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.