Technical view by Nooresh

Dow Jones, S&P 500 and Nifty all set to get into panic bottom. If bought hold if not Buy today.

Nooresh — Fri, 18 May 2012 03:39:43 +0000

DOW Jones — Nearing the 200 day moving average and getting oversold. Supports at 12000-12200.

S&P 500—Supports seen around 1280-1270 levels.

Nifty — Highly oversold. Further fall to 4600-4550 is also possible but it is a time to just sit back and relax with your holdings or buy more.

Personal View:

First to start with had a view that 5100 would hold and we may breakout above 5600 ! . This has fallen flat on my face.

Recently did expect 4950/4800 to hold and that is taken of and we may even end up at 4550-4750 band in the near term.

Although have got this move totally wrong and got to accept it when you do so. Quite a lot of stocks are down to seriously cheap levels but as of yesterday we are totally invested and may get leveraged here.

Sitting at a cut of 15% notional is very difficult but we need to go through this pain to enjoy the gain later.

Sentiments are at the lowest – The world almost ended in 2008 and a new rally started in 2009 out of nowhere. Will not be surprised by a bounce in June and big rally ending into the year from September to December — Yes very difficult to fathom it but will stick my neck out.

On the simple p-e basis we are quoting at 12-13 times forward earnings , Market cap to gdp ratio and many other parameters are close to December levels. USD-INR is above dec levels ( i thought it would not go above 52)

All in all bottomline – Investments made at 5000-4600 will hurt you for quite some time but will get relief in June and a good gain by december.

Happy Investing,

Nooresh Merani

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Stocks at Support Levels.

Nooresh — Wed, 16 May 2012 10:52:57 +0000

Below is a list of stocks with their charts at support levels.

Download the file from here – http://www.analyseindia.com/analyseindia/readPost.jsp?postid=166

Happy Investing,

Nooresh

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Bank of Baroda and Hindalco – Watchout for bottom fishing

Nooresh — Tue, 15 May 2012 18:30:20 +0000

Bank of Baroda — One can look to slowly accumulate.

Hindalco … A good trade would be above 121 in momentum.

On the index continue to look for 4800 as a review point and 55 USD-INR. Sentiments are terrible, pessimism is at peak. Good setup for a rally in June.

Happy Investing,

Nooresh

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Nifty – RSI at sub 30. Highly Oversold – Bottoming out in next few sessions.

Nooresh — Sun, 13 May 2012 14:28:04 +0000

-> I have just plotted Nifty with the RSI since 2007 and the various bottoms.

-> As per this the general market characteristics is as follows

a) RSI – 26-29

The market starts getting oversold around 26-29 band and either it reverses right away or makes another bottom in the range of 50-150 points when it first hits this band with a positive divergence. The reversal is very sharp and goes up by a good 5-8% at least.

b) RSI – 20-25

This happens very rarely and in extreme panic conditions with a very High Option Volatility ( India VIX ) and in cases of very bad global conditions or margins and overall fear.

RSI did closer to 20-25 band in January 2008 ( two lower circuits ) , October 2008 ( Lehmann Panic and Global Crisis ) , August 2008 ( India Vix at 45 and global panic ).

So if we look at the current 28.8 it is very close to the first type of bottoming case. Also the India Vix is at 20-25 levels indicating less fear. Global Markets have not panicked and are closer to recent highs.

This indicates over the next 3-5 sessions or maximum 2 weeks we may either reverse from 4880-4920 or make a new lows with a positive divergence.

Although its generally a difficult thing to timing the bottom and we also go wrong most of the times by a good margin. In our recent report on USD-INR and Nifty had mentioned as 5000-5050 to watch for and buy with a downside risk to 4900-4950.

Now we are pretty close to it and simply put we continue to keep the bullish stance ( though its hurting now for a week ) will review it only on a close below 4800 on weekly basis.

Bottoming out in any markets is a painful process with fear increasing. The sentiments have never been so bad in the last 4-5 years apart from 2008. Last i saw such pessimism was in December 2011.

Another technical chart shows how critically placed the Nifty is. Its the low volumes in the fall and slow in magnitude suggests its more a corrective move.

-> 61.8% retracement at 4950, 73.6% retracement at 4810.

-> Very close to the long term downchannel for the last 1 year or more.

-> Long term trendline since 2008 comes at 4800.

Bottomline :

With RSi oversold, huge pessimism, long term supports, low volumes its setting up for a bottoming out process. It can be done in a day or two or take a max of 2 weeks.

Even if Nifty were to break down we will get a decent bounce from current zones.

Sustaining above recent daily highs of 5030/5140 will need to be watched out for confirming a major bottom in place.

We believe the current formation could be one of the very important bottoms for medium to long term. And expect June to be a much better month.

Disclosure: We are almost 80-90% invested and may look even going leveraged on sharp corrections on the long side. Have deployed cash over the last 5-6 sessions and taking a notional hit on the holdings which could be 7-10% also. Ready to deploy the rest cash and even a bit of leverage over the next 3-5 sessions ideally.

It clearly states my bias towards the bullish side. We are ready to take a 15% knock on the portfolio, be patient over the next 3-6 months for returns and so investors / traders should do their own risk management and research before following any of the above study and advice.

Happy Investing,

Nooresh Merani

Analyse India Market Solutions Private Limited.

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BHEL — Available at 5-7 year support zones.

Nooresh — Fri, 11 May 2012 05:15:22 +0000

BHEL – The stock is available at 5-7 year support zones.

Either the situation is as bad as 2008 for the sector or we should turnaround from current levels.

