BHEL - - targeting 1800+

The Nifty moved up today too as expected. It has got resistance at the short term falling trendline at 4260.

Tomorrow's opening will in all probability be a gap- no marks for that - but which side is a 'million dollar question'!!

Among the various stocks which seem to have found their feet in the recent fall during the past month is BHEL



From the above chart you would observe that there are multiple supports at 1340 levels. The RSI and MACD have also shown positive divergence and i expect some more upmove.

Moving average resistance will be near to the 1800-1850 level and i expect that at that level the positive divergence should get completed.

The stock closed at Rs 1600 and the break out level is at Rs 1615. keep a stoploss at Rs 1490 and exit near 1800-1840 levels

Happy trading !

CA Rajiv D Khatlawala

UNITECH - corrective move ahead!!

{ The recent recommendations of NTPC and PowerGrid have achieved targets , albeit a little too fast than I expected. Hope readers could benefit }

The count down to the The D Day, or shall we say "The 'V' Day", has started. The whole nation's discussions and anxieties are revolving on whether the Govt will succeed in getting the 'Vote of Confidence' or not.

Market participants, who as a group are by nature quite sensitive to such events, are all the more more anxious and also cautious as to the outcome.

The Nifty has been moving up in last two days in the run up for the V Day - as expected and indicated in my blog a couple of days back. Whether my evaluation- that the market should rise before the event and then retrace irrespective of the outcome, proves right , time will tell. Till then fingers crossed !

In the meantime, one stock which has been beaten down and is showing some signs of revival is UNITECH.



It closed at 152/- today and I expect that a break out above Rs 158.50 should give it enough momentum to test levels between 182-195. Consider Rs 140 as important support for any longs

Happy Trading !

CA Rajiv D Khatlawala

NIFTY - expected but impressive move

YES!!!
The move in NIFTY was expected. And those who have already attended my courses or those who track Nifty closely, must have already guessed - Positive Divergence in the Nifty.



This has occurred before the 'No-Confidence Vote' and my expectation is that Monday too should be positive. However in that rise it would be well prudent to book profits and go on the sidelines. Markets, when they rise before an event, usually tend to reverse even if the outcome of the event is positive for it! So be careful. .

Also political events tend to be temporary as regarding the markets. In the overall scenario, it is the economic situation which is important.

The current rise could get terminated before or near 4370-4400 levels. Technically, the divergence will get completed by that time.

I would not want to consider this positive divergence in the Nifty / Sensex as a sign of 'trend reversal' since major trends usually don't change so fast. A correction of a four year rally generally doesn't get reversed in 6 months.

So take advantage of the up move and keep booking profits. As they say "One in the hand is better than two in the bushes"

CA Rajiv D Khatlawala

Power Grid - S/T target Rs 90/-

The Nifty / Sensex rallied well on the back of a weak Crude Oil. You would have observed that Crude Oil has broken the crucial support of Rs 5800/- on the MCX as indicated yesterday. I presume that if Crude now closes below 5745 on MCX we can expect further selling pressure in Crude Oil.

And that is in a way good news for the markets. Most of the traders are literally 'searching' for good news. And I only hope that the Inflation figures - whatever they might be, does not negate the 'Crude' advantage!

One stock which is showing signals of stabilising is POWER GRID. It has closed at Rs 82.50 today and I expect that a break above Rs 83.25 should give short term traders an opportunity of a move to Rs 90-91. Keep stop near 79.


(( Click on the Chart to see expanded form))

On the price reaching Rs 90-91, medium term traders infact can book partial and hold for a rise to Rs 98-99/- with an increased stop at Rs 85/-.

Short term traders with predominantly bullish attitude can take advantage of current movement in many B1 stocks. But remember to exit when it's time, else you may be left out 'holding the baby'!!!

Happy trading!

CA Rajiv D Khatlawala

Crude Oil - Signs of Fatigue? ?

It seems that the stock markets are not in a mood to stabilize. Today when everyone was expecting that the Nifty will take support at 3840 , it broke and fell almost 50 points below that level before recovering back to 3830 on close.On intraday charts, 3880 and 3950 are the key resistances while 3798 is the support.

CRUDE OIL fell yesterday by more than $5. On the MCX , Crude Oil contract closed just below 6000/-. There is strong resistance at 6300+ levels while the key support for Crude now is at 5800/-.



A break below 5800/- is likely to lead to further selling pressure. Retracement target itself is initially at 5200/-.

Also if you observe on the chart, there is negative divergence on the MACD and i expect that a break below Rs 5800 will 'confirm' this MACD divergence.

Investors who track Crude to get a direction on the Stock market may now get worried only and only if Crude breaks above Rs 6325/- on the MCX.

It seems that 'the price of crude' is now tired of going uphill and needs some rest ('correction')

Happy observing!

CA Rajiv D Khatlawala

Revisiting Dollar Rupee . . .

What a sell off !!! The Nifty and Sensex tanked again by about 5%. Throughout the day there was sustained selling pressure and it looked likely that corrective rally may not be sustained.I had indicated crucial support at 3965 and the Nifty opened at that level and continued to move downward.

Through out the day , I was constantly watching the movement of the Nifty vis a vis the Dollar Rupee and they were clearly moving in opposite direction. The Dollar rupee opened the day at 43.08 and steadily increased to 43.29 ; as the Nifty / Sensex continued to fall during the same intraday period.



Sometime back I had analyzed the Dollar Rupee and indicated higher level on break out above Rs 43/-. The Dollar rupee seems set to touch 43.70-43.75 level in the near future (which may again not be a good sign for the stock markets).

However I expect strong resistance / selling in Dollar rupee at 44/- which is it's 61.80% retracement level as well as previous few quarters support level.

Incidentally my first target of GOLD (on MCX ) of Rs 13500/- has been surpassed and it is currently quoted at 13650+ (partially helped by a rising dollar-rupee)

I think we should watch our currency closely for more signals !!

CA Rajiv D Khatlawala

DLF - Inv H&S in the making ??

The Nifty moved as expected. Upmoves are getting resistance. The trading range is broadly 4150-4180 and 3980. If you have observed it is a channelised upmove which usually does not sustain.

In the meanwhile, one stock which seems to be hammered out of proportion is DLF Limited. The relentless fall in the stock a few days ago prompted me to check whether sentiments have gone extreme - which they usually go.



The price movement for the past few days in the stock is suggesting a very strong possibility of an inverse head and shoulder formation - which is in fact a reversal pattern.

If this is true, the stock may take support near to 420-430 levels in order to create the second ('right') shoulder. The neckline break out is at 490/- and a break beyond this should give us a target of 590-600/- in the medium term.

Volumes (not shown in the chart) are also picking up heavily at these lower levels and rather than indicating selling pressure, they may actually be suggesting us 'accumulation'!

Keep this stock on your radar !

CA Rajiv D Khatlawala