Friday, August 08, 2008


NIFTY (4523 +6 pts)

Supp 4490/4420/4360 Res 4580/4630/4680

SENSEX (15117 +43 pts)

Supp 14890/14690/14500 Res 14270/14360/14500

What one should look for before entering any trade is the Risk-Reward Ratio - is it favourable? No one will be ready to forfeit 1 rupee for a probable 1 rupee loss, reward must be Rs 2 or Rs 3 or even more for losing a rupee. We entered the market below 13000 where risk-reward was favourable. Now the expected move has happened and we have almost achieved the targets. It is advisable to take profits and wait for further clarity. Technical analysis is always about probabilities and never certainties, but the most important thing is to protect our capital. In worst case scenario, we may even drop below previous lows around 12500. So at least for time-being, we can wait for further trend.

Review of the previous session:-

  • Markets moved sideways for most of the day and finally ended flat. Auto stocks performed well but other sectors were laggards. India’s wholesale price index rose 12.01% in the 12 months to July 26 against 11.98% previous week.

  • BSE Breadth 1406 Adv-1284 Dec NSE Breadth 623 Adv-597 Dec Upper Circuit -214 Lower Circuit –107

  • BSE Vol Rs 5691 Cr NSE Vol Rs 13057 Cr F&O NSE Vol Rs 49917 Cr

  • FIIs sold Rs 223 Cr in cash market and MFs bought 24 Cr. In F&O, FIIs bought Index Futures worth Rs 117 Cr and sold Stock Futures worth Rs 276 Cr. Their Outstanding position in Futures is 32281 Cr and Options is 19190 Cr.

  • Additional Data:- Gold $877.90/oz Nymex Crude $120.02/bbl

F&O observations:-

  • Long build-up – SCI, KPIT, Ansal Infra, Adlabs, GAIL, Voltas, Dr Reddy, Gitanjali, Ambuja, MTNL, TTML, Maruti, DLF

  • Short build-up – Crompton, Rolta, BankIndia, DenaBank, BhartiAirtel, BHEL, GMR Infra, RCom, Renuka, ChennaiPetro, TataPower

  • OI 70513 Cr (+2778 Cr) Nifty OI Up 4% PCR 1.33 (from 1.32)

Outlook for 8 August, 2008:-

  • Dow Jones closed down by 224 points as AIG’s unexpected loss dragged down financial shares and Wal-Mart forecast a slower sales growth.

  • The triple-digit day (08-08-08) to start negative on the back of weak global sentiment. Sensex has been resisted at 15422 and now closing past 15500 is required to give further strength. Nifty breaking 4420 can give way to further correction in days to come.

Ideas for Trading (for short-term position):-

No Picks

Catch them falling (Ideas for Investment):-

No Picks The government may impose a cap on the revenues of oil producing companies like ONGC, OIL, Reliance Industries and Cairn, if the BK Chaturvedi committee recommendations are accepted. The committee has recommended that any incremental revenues earned beyond $75 a barrel would have to be given to the government as part of subsidy-sharing in the oil sector. While public sector oil companies like ONGC and OIL will take a larger share of the subsidy bill by contributing all revenues beyond $75 a barrel to the central exchequer, private oil producers will have to fork out only 50% of their incremental earnings to the government. In a move that can have major implications for foreign institutional investors, market regulator Securities and Exchange Board of India, or Sebi, is thinking of introducing know-your-customer norms for FIIs. This is in the light of the Reserve Bank of India's concern on the origin of FII money in the domestic markets. The norms relating to Participatory Notes will also be up for review.

Disclaimer: These recommendations are based on the theory of technical analysis and personal observations. This does not claim for profit. I am not responsible for any losses made by traders. It is only the outlook of the market with reference to its previous performance. You are advised to take your position with your sense and judgment. I am trying to consider the fundamental validity of stocks as far as possible, but demand and supply affects it with vision variations.

1 comment:

KMV GARA said...

Dear gopal, nice work. Iam a regular reader of ur views. I start by trade only after reading ur views. Yesterdays ur lines in RED is very nice.