Technical Analysis of Indian Equities by Nooresh

Possible Inverted Head and Shoulders Negated – Will it head to 17300 or lower?


Sensex Technical View:


Yesterday we had discussed a possibility of an inverted head and shoulders in making which as suggested to be WISHFUL THINKING ended up being so.

The test of 200 dema and a subsequent fall confirms the continuation of the downtrend.

The volatility index has broken out and is headed to 30-32 though i do expect this vols will go down on budget day. But seeing that the market is too light and drops could be sharp as it was today i would wait and watch, take a call only after budget.

In the last randomn thoughts and before that have been mentioning that 17300 could be tested or may even be broken.

According to Elliot Wave there is one last wave down left before a strong bounce back comes in. Although it can go all the way to 4800 as per possible wave counts.

Now on the positive side the next fall may stop either at 17000-17300 or go all the way to 16100 ( Worst case scenario). After todays drop any quick drop in next few sessions would ideally create a positive divergence and a good opportunity to bottom fish.

Technically the very strong trendline comes at 17000. But in a down trending market no supports are sacrosanct and can be broken. But one needs to wait for some confirmatory signals after the bottom formation.

So for now next logical supports are 17300/17000 and 16100.


The view remains that 17300 levels could be tested or broken till March end but we may soon be nearing a nice intermediate bottom followed by a steady bounce back.

We would be watching how markets react near 17.3-17k or where this down leg ends.

Ever since 19900/19000 broke have been maintaining the stance of very high cash at least 50% or more. Now the view is investors should get ready to slowly start accumulating quality stocks. Start doing some research to stick to strong quality stocks 🙂

Get Ready but Dont Jump 🙂

Randomn Thoughts :
While going through a simple screener of dividend yield on many stocks the list of stocks showing a possible 3-7% dividend yield the list is pretty long.

Even a large cap stock like Ashok Leyland is at current market price quoting at 3.3 % dividend yield. So any further drops to 40 or lower will take the dividend yield beyond 4%. The stock has been giving 100-150% dividend consistently since 2005.

Many other small cap stocks are almost at 5-7% dividend yield with consistent record of dividends for 5 years.

So is the market creating opportunities to get into defensive stocks if some of these stocks fall by another 10%

Will be listing few of the stocks if markets do fall in coming days. Some stocks which came up Andhra Sugars, Visaka Inds, Cosmo Films, Mirc Electronics came in a quick screening.

Would like more thoughts from fellow readers who do track some defensive stocks.


MUMBAI 5th-6th MARCH 2011


DELHI UNIVERSITY, NEW DELHI.Date: February 26-27 2011(SAT&SUN)



Kazim 09821237002 Asif 9833666151





Article by Nooresh Merani

Nooresh has written 2774 articles.

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{ 20 comments… add one }
  • shivaji February 25, 2011, 00:42

    Hi Nooresh,

    we have seen in 2004 and 2006 index dropped by 25-30% from top and we saw secular bull run there after. Will we see same kind of move after crash which we saw in 2004 and 2006 crash. ??????

    If we go by elliot wave theory then Wave D,E are pending after completion of current wave C before we embark on wave F which is just a zoooooom wave to go all the way to new highs…

    • nooresh February 25, 2011, 10:45

      Hi Shivaji ,

      According to me the Wave C is in progress which has few more legs but i generally wait for a change of wave count to get in.

      Like at 19900/19000 it was a good situation where B was to be over. So now above 19k-19.6k or a faster retracement of few legs will confirm C over. But it has ideal targets of 17000/16100.

  • Mahi February 25, 2011, 02:56

    Here are some more good dividend paying stocks
    Graphite India
    PSL Limited
    Ultramarine Pigments
    Empee Distilleries
    Aarti Industries

    • nooresh February 25, 2011, 10:43

      Hi Mahi,

      Will have a look into Aarti Inds it came into my screener too.

      PSL has been a major underperformer

  • sodhan February 25, 2011, 07:22

    Blue chips like Tata Motors there is huge profit booking as earlier there was parabolic rise.So it is phase of pinning down blue chip parabolas and bring down to a level where vertical rise started.With this liquidity will dry in small caps and they will have time correction may be for two months.Smart money accumulates parabolic down slope so a long period of consolidation is ahead.Smart money scatters nails at bottom to avoid third party touching their domain.I am thankful to you that you are doing your best to make small investor smart.Timing the exact market no body can predict but certain bloggers do provide sufficient hints.A foreign blogger gicharts dot blogspot dot com provided hint before fall and now in latest post has remarked about Tata Motors.With best wishes.

    • nooresh February 25, 2011, 10:43

      Hi Sodhan,

      Yes exitting is a major problem but i still believe this is a long term bull market but next few months wont be great.

  • Mihir February 25, 2011, 08:36

    Thanks Nooresh!!

    For your great posts…when entire market is feeling the gives some rest…

    keep posting


  • SIVA PRAKASH February 25, 2011, 09:05

    What is ur view on infra stocks ?
    can u suggest some good picks


    • nooresh February 25, 2011, 10:42

      Hi Siva,

      I have been avoiding the infra sector for quite long as none of the picks ever worked in last 2-3 years but now it seems pretty interesting. Patel Engineering, GMR infra look interesting

  • Ritesh February 25, 2011, 09:40

    HOV Services will probably have a dividend yield of 10% at 80. But it has a track of only 1 year.

    • nooresh February 25, 2011, 10:38

      Hi Ritesh,

      In dividend history we are looking out for safe and stable cos.

  • sanjay February 25, 2011, 12:56

    some of divedend stocks worth pondering are..
    Samkrg piston
    D&H welding
    dai ichi larkaria
    tn newsprint

  • sanjay February 25, 2011, 13:13

    few more like..
    Blue star info
    dynemic product
    chennai petro

    whats ur say nooresh?

  • Utsav S Churi February 25, 2011, 23:54

    HI Nooresh,
    There is a saying by ” Jab Dard had se zada bhad jata hai…. Tabh uski dawaye banti hai….. What will not kill you will make you stronger………So i think soon we should expect the markets to bounce …….

  • shivaji February 26, 2011, 11:01

    Hi nooresh ,

    Do u see wave D and E or do u see rise like 2006 after current fall to either 17000/16100

  • vineetha February 27, 2011, 12:45

    sir ,
    what is ur view on HDIL ? its PE and book value looks nice

  • Ankit February 27, 2011, 15:44

    Hello Nooresh,
    Thanks for your regular posts. During Diwali you suggested Indage Resturants as one of the High Risk Pick. I got 1000 shares at 9 Rs and it is delisted now. Do you have any news with you to re-list again or my money is gone.

    • nooresh February 28, 2011, 11:01

      Hi Ankit,

      The stock gave an exit at 9 bucks before getting delisted. Me took a 50% hit on the stock 🙁 It was supposed to be a very high risk pick. The company has not adhered to listing agreements. Consider it to be gone unless company tries for re-listing after a few years.



      • Ankit March 1, 2011, 08:42

        Thanks Nooresh 🙁

  • mayur February 28, 2011, 13:05

    hi nooresh bhai ,
    what is ur take on spicejet ltd is it good as a contrarian trade and also about tci finance which went to 129 to 54 again 70
    pls let us know

    thank u


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