseng chart indicates what we call a 'rounding pattern' (though it is strictly not a rounding top). Since the rounding is not at the top, we may target about half the normal down move... Even that would indicate that the Hangseng is heading for sub-18000 levels (current level is 20700).

And the Hangseng Index has a very high (97%) correlation to the Nifty !

Woops ... No doubt the world is so interconnected !

Happy trading
CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

NIFTY- Have we been 'here' before ?

On weekly price analysis , the Nifty gave off five weeks of slow (and tired) upward movement in the current one week. Well again this seems to prove the theory - markets take longer time rise than to fall !!!!

But the Nifty weekly price chart also gives interesting view ! The slow and confused movement of past few weeks is 'similar' to that seen during end 2007 / early 2008...



Now, now .. I am surely not wanting to scare you... "Jo dikta hai woh bataa raha hoon"...

Anyway, this at least 'tells' us that we must surely be careful with long positions (if any) ... Become bullish ONLY above 5300 -in fact I have been indicating this for past so many days. . .

The technical indicators (including advanced indicators) are suggesting 'extreme' caution.. (Participants of my workshops - please analyse weekly charts with all parameters discussed)

For the coming week, expect 4970 to be the crucial support and a break below this will mean that more sell off is to come before the union budget. I shall now want to buy stocks near to 4600 levels especially if this level comes before budget!

Happy profit booking !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

NIFTY - Humpty Dumpty we all fall down..

Tomorrow's headlines will be something like "Sensex crashes 440 points / Nifty falls 2.5%, heavyweights lose heavily OR Correction sets in!!!"

Phew!!, the recent sideays moves in the indices were surely suggesting fatigue. In fact a couple of days back I had indicated that the Nifty is getting a 'historical' resistance at 5300 points. And we are already 200 Nifty points below that resistance.



I expect that the correction should continue further in coming days towards 5000 Nifty where one can expect some temporary support. Short sellers may want to cover their short sells near 4970-5000 levels.

And yes - in upmoves tomorrow, 5140-5160 may be good time to exit long positions if any !

Heavyweights are extremely weak and corrective moves may be used to exit longs.

The F&O settlement next week and World market movement will give the needed input on the further direction, but our bias will be on the sell side!!

Happy profit booking,
CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

USDINR -Rs 47/- trend decider!!

The Nifty historical resistance was analysed day before yesterday and it seems that 5300 is too string a resistance to surpass... Watch out the 5170 levels... below which more profit booking expected.

The SEBI announced the Go Ahead to the Exchanges - to introduce more 'currency pairs' including Euro INR, YenINR and PoundINR. Thank You SEBI ... now I would now have more currencies to track and trade !!

The USDINR seems to be stabilising and is now climbing back to 46 levels... But overall trend will remain down till the time Rs 47 is surpassed.. (In fact I just read that some IT firms have hedged long term contracts at Rs 47/- per Dollar... Woops, Are we then in for a rally(yes rally) beyond Rs 47 ? ? ? ).



The current chart suggests covering short sell positions and wait for a corrective rise. And all medium to long term short sell positions need to have stops placed at Rs 47/-.

by the way , EURO-USD has broken an important support level and is currently at below 1.42... More weakness in Euro likely in coming days...

Happy currency trading !
CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

Nifty - facing 'historical resistance'

The NIFTY's movement for the past 14 trading days has been in the range of 5160 to 5300.. quite a narrow range.

The reason of resistance at 5300 is not too far to fetch. It is getting resistance from the May 2008 intermediate high of 5298 levels... (I am sure most of you remember May 2008)...



Well the indicators too are suggesting confusion and 'wait and watch'. Even fundamentally, the overall market is overvalued, going by the NIFTY 50 stocks' P/E multiple at above 23 times...

Most of the institutions are having 'fun' with small and mid-caps and I observe that most Mutual Fund schemes are out performing the benchmark indices because of this.... World markets too are nervous but positive. It seems the world is currently "Nervously Bullish"

Watch the 5160 levels - even in intraday. And a close above 5300 should open the view towards 5450 (as analysed and indicated in Investogyan's newsletter)...

Phew!!! Market's are surely testing our patience...

Happy trading !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

GOLD .. losing its shine ?

Well , I am sure my blog readers are also one of the many who enjoyed the Kite flying festival ... (If no, then give it a thought... Active Traders need to take a break now and then)

Nifty continued its 'boring' movements but there were good moves in specific stocks, including some whih were analysed recently on my blog.. (Hey I am sure after INOX, you have traced R Com)

For a long time I have not 'touched' upon Gold... Well one reason could be the similarly 'boring' movement in GOLD. And Yes the price charts are 'potentially dangerous' ! I am not scaring you, but prices are suggesting it.



The current move in Gold seems to be creating a potential H&S but right now too early to confirm. I would sell if it breaks below Rs 16500/-.. And I would sigh a relief if it regains Rs 17300/-...

So you gold traders out there .. get ready to trade the break out ...
Ready ... Steady ... (wait)!

Once the break out occurs, we will define targets .. Till then - its a wait game ....

Happy watching!

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

PVR ... another INOX ? ? ?

I am sure those of you who could get their hands on INOX (analysed on this blog on 7th) are on their way for a movie at the nearest Inox theatre!

Well, time to see whether we have more 'Inoxs' !!



PVR too is one stock which is giving what is technically termed as a 'continuation' pattern. A break out above Rs 200/- can see this stock shoot up. Moreover therre is low floating stock and it would be an easy job to move this one...

