Budget- Boost or Fizzle?

I had prepared myself assuming that the FM will dole out some interesting stimulus roll back plan along with a direction to the economy. Well, I presume most of you share my dissappointment.

Mr FM, everyone can target a lower fiscal deficit and a higher GDP.. 'bolne mein kya jaata hai?' How will you achieve it is the key issue. And what about Inflation???

But the FM did one good thing - he reduced the tax outgo of most of us. For that I must thank him.

Well the market's reaction was more or less predictible. The moment the FM said that the fiscal deficit projected will be 5.5% , the markets starting the fireworks! I only hope the 'Market' has considered the fact that the Govt has conveiniently changed the Base year for computing the GDP to 2004.



Technically nothing much changed today except for the intraday volatility. The level of 4800 Nifty now becomes crucial for the markets - If you are long in today's euphoria , keep that as your SL.

Happy Budget crunching!

By the way, in case you happen to be in and around Baroda, I have organised a presentation on "Impact of Budget on Markets" tomorrow (Sat) between 4 to 6pm at the Academy. Please register your name as there are limited seats.

CA Rajiv D Khatlawala
ValueTrade Academy
www.investogyan.com

Will Midcaps turn MadCaps?

The Nifty movement was understandably range bound with much higher scrip specific moves. Heavyweights like Reliance and Tata Motors among others, saw some selling pressure.

The Economic Survey , prima facie, seems to be aiming much higher. The Government's projections of GDP and other figures are optimistic. Whether these will be achieved is another question. However in tomorrow's budget I may want to look out for indications on how the FM plans to control inflation and at the same time withdraw (if at all) the stimulus. Tight rope walking, we may say.

One observation in the past few days is that midcap stocks are under performing and technically weak. The CNX Midcap index seems to be dangerously poised and a close below 6950 for the Index could surely increase the selling pressure...



Most of the investors have a high weightage of Midcaps in their portfolio and it may be necessary to book profit where available and reduce exposure if the indicated level is broken.

Keeping my fingers crossed and ears open for the FM

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.
www.investogyan.com

RCom - Lines disconnect !

The Nifty remained undecided because of and inspite of the Railway budget. Nothing great came out of the Railway budget and I only hope something similar is NOT repeated by the FM....

Concerns over China and Greece are growing and I presume that after the Budget event , investors (read FII) attention will quickly shift to the world happening...

Telecom stock were weak today along with banking. R Com has infact broken below its few months low of Rs 160 and it seems that the fall would continue in days to come if we go by the advanced indicators (not shown here)



Investors may want to 'disconnect' from R Com for some time and re-evaluate their positions - Yes I know investors would be booking losses - but sadly that is what the prices are suggesting.

Keep your fingers crossed for more such 'break downs' !
CA Rajiv D Khatlawala
ValueTrade Academy
www.investogyan.com

Renuka Sugar- getting Sour !!!

The Nifty remained directionless today as markets await the Railway budget tomorrow. The market's internal structure seems to be weak - even though the Nifty is giving positive close, the Advance to Decline ratio (AD Line) is highly negative. This indicates extreme caution.

Among the sugar counters, Renuka Sugars has been in news recetnly on account of its proposed overseas acquisition. In fact the market's reaction to overseas takeovers by companies like Bharti Airtel and Renuka Sugar suggests that it may not be the correct time for Indian Companies to go 'shopping' abroad. We may as well have a hidden market message here.



Renuka Sugars stock seems to be at a highly crucial level which has the potential to decide its long term trend.

A break and close below Rs 170/- should be a signal to long term investors in this stock to exit and take profits. Traders too may want to encash the down move. On down break out, expect sub-Rs 140 levels in the coming days.

Happy 'budget' watching

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.
www.investogyan.com

Crompton Greaves - much to grieve about!

The NIFTY opened quite strong above 4900 but gave to the gains after middle session to close almost near the opening. Market players are settling trades intraday and it seems the most heavyweights are under pressure. Keep an eye on sub-4800 close...

Among the stocks which has recently re-tested their previous (2008) highs is Crompton Greaves.



The scrip has got resistance from the 2008 high and is since falling. At the current price of 400/- it is becoming weak. A monthly close (Feb) below 380 would give strong 'book profit' signal to investors.

Investors in this stock may book profit and wait for a down move towards 345-350 initially and then Rs 320/-

Happy Profit booking !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd. www.investogyan.com

NIFTY - weekly confusion!!

The Nifty did a roller coaster ride today much to the delight of intraday traders (i am sure my participants would have got both the opening downmove and the intraday upmove)

NIFTY has closed the week as a doji (almost), which was more likely. In fact ahead of the next week's budget, market players would surely become nervous and tend to do more trading than carry over positions.



