Technical view by Nooresh

Can Sensex clear out 10050-10400 band !!!..

Sensex Technical View :
As we have seen in the previous chart posted that the resistance for Sensex comes to around 10050 /10400. The earlier channel line and short term trendline comes in this band. A move beyond 10400 on sustained closing for a week would be a breakout in near term.

Such a move needs to be supported by very heavy volumes which is still not the case and over the next 6-8 sessions alongwith an upmove one will need to keep a watch on change in volumes to confirm a breakout otherwise it could be a whipsaw also.

The long bias remains till 9500 is maintained on closing basis. Continue to trade stock specific with trailing stops.

Stocks to watchout for :

Review : Ranbaxy moved up to 250 + , Balrampur , GMR infra slowly inching up. PFC sideways. Of the high rise picks Triveni , Suzlon , Sintex and Central Bank all moved up 5-10 % or in short term giving trading opportunities.

SATYAM !!!!!!!!!!!!!!!!!!!!! 120 to 184 ...
The view was clearly mentioned that the stock is a good risk -reward bet at 140-110. The calculation was simple at sub 140 the amount of cash on books = mkt cap !!!. which implied a 2bn dollar company for free . This clearly was an opportunity for 20-50 % reward which has been proved and the risks involved were also looked into.

Suddenly all the news channels, analysts who were speaking of the worst to happen with the stock are blasting possibilities !!! ... Our target of 50 % is over and advise is to book 70 % of holding at 175 odd levels. Rest is bonus gains.
Hope readers used the view.

The stock has not given much of a bounce back since October lows and the range has been 400-480. A sustained move beyond 482 could tgt 505-535 in short term.

Seems a small cup and handle pattern in daily charts. Resistance around 480-490. Sustaining abov 480 should target 515+ levels. The volumes are low so a confirmation of breakout would need increasing volumes.

Larsen and Toubro resistance around 845. Colgate 415 . IDBI 72. IDFC 72 are levels above which the stocks could turn positive in short term.

Speculative picks for short term Risk 5 % tgt 15 % :
FSL , NIIT , Arvind Mills.

Market Observations and Thoughts :

In the last few weeks i have been bored of discussions about how good or bad the Oct-Dec quarter results would be. Apart from the divergent views on how bad or good the results would be. Also the prediction of whether the worst in results is yet to be seen in Dec-March quarter etc.

One of the major concerns discussed is about inventory losses , guidance , interest implications, debt and etc etc. I am too inexperienced or qualified to be talking on the above but have a different way to look at things.

The most important thing i would be looking in for signals is not the company results but shareholding patterns. Some of the important points to note would be increase in promoter holding , FII holding , MF holding , strategic investors or whether there has been a decrease in the same.

There is an old saying which says markets look two quarters ahead and the fundamental consensus is Oct -March period is going to be the worst ( how much no one knows ). But the above points would indicate whether the promoters , FIIs, MFs and others ( i.e money ) believe the company would pass through this phase or not.

Hope to receive comments and inputs from all readers as its difficult to be looking into every bulk deal or insider trades or shareholding patterns , disclosures etc.

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Article by Nooresh Merani

Nooresh has written 2531 articles.

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