Sensex Technical View :
The drift in Sensex continues and has touched 8316 on the lower side which is just below the channel. As we had discussed yesterday in such a correction markets can also correct 80-85 %. So around 8250 would be a stoploss level or a trigger level to watchout for in next few sessions.
As shown in chart yesterday that markets could head towards 8300 -8500 zone in this drift.
The next big question is whether 8250-8500 will hold on for closing basis. With the time point of view check this chart we have seen a counter phase or bear rally last for 30-40 sessions or around 4-8 weeks. This pattern has been followed in previous two lows. A negation of such a pattern would lead to an uncalled situation which is not expected as of now.
Till we dont break above the upper trendline of the channel pressure would continue to remain on higher levels. The strategy yet remains same to react then to predict and keep patience with taking quick trades on either side.
Some of the calls in client recommendations :
Nifty 2900 call stop hit .
Chamble 37 odd stop 35.7 hit .
DLF 226 to 238.
Ibull real 103 to 109-113.
Hdfc bank 890 to 850 and hit 810 too.
Bharti 605 to 575.
Stocks to watchout for :
As said 2-3 days back HDFC ltd and HDFC Bank could be pivotals for any market move. These stocks broke Oct lows badly and were actually the most stable ones now. Still looking weak on charts unless they bounce back 10-15 %and sustain higher.
Bharti Airtel does 575 as expected. RCAp has come to 420 start SIPPING at 380 .
In a bounceback would expect pvt bankin , psu banks to bounce back sharply so traders with long bias shud keep a watch on these.
As of now many stocks are close to Oct lows and some have broken below. Technically none of the factors have turned positive yet and the approach now would be to buy on the way up maybe 10 % higher from lows but in comfort. So fresh stock trades would be initiated in the day.
NOW ON IF POSSIBLE WOULD BE SENDING SoME UPDATES VIA SmS regularly.
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Market Observations and Thoughts :
The markets have suddenly turned their head around and left a lot of people gasping for breath till they understand the old days are gone. The reaction below 11k is clearly an indication that economic and fundamental situation is more worse then i had expected some months back at 16k exit. Although the bottom up strategy worked at 12.5 to 15.5 k move we got stuck at 11k odd last time round and markets went to 7.7k . Fortunately we got a chance to exit half or more of the stocks picked at 11k-12k as they bounced back faster ( chamble , idfc , tata chem , rolta, reliance etc ) while others collapsed ( ifci, core,karuturi , kalpana , rcom the lesser allocated ones n small caps ).
At the same time we could take opportunities to recover some through 8k to 10.5k move ( hindalco, tata steel , boi , glenmark ) followed by that was few short n long trades. So all in all we did get a chance to keep ourself in a better position then worse.
So what next.
The financial markets all over the globe are in problems and there is uncertainty which may remain till Dec/Jan. Although Sensex is at 8k in worst case it could go to 6k only if something unusual comes up yet again. But from here its more of the time wise pain then price wise and we can sail through it as we are more on cash ( if u exitted at 16k and partly stuck at 11k as our view was ).
Although prices are at mouth-watering valuations but they seemed the same at 15k /12k /9k also but have continued to go down. The best strategy is to trade the moves rather then going with buy n hold method. Strategy we are deploying now is to buy a little higher from the lows but in confirmation of a reversal or just continue to take quick trades either short or long till that comes.
All in all Trade the moves up n down if you are quick and able enough or just wait for more clarity and start buying on the way up and book profits on 25 % + gains and review the situation after Dec/Jan which is another important time zone as was discussed months back that Oct and Dec /Jan are important economic low zones. I continue to feel that March-May or later we would see a new though process come.
Hope for the Best prepare for the Worst.