MRPL - a technical report!

Analysis by CA Rajiv D Khatlawala
Author of "How to profit from technical analysis a beginner's guide"
Published by Vision Books www.visionbooksindia.com

Technical Evaluation of MRPL as of Feb 12 2008 (Closing price 81)

The MRPL stock which was in a rising trend since end-Oct 2007, touched a high of 149 in early Jan 08. It consolidated a lot between 140 and 120 and subsequently a break below the support level of 120/- gave early signal of weakness.
In the post Jan 21 fall, the scrip is currently testing its 200 DMA placed at Rs 80/-
The scrip is currently in negative territory based on RSI and MACD (shown on the chart) as also based on the longer term RSI (not shown). The scrip has crucial support at Rs 70/- and a break below this level will indicate further weakness.

On the upper side, the longer term RSI along with other advanced indicators (not shown here) are likely to signal a ‘buy’ on price breaking the Rs Rs. 93/-, after which the scrip should test Rs 122 levels.

Currently it is better to take a shorter term view on the stock with upside target around Rs 122 until a clearer trend emerges.

Current recommendation

Current investors may hold with a stop loss at Rs 70/-

Based on above analysis, a fresh entry can be contemplated only on a break above Rs 93 with a stop loss at Rs 73 for a minimum target of Rs 122 and then Rs 128/-.

*** Investors / traders wanting technical reports of scrips of their choice can email us at pushpdin123@hotmail.com . Cost per scrip Rs 400/- . You may also subscribe on monthly basis for 10 scrips of your choice along with 5 scrips recommended by us. The monthly subscription is Rs 3000/-. ***

CA Rajiv D Khatlawala
Pushpdin Portfolio Advisors

Does SBI have a 'rounding top' reversal signal?

Analysis by : CA Rajiv D Khatlawala
(Author: "How to profit from technical analysis- a beginner's guide" published by Vision Books www.visionbooksindia.com)

Is SBI giving a 'rounding top' reversal signals ??

Consider the daily Chart of SBI the banking sector leader

SBI has been one of the few stocks which was not heavily affected by the recent turmoil . where many other stocks lost more than half their peak values .
This led me to further evaluate the stock in detail for considering an entry. But the price pattern which emerged made me have second thoughts

1. If you observe the chart there is a clear rounding pattern emerging. The pattern which started mid Oct 2007 made higher highs in the Nov-Dec rally but the newer highs were not significant as is usually the case with rounding tops... Thereafter it made a lower high which strengthens the pattern further.

2. You will also observe that the volumes have been falling as prices were rising.

3. Usually, a typicality of the pattern is that pries tend to move towards the 'starting point' of the rounding pattern (see marking on the chart).
(Readers may further read in detail about the rounding pattern in my book "How to profit from technical analysis - a beginner's guide" )

4. The rounding pattern will now be negated only if prices break the resistance level of Rs 2450/-

Readers may want to track the stock based on this analysis ( or further analysis of their own)

Your feedback is welcome

CA Rajiv D Khatlawala

The Anatomy of a Crash- Jan 2008

Analysis by : CA Rajiv D Khatlawala - Author of "How to profit from Technical Analysis" ( Publ Vision books : www.visionbooksindia.com)

THE ANATOMY OF A CRASH

While there has been a lot of ‘post-mortem’ of the heavy crash in the stock markets in the third week of Jan 2008, there were very few who could anticipate such a fall. But markets were agog with statements like “We always knew it was coming” or “A correction was long overdue” and so on.

Before the crash , most fundamental analysts were trying to give a ‘cause’ to the ‘effect’ of rising indices and justifying higher prices with repetitive arguments like the India growth story, decoupling of Indian markets, minimal effect of US sub-prime concerns et al. However, as a caveat, every one did agree that they were not crystal clear as to why markets were rising and that too so fast.

It is under such a circumstance that the technical analyst’s role assumes prime importance. A major factor being the ‘technician’s’ rational approach to the price movements- he suggests what the price charts depict.

