Technical Analysis of Indian Equities by Nooresh

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


S&P 500


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

Article by Nooresh Merani

Nooresh has written 2801 articles.

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{ 10 comments… add one }
  • vivek May 18, 2012, 10:22

    Hi Nooresh,
    I had bought 1000 shares of Shri Lakshmi Cotsyn Ltd . @ Rs.150 having a Eps of 50 . Today it is Rs 90 . What to do (sell or average).Please guide me

    • Nooresh May 21, 2012, 23:44

      Hi Vivek,

      I would doubt the fundamentals of the company.

      If you are trader would suggest to look at terrible delivery volumes in the rise. on fundamentals the 50 eps 🙂 is i suppose with a lot of rising debtors and inventories. Not looked totally but such earnings can wipe off in a quarter.

      very low delivery % ge indicates manipulation

  • Nitin(thane) May 18, 2012, 12:02

    hello sir,
    sir the panic is all around but smart investors r on buying jets. they r just buying like there is no tomorrow. if we see this time the fall of dec. and the fall of May the is a huge difference some weaker stock as per charts who r laggards from the beginning of a rally since 2009 it is no surprise that they r fallin so much. but some midcaps are still double the value since the mkt hit a bottom in dec. commodities r goin dwn interest rate will fall further all this argues will for the New Bull Market. as it is well said ““Bull markets are born on pessimism, grown on scepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.”

    • Nooresh May 21, 2012, 23:38

      Hi Nitin,

      Yes valuations are compelling for long term investors with apetite. For a normal guy risk reduces with price increases 🙂 whereas it should be vice-versa.

      So am pretty optimistic for next 6-12 months 🙂 Difficult to take a big bet on next 6-12 sessions 😉

  • vritika May 18, 2012, 14:41

    sir, should i buy icicibank or axisbank at this rate.

    • Nooresh May 21, 2012, 23:37

      well if you have a little longer horizon can prefer axis bank

  • Ritesh May 19, 2012, 23:17

    Hi Nooresh, How is IOC at 270 and Hind Petro at 305, considering imminent price hike in next 5 days and cooling crude.

    • Nooresh May 21, 2012, 23:36

      Does not seem like a rate cut coming in this month. Can come after some gap post parliament session

  • Kaushal May 20, 2012, 23:46

    there does like some +ive divergence at the 30rsi, so by that logic it does indicate that the near term trend may be reversing. but 4600 also looks very much possible.

    • Nooresh May 21, 2012, 23:36

      I keep getting a lot of numbers on the downside for 4600 / 4400 or even at 4800. What after that is the important part 🙂


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