Monday, July 09, 2012
CNI Publication: Weekly Pattern
Nifty opened week in the morning hence the hope of gap up till 5360 receded but it gave good chance to spark many stocks like B F, BGR, Adani, Raymonds,
Century, B Dyeing IFCI etc. Had the market opened at 5360 gap up then certainly we could have seen deeper correction of 200 odd points on Sensex. Thanks God this did not happen.
Praj Pnj, Renuka, IVRCL and JP all fired. The correction now could be short lived and every dip should be a great buying opportunity. B Dyeing will be
the stock of this month as co will post super dooper nos due to realty possession. Co will also exit its old poly biz. Stock may fire till 750. BBTC too will fire in synch. Century will certainly blast as many cement merger deals are happening soon which will set benchmark price of cement. Century’s 50 pc valuations come from cement which cannot be ignored. It will consolidate slowly till 385 to 395 as it was its previous high thereafter it will board super fast train till Rs 550.
Nifty has huge resistance at 5360 though it will certainly break for sure but not before catching traders on wrong foot. Nifty may find support at 5200..
It was flat day for Nifty but many stocks showed strength and character. Traders were hesitant to extent commitment and stocks kept on riding pyramid wave. E g The JET stock was certain to test 500 as I mentioned when it was at Rs 225 and the same stock is now climbing a new high every day. Even ABAN is falling in that category. Whatever is the debt due to sharp depreciation of RE, the same will get corrected as and when RE improves. Soon RE will be at 52 and ABAN at 450 plus. Then the sell of power BIZ will come for Rs 550 600 crs and ABAN will fly to Rs 500. Then the restructuring of FCCB will come and stock will show heaven to you ALL FIRUNG brokers had given target of USD 60 plus and USD took U turn proving that what they say never happens. Most of the stocks which were downgraded are shining today whether it is HDFC, RIL, SBI, DLF, RENUKA or IVRCL.
Just before settlement Nifty was consolidating at 5150 giving comfort to short sellers that 5180 is big resistance and it will never be breached easily. Then came the came the MONSOON First day First Show (HORROR Friday) which showered 450 point rally crossing all the barriers. Nifty crossed 5300 and once again tiny chartist community tried to break the Nifty rhythm for the last 2 days but Nifty seems have some different plans.
Traders still going short in Nifty at every level under the bonafide belief that 5360 will never be crossed. Once again we may see GAP UP crossing over 5360 which will open the door of 5700 which is near the FEB high. This will be called DOUBLE TOP like they say DOUBLE BOTTOM.
Congestion zone continued for Nifty as it is shying to cross 5360. The big game in under planning. Most of the street players are going short every day thinking that market is tired and will now re test 5150. But at the end they cut short in Nifty.
But this view of correction has made them go short in many stocks which are in fact firing due to short trapping. The hungry bulls wants that you should short and they are just allowing the accumulation of shorts to make big games.
I had given buy in PRAJ at 53 cmp 63 and now the order buzz of Rs 600 crs was floated in the market. This has happened only because the drivers could catch many street guys short on the counter. Street guys include the FII where they too are shorting and getting trapped.
The patience will get over tomorrow for bears and the expected news flow will make them cut short and go long in Nifty and chances of gap up not ruled out. Any time we may see 5500 now hence selling would never be a wiser course for street players. Still if you wish to short then sell weak stocks like pantaloon and VIP as ideally best hedge short. If market tanks these stocks will correct more than 20%.
My sources say that P M has cleared GAAR with specific directions. It says all P notes and FII will be tax free if they are covered by treaty country else all other trades will be taxed. This could be a right step in right direction and can open gates in inflow for at least 10 bn usd. That means Re will at 52 or even 50.
EU may not be reducing interest rates today but China has cut interest rate. This will be good for Indian markets too. Ruling party has announced that they will go for Fdi in retail in congress ruled state as they are getting opposition from OPP parties. It means this is a face saving act. The GAAR clarification too is a face saving act. These 2 acts suggest that the ruling party is seriously considering taking some major steps which will boost FII inflow. This also suggests MADAM was fully aware the EX FM failed to keep the mood good and went with wrong notions even against MADAM which facilitated for his promotion. This always is protocol in the Govt to give promotion and transfer when somebody fails
Montek Singh could have taken over as new FM but considering the current state of economy it was given to the Hon’ble PM only. The first thing he did is that GAAR is going away from P notes. FDI is coming in retail as well as C A sector. Hopefully even the rate cut will come soon.
Monsoon is not failed in India. Last several years we are getting deficient water in June thanks to global warming and change of cycle by one month. Earlier we used see end of winter on 14th Jan now a days till March end. Media unnecessarily making hype out of it and retail investors are unnecessary reacting.
I had told you that B gr rally will start and all B gr shares have moved up by 10 to30 pc in last 4 days. This will continue. Nifty can just blast if it cross 5370 and can crash if break 5280 so keep this range. Once again repeating for your benefit does not fall in the trap of charts and small bear corrections as market is ready to blast. Any correction should be used to buy only. Trade only at 50 pc of your capacity and conserve 50 pc for correction even though it will not come. Correction has a thumb rule when desired never comes. Right now since nobody is able to participate and if participating getting out at every 2% profit and looking to short, I feel market will not correct.
B F Utilities won in the S C ( order flashed on CNI site ) could open doors to Rs 800 as uncertainly is over once for all. Though this had tested Rs 2000 earlier on this news only. We were aware of the order hence generated buy at 379 and again at 400.
But street has 2 kinds of people one always negative saying that this will not happen and we will buy only on news. Now they will come for buying tomorrow at 475 Rs 100 premiums. This is what stock market is known for.