Can keep a closing stoploss of 200.

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Bank Nifty – Set for a bounce back from 9200-9500.

Nooresh — Wed, 09 May 2012 06:17:02 +0000

Bank Nifty – Cluster of supports.

1) 50% retracement level

2) Long term parallel channel.

3) Short Term Parallel channel.

Upside resistance at 10000-10500.

Top Bets – ICICI Bank and Axis Bank.Available at 50-61% retracement.

Risky plays SBI and PNB.

Happy Investing,

Nooresh Merani

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USD-INR and Nifty – Is June the next January.

Nooresh — Mon, 07 May 2012 04:10:15 +0000

Please find attached a detailed report on USD-INR and Nifty.

In quick words we expect the next few days would be an ideal time to ramp up investments with a long term view.

Expect good reversals from 5000 + – 100 points. But stock specific we believe we are at an excellent buy zone if one is ready to take a medium to long term call.

Check the detailed report –

USD-INR and Nifty – Analyse India.pdf

Disclosure:

Will be looking to deploy investible cash in the next 5-7 sessions and ready to see a hit till 4800-4900 on Nifty.

Happy Investing,

Nooresh Merani

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Sensex –Sell in May and Go Away – Thumb Rules Never work

Nooresh — Wed, 02 May 2012 06:25:28 +0000

Technically Sensex seems to be in a tight range for a good amount of time.

The way it is digesting bad news the direction for breakout should be up. The reaction to a positive news is way higher in current markets. Above all i again see a sense of frustration among participants so a direction is about to come. Markets will react sharply to any positive news.

S&P downgrade created a bottom for US is it going to be same for us ? Well too early or optimistic to call it but i maintain my positive bias and the approach to accumulate quality stocks in the current period and wait patiently.

Technically above 17600 and 5400 Nifty we will see a sharp run up. As of now we have too many concerns on GAAR, FII, USD-INR etc etc and have too many reasons for a downfall. But people dont have many reasons for an upmove that i believe creates a good window of opportunity for investors.

On the trading front it will continue to be difficult till we dont get out of this range. Pharma continues to be a space of interest but one should now start focusing on the beaten down sectors like infra,metals etc as that is where we may see the sharpest reaction.

Also for all the people who mention Sell in May and go Away need to go back and look into what happened in May 2009

Balaji Tele seems an interesting stock for punting over the next couple of months for someone who can take a 10-15% risk. Upside could be to 60 levels or more. A techno funda take. Keeping a small exposure.

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Technical Charts – Icici Bank, Axis Bank,Bpcl, dlf, Hero Motocorp.

Nooresh — Wed, 25 Apr 2012 16:54:02 +0000

Earlier we were looking for a price action above 900-910 or a move beyond 840 on downside. There is price action below 840 but it formed a doji for last couple of days. No signs of momentum seen on the downside too.

Axis Bank — Again near to supports but will it break or reverse. Too early to call.

BPCL – 700-710 seems a resistance. Is diesel hike on cards.

DLF – The ping pong continues between 170-190 to 240-260 bands on either side.

Hero Motocorp — The stock looks excellent on the long term basis. Previous tops 2250-2270 remain a resistance which if crossed can give a jump. Only concern stoploss is a bit deep.

Strategy: The last few weeks have been terrible in terms of market behaviour with no clear direction it seems that now its a time to just sit back and wait for clarity on trending trades. Stick to small and quick trades. Buy the dips to book on jumps.

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Nifty – A false start yet again. Where does it stop now.

Nooresh — Mon, 23 Apr 2012 14:41:52 +0000

-> In yesterdays post had discussed about the lack of volumes in the upmove to 5340 levels and we need to wait for 5380 to be conquered before we get ready for a move.

-> Todays dip which did come as a surprise ( i did not expect so took a knock on some trades ).

We are back into that boring range for Nifty of 5130-5340.

-> Although we do have supports at the lower end with recent bottoms at 5180/5135 but the current formation in more of a falling wedge so a new low to 5020-5100 will also keep the structure bullish only.

-> But we need to wait for a trigger point above the falling wedge breakout line which would now shift to the recent high of 5340.

-> The downside trend change will be seen below 4900-4950 on weekly closing which is the 61.8% retracement level.

-> Above all if a rally or a breakdown has to be confirmed we need volumes which are totally lacking so we may see this 5100-5350 being tested either side again and again hitting a lot of stoplosses on either side.

Strategy :

Generally such tight ranges are very difficult to trade on large cap stocks and high beta counters. One may need a little longer horizon and buy only on the lower end and even if shorts then only the higher end of the band with stop losses.

We need to keep waiting till we see a clean trigger of price volume to jump in. As of now there seems to be none. A medium term view would be to go stock specific buying slowly on sharp declines ( stock specific not based on index levels) till Nifty holds the 4900 mark.

Traders need to be nimble and even take some losses for some time maybe even weeks but when the trend picks up maybe below 5000 or above 5350 ( keep open both even though we remain bullish) there will be super trades of big 15-20% directional moves in less then a wek.

Investors need to use this period to get into quality names in the smallcaps as they may remain resilient.

This is precisely the reason we have started with a new WEALTHWYSE Portfolio. The last we created a portfolio was in August –November which has yielded 20-22% as of todays closing.

Hope that with gods grace we would be able to do the same over the next 6-12 months in the new portfolio.

We will be closing the entry into this scheme by April 30. To quickly enroll and not to miss the recommendations which are mix of short to medium term and long term core picks subscribe for ANALYSE WEALTHWYSE

Happy Investing,

Nooresh Merani

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