Keep your stoploss at Rs 183 and target price near to Rs 230-240...
And yes - remember these are 'momentum stocks' !

Happy Trading

Hope you all have a safe Uttrayan ...

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

NIFTY - Will 5200 hold ?????

The Infy results , though they cheered the IT counters for today , could not sustain the seeling pressure in other heavyweights - especially the metal space which was a recent hot favorite.

I had indicated yesterday that the Nifty level of 5215 was crucial for intraday. The Nifty tested a low of 5200 and closed below the indicated level at 5210. This was inspite of (or is is 'because of'?)the positive IIP numbers of 11.70% growth !!



The Nifty had 'un enthusiatically' broken the 5200 resistance level last week. Now whether this will really give a support - is a dicy question.

A close below 5180 tomorrow may mean that the market upward momentum is lost and a further correction towards 5120 would be possible.

Buying triggers are only if the Nifty breaks the 5260 - 5270 range. Till that time - don't be bullish.

Lighten your long positions and become bullish on the Kites!!!!... At least the kites will surely go UP!!

Happy Uttrayan !
CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

HDFC Bank .. Caution ! Reversal ahead !

The NIFTY index moved rangebound to negative despite opening strong on positive Asian markets. Keep an eye on 5215!!

One of my blog reader and friend drew my attention to HDFC Bank... It seems we may see some profit booking in this (and other ) banking counter.



After testing the previous high near Rs 1840 the scrip seems to be in the process of making a H&S with the neckline very much near to the current price.

Investors in this stock may become alert and may want to book profit on break below Rs 1660/- (curr price Rs 1710). A minimum down target of Rs 1450/- is likely.

And yes - banking stocks are witnessing selling pressure in upmoves ... Beware ...

Happy trading !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

CNXIT - 3 Black Crows !!

It seems the number 3 is not moving out of my head !! After 3 Idiots ... Its 3 black crows !... Yes, the CNX IT index charts depicts exactly that - 3 black crows - as the Japanese would like to call them...

IT stocks have been in a selling pressure especially since the Dollar broke its important Rs 46 level. A further down move is not ruled out. We shall evaluate USDINR in a later blogpost...

The IT index seems to be 'peaking out' and this was mentioned some time back on my blog (See my blogpost of Dec 21, 2009).



It has reacted from near the indicated resistance level of 5800+... (actual high 5932).

On Candlestick charting, the last three days of fall would be termed as the 'three black crows' - which is essentially a reversal pattern. Upmoves near to 5750 may be treated corrective and traders may lighten their position in IT stocks.. And a break below 5500 should give you the final confirmation of 'reversal'..

Caveat Emptor (Buyers beware)

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

INOX - can become a Superhit!

The huge success of "3 idiots" is interesting from the financial angle. The box-office collections are supposed to be in excess of Rs 250 cr... Wow - many companies don't even have this much of a turnover!! let alone profits ! This made me glance at the beneficiary of this boom - the multiplexes.

MEDIA is one sector which I have always thought of as one of the most undervalued sectors in recent times... Especially when we talk about multiplexes like INOX Leisure... With 'Bollywood' movies putting one after the other hits, fundamentally things should be quite good...



Well but as good analysts let us track what the price says ... There is a clear break out from a 'triangular' formation and I expect that the current upmove should continue - even if markets consolidate.

Buying near to Rs 67/- with a Rs 10 stoploss whould give us an upward potential price of Rs 90 and Rs 110/-..

The next time you watch a blockbuster - think of your Inox stock !!

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

NAT Gas - ready to 'FLAG off'

The stock markets are nervously moving upwards with more activity in mid-cap and small-caps (Ummm!!).

The commodities and metals on the commodities exchanges are in fact witnessing activity. Aluminium touched a yearly high while copper and zinc are nearing theirs. But one 'commodity' which seems to be 'fascinating' me is NAT GAS. Even the international price charts as also the price movements on MCX seems to be interesting.

Currently it seems that the prices are 'taking rest' in the form of a 'FLAG' and a break out above the flag pattern should provide the next push upward to prices...



It is also changing the overall trend (which was analysed a few days back on this blog).

Buying above Rs 280 should give a targets near to Rs 310 and Rs 330+ .. Keep a stoploss near Rs 262 initially...

Happy trading !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

Tata Comm - worst seems over. . .

Yesterday's stock - Essar Oil - saw a good momenutum today and was up by more than 5%. Presume my blog readers have benefitted from this.

Another stock which seems to be 'bottoming out' in a bullish market is Tata Comm. The scrip tested its long term support area of Rs 335/- recently and has rebounded with good volumes in last couple of days.



Expect a further upmove towards Rs 410 and then Rs 440 in coming days. Keep stoploss at the crucial support of Rs 335/- in any case.

Advanced indicators too are showing signals of revival.

Happy Trading

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

Essar Oil ... ready to boil ?

Here' wishing all my blog readers a great 2010!! ... (like the FIIs I was out of office in the last week of Dec, having returned in the new year!)

Midcap stocks are finding favour and are witnessing good operator activity. One of the few scrips which becomes erratic (and hence operator favorite) at times is Essar Oil.



The stock is currently consolidating near its long term moving average and one should expect a sudden 'burst' in the price and volumes in the near future.

Consider a close above Rs 149 as the initial entry point and add on break beyond Rs 162/-. Target should be at least 25% above initial entry. Major support exists at 130/- which may be used as stop. ...

As for NIFTY , the break out of 5200 has still not created fireworks (which it should have done). We still keep our fingers crossed!

Happy trading !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.