Asian indices - especially Hangseng and Nikkie have closed lower than 2% and it seems the next week's opening for world markets may be subdued.

Our markets correlation with Hangseng is as high as 97% and that makes a case for worry... (by the way - My monthly newsletter gives details of this- Have you read my monthly newsletter ? you can download it from www.investogyan.com)

The Nifty weekly chart indicates extreme cautionm and one should become extra cautious next week if 4755 get broken.

Happy trading !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.
www.investogyan.com

RCF.. Budget boost ?

One sector which becomes vibrant and active as the union budget approaches is the Fertilizer sector. For past many years, farmers expect more and more liberal policies from the government and with world wide food problems agriculture not doubt gets importance.

RCF is one of the more active fertilizer counters and has given a positive closing today near to Rs 106



A break and close above Rs 110/- should trigger further buying ahead of the budget and one can expect a jump of about 15-20% in coming days. Keep stops near to Rs 95 levels.

Most other index weighted stock were showing signs of tiredness and one should be very stock spefici in trading for the next couple of weeks.

Happy trading !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

USD INR .. something's cooking?

The Nifty opened near its daily chart resistance and more or less remained sideways. Be careful with longs at current juncture and book profits. . . (One in hand is better than two in the bush)

Well, long time I have not taken up USDINR on my blog, though I track it almost everyday.

It seems that the USDINR is on the verge of something big. Why ? Well please dont ask fundamental reasons..



Technically, the level of 47/- is now taking up further significance. A break above 47 should be treated as a 'neckline' break out and a sharp upmove towards 49+ levels cannot be ruled out. Currently it seems to be in the formation of the right shoulder.

Whether this really is a neckline break ... we shall know in next few days. But I presume one thing is clear, be careful before the budget... Post budget we will get good directions...

Happy trading

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

Bharti Airtel - Will the support Hold ?

The Nifty gave a good intraday move and i am sure the intraday trading community had a great time.

Bharti Airtel was one loser stock in today's positive market. It is now just near it's multi month support of Rs near Rs 270/-. The ZAIN take over is not being taken positively by the markets and it seems that Bharti wants to sustain business growth and profits by 'inorganic' growth rather than organic one.



The volumes have been huge at the support level and a break and close below Rs 265 should be viewed negatively.

Keep a close watch on other telecom operators as the sector itself may go in for a downward re-rating.

Happy trading !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

Reliance Capital- erosion ahead

The Nifty did not go beyond the strong resistance of 4845 and has closed near to 4800. Watch the 4770 level in intraday.

With Inflation in an 'uptrend' at 8.56% in Jan, our fears of higher (or maybe hyper) inflation may come true. Expect some drastic changes in the bank interest rates on upside.

Reliance Capital is a stock which has been in a down move for some time and the current formations on the charts too suggests that the selling pressure is likely to continue further.



The price charts indicate a break below Rs 740 should trigger a sell off which can take it to sub-Rs 700 levels in coming days. Keep a stoploss near Rs 768.

Happy trading

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

EURO USD - short term rebound likely!

The Nifty gave an upmove backed by the positive world markets especially the emerging markets. A good corrective rise , is the best we can say right now.

Long time I have analysed and written on the foreign currency front. It seems that the EURO-USD is getting oversold and a corrective rebound towards 1.4150 is now due.



A break above 1.3830 should trigger this rebound.

Have my blog readers spotted any specific pattern (hint: Candlestick pattern) on the Euro USD chart attached?

I shall like to have your feedbacks(especially those who have done my workshops)

Happy (currency) trading

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

IOC...FUELing up!

The Nifty reacted as expected. It tested the range of 4820+ indicated yesterday and has closed weaker.

The news of fuel price rise expectation saw some activity in oil counters. One such stock which is positive in the oil space is IOC.

IOC price chart suggests that a break above Rs 324 should trigger further buying. Traders and investors may keep a stoploss near Rs 300 for the time being and add further on a close above Rs 328/-.



Target expectation is Rs 375-380/-

Happy stock picking in a weak market !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

Nifty - hesitant move

Nifty , though it moved up today, the upmove was one of caution. There was clear hesitation from market players to go aggresively long.

The Nifty is likely to get resistance at 4820-4845 levels and now after today's close I shall be watching the 4750 level closely.... Break below this may give us (hopefully) the last push towards the important support level of below 4600 in a few days.



At that level (sub 4600) I would cover my medium term short sell positions and wait / go on sidelines.

Now I have to rush for my seminar today . . .

Happy trading

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

Nifty - divergence ? Well .. not convincing !