While many technical analyst were surprised by the speed of the fall, seasoned technical analysts had enough indications of an impending fall of about 1000 points in Nifty ( about 3500 points in Sensex).

Many might argue that it is easy to give reasons after the fall. Herein we will try to evaluate whether or not the technical analyst had advance warnings – which anyone knowing the basics of price chart analysis would have easily known (the difficult part is believing what the charts tell).

Let us first look at the Daily chart of the widely followed NIFTY Index.

1. The move of the Nifty from mid-October to mid-Jan was almost in a channel – the index made higher highs and higher lows.

2. However the first indication of an exhaustion of trend is when the new highs which are made are not significant. This indicated the analyst that the market has to struggle hard to create a new high.

3. Secondly, when support trend line is drawn on the chart (joining the higher lows), one can see that two days prior to the actual fall, the support trend line was broken (point B marked). This, at the least, told the technical analyst that he must not be long in the index and index heavy weight stocks.

4. Thirdly the support line of the RSI (shown in the lower panel of the price chart) was also broken (point C marked) giving a ‘confirmation’ of the breaking of the trend line on the price chart.

5. This was further again confirmed by the crossover of the 5 day’s moving average and the 21 day’s moving average, two days prior to the fall.

6. Also during this entire movement, the MACD suggested a negative divergence. You are well aware that a negative divergence is a reversal pattern and indicates that the price action and indicator action are not in conformity, creating a doubt on the recent price moves. The negative divergence was also confirmed when prices fell below the support trend line on the price chart (Point B marked)

Chart courtesy : www.icharts.in
Daily Chart of Nifty

CA Rajiv

Technical Calls - Intraday and Dlvy based. . . .

Dear Friends,
Pushpdin Portfolio Advisors is proud to announce the (re) launch of it's INTRADAY AND DLVY BASED recommendations. The details of the services are as follows :

Services provided

1. Providing of Intraday calls on active stocks and stocks in derivatives segment. Typically there would be about 5 intraday calls per day
2. Providing online support during market hours to subscribers. Subscribers can enquire about their other intraday positions / other positions and replies will be given online.
3. Delivery based recommendations. Typically in a week there would be about 3-5 delivery based recommendation.

Subscribers may note that these recommendations are mainly based on technical analysis.

Modalities:

1. Rajiv D Khatlawala will be online on yahoo messenger during market hours for the above purpose.
2. Each subscriber can have only one yahoo ID added.
3. Any queries from non-subscribers will not be replied.
4. For delivery based queries, please expect replies within 24 hours.

Subscribers are suggested to adhere to the various price levels indicated in the recommendations so as to achieve consistent profitability.

Charges

Subscription charges per subscriber per month will be Rs 4500/- payable in advance. Subscribers paying quarterly in advance will pay only Rs 12000/- (instead of Rs 13500/).

Cheques / Demand Draft may be drawn in the name of “Pushpdin Portfolio Advisors” payable at Baroda only.

PUSHPDIN TEAM

Book on Technical Analysis By CA Rajiv D Khatlawala

Dear Friends,
You will all be pleased to know that I have written a book on technical analysis- "How to profit from technical analysis - a beginner's guide" which is published by Vision Books , New Delhi and is available all over India!

It is infact one of FIRST books exclusively on this subject by an INDIAN author for the INDIAN investor....

It is an beginner's guide to this exciting field written in an easy to understand language and a major USP of the book is that it gives the reader a STEP-BY-STEP methodology to analyse and approach any security! This is perhaps attempted for the first time !

Do provide me your feedback on the book

CA Rajiv D Khatlawala

Pushpdin Launches "Technical calls and guidance" service

Hello Friends,

I am pleased to announce that my firm 'Pushpdin Portfolio Advisors' has launched (in fact re-launched) the 'Technical Calls and guidance' service effective Jan 2008.
Subscribers will get Intraday trading calls and also delviery based recommendations. Moreover they can also query on any stock during market hours and it will be replied instantly.

For more details on the service email us at : pushpdin123@hotmail.com OR pushpdin@mail.com

CA Rajiv D Khatlawala