The Nifty movement of today again was a great one for intraday traders. But many blog readers / participants are asking me about the RSI divergence that they are seeing on the daily Nifty charts.

Well , I perception is that a divergence should have the characteristic of a panic fall after which things should look up again.



Well, according to my analysis (which is based on certain advanced indictors- not shown here) , the current divergence on RSI on daily price chart of Nifty may be one which may turnout to be a false one.

Corrective upmoves / short covering is being witnessed in intraday, which is not being sustained. However the Nifty being near its 200 EMA is the only 'hope' for bulls!.

Long positions must have stops placed near 4725.

A close below 4700 now should suggest further weakness..

Happy (intraday) trading !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

NIFTY - Breakout Gap !!!

With today's market fall , I was reminded of the nursery poem "Humpty Dumpty - we all fall down!!"

Well, a bad close to the week with the Nifty closing today at 4718. But for my blog readers - it was nothing new!! ... We were all expecting it since 5100!!!!

But the Nifty chart today, has created what is a rare gap pattern called 'Break Out' Gap. (for definition of this gap please refer to my book )



Now if Nifty does not try to fill this gap and it breaks the low of 4692, the break out gap will get confirmed and a further sell off cannot be ruled out.

Incidentally you may have observed the movement of HangSeng ... The rounding pattern analysed a few days back is nearing its target of 18500 nearabouts.!

The world markets are nervous and big players are using every opportunity to exit. Be careful before buying aggresively.

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

Yes Bank - NO PLEASE....

The Nifty and it's 'movers and shakers' are surely playing 'roller coater'! Once again a good day for intraday traders (especially those who have attended my workshops on intraday trading)

Well, watch the 4800-4785 level.... break below these should suggest ending of the current 'sideway' move and resumption of the down move....

Banking stocks have been recently good short sell candidates. One stock which seems to be making 'topping' formations is YES BANK. After making multiple tops at Rs 280/- levels, it has started weakening .



It has closed at Rs 242 and now a break below Rs 237 should trigger a sell off further down. I will not be surprised if it tests Rs 200-205 levels in the short to medium term. Upmoves will face strong resistance near Rs 256-260/-.

Investors holding the stock may say 'NO' to YesBank for the time being!.

Happy (day) trading !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

FAME - A Blockbuster!

The Nifty gave a rally backed by world markets and in the process recovering what it lost yesterday.. As I commented yesterday - a great market for intraday traders!

One of the early morning news today was the Inox take over of Fame Multiplex. The 'consolidation' in the Media industry seems to have begun - and yes it remains one of my favorite sectors!.

Many people asked me whether they should buy INOX... Answer : for long term yes, but for shorter term better to concentrate on Fame. ...

The Fame price chart is surely interesting and also revealing. In fact the price chart reveals that the take over announced today was already known to 'some' players much earlier. But alas , our regulators don't know how to 'read' price charts!



The Fame price chart indicates buying on a break above Rs 48 with a risk of Rs 10/-. The target based on technical computations should be 65 initially and then near to Rs 80+ levels.

Not a bad trade .

Happy trading !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

Ranbaxy - A bearish candlestick pattern!

The Nifty tested the indicated resistance of 4940+ levels and retraced heavily from that level to close weak. The mood of the market is clearly negative. This is a great market for Intraday traders !

RANBAXY which was in limelight some time back, has been in a dwon move for some time. And after stagnating near recent lows, the scrip has formed a pattern called 'three falling method' in candlestick terminology. This is a bearish 'continuation' pattern.



This would suggest further weakness in the scrip especially on break below Rs 430/- - in which case it should restart the falling momentum speedily.

I would not be surprised if the stock tests Rs 380 near about levels in the coming few days. !

Happy profit booking !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.

New currencies for trading!!

The NIFTY moved as expected - just short of my corrective rise target of 4940. May be that will come tomorrow - if President Obama does not spring surprises in today's US Budget speech!! Short term traders should book profit at higher levels.

Friends, I am sure you all will be delighted that you can now trade in three more currencies - EURO, YEN and GBP!! Now therefore you can become an international trader!

I took this chance to check the Euro-INR Chart. Well I only wished that the Exchanges would have introduced Euro Futures a couple of months back - in the month of Dec 09.

That was a great opportunity for us to sell Euro at near Rs 69/- levels with targets of Rs 64 - 62... But the Excanges have introduced them today (1-2-10) when the Euro is already trading near 64.50...



Well, I presume we may now get an opportunity to buy it near to 62 levels for a corrective bounce back... (Incidentally , the Euro weakening against major currencies , especially USD, is because of a fear of default by Greece.)

Now we have more securities to track and trade and as technical traders we are only happier.

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.