10 OCTOBER 2011 WEEKLY REVIEW WEEK 42 INVESTMENT STRATEGIST MILAN BAVISHI Our Vision To be the most favored financial services provider for all categories of investors by offering them comprehensive Wealth Care service.
NIFTY OVERVIEW Nifty continues to trade in a range of 4720 and 5180, as shown in the figure below. Overall, the direction of the market is down as it has made lower tops and lower bottoms after making a high of 6338 in May 2010. One observation that can be made from Nifty futures is that (in this trading range) on certain portions Scrip ID:GAIL where Nifty Group has / fallen, Index:A the / BSE100 volumes Face have value:10.00scrip increased, while on the rises the volumes has declined. Looking at Price and Volumes in combination, it can be understood that bears have Code:532155 strength over Industry:Utilities:Non-Elec bulls in this range. The markets need to breakout of either edge of the range to take a direction. On the downside, if 4720 is broken and Nifty closes below 4700, we see markets going down to 4535. On the upside, if 5180 is breached, markets faces resistances at 5320 (gap filling) and at 5540 (resistance from a downward sloping trendline from 6350). If USD-INR breaks 50, we could see selling pressure coming the markets. Trading Strategy: Since the markets are range bound buying and selling activity (in index) can be initiated at the edges. The traders should follow test-match style game, wherein 1s and 2s help to build a good score. In essence we recommend to book profits regularly.
STOCKS JINDAL SAW LTD BSE Code: 500378 NSE Symbol: JINDALSAW P/E : 9.58 ISIN Demat: INE324A01024 Div & Yield %: 0.83 EPS : 14.13 Book Value: 145.42 Market Cap (Rs Cr.): 3742.51 Face Value : 2 Recommendation : SELL Entry Price : SELL BELOW 129 Last Scrip Close ID:GAIL : 136.55 Group / Index:A / BSE100 Face value:10.00scrip Targets : 122-112-98. Stop loss: 142 (on closing basis) Jindal Saw Ltd is making lower tops and lower bottoms suggesting that it is in a downtrend. On weekly basis, it has formed a doji candle pattern which indicates that the recent bounce back from 108 has come to a halt. Weexpect the price to resume downtrend if it falls below 129. Werecommend sell below 129, for the targets of 122-112-98. Put a strict stop loss at 142 (on closing basis). 3
STOCKS INDIAN OVERSEAS BANK BSE Code: 532388 NSE Symbol: IOB P/E : 5.24 ISIN Demat: INE565A01014 Div & Yield %: 5.47 EPS : 17.42 Book Value: 131.96 Market Cap (Rs Cr.): 5658.46 Face Value : 10 Recommendation : BUY Entry Price : AT CMP Last Scrip Close ID:GAIL : 91.60 Group / Index:A / BSE100 Face value:10.00scrip Targets : 97-104-108 Stop loss: 85 (on closing basis) Indian Overseas Bank (IOB) has formed weekly doji candle pattern with bullish implications. It suggests that the current fall has come to a halt. And the stock could reverse from here. It has formed double bottoms at 86 levels. Double bottoms is technical pattern which indicates trend reversal. The stock has retraced 62.5% (Gann retracement) of its entire rally from 37 in March 2009 to 180 in November 2010. This level can act as a good support for a technical bounce back. The stock can be bought at CMP to participate the expected bounce back. Place the stop loss at 85 and trade for the targets of 97-104-108. 4
STOCKS AMBUJA CEMENT LTD BSE Code: 500425 NSE Symbol: AMBUJACEM P/E : 19.09 ISIN Demat: INE079A01024 Div & Yield %: 1.78 EPS : 7.6 Book Value: 47.82 Market Cap (Rs Cr.): 22245.68 Face Value : 2 Recommendation : SELL Entry Price : AT CMP and on rise. Last Scrip Close ID:GAIL : 145.80 Group / Index:A / BSE100 Face value:10.00scrip Targets : 136-128-121 Stop loss: 154 (on closing basis) Ambuja Cement Ltd is trading at a trendline resistance. On daily charts, it has formed a bearish engulfing pattern which suggest trend reversal. Further, on weekly charts it formed a bearish doji reversal candle. The stock can sold at CMP or on rise with a stop loss of 154 (on closing basis). On the downside, one can trail stop loss at targets of 136-128-121. 5
STOCKS MAHINDRA & MAHINDRA LTD BSE Code: 500520 NSE Symbol: M&M P/E : 18.67 ISIN Demat: INE101A01026 Div & Yield %: 1.44 EPS : 42.62 Book Value: 167.46 Market Cap (Rs Cr.): 48869.73 Face Value : 5 Recommendation : SELL Entry Price : AT CMP and on rise. Last Scrip Close ID:GAIL : 799.60 Group / Index:A / BSE100 Face value:10.00scrip Targets : 774-727-685 Stop loss: 830 (on closing basis) Mahindra & Mahindra Ltd is trading at its all time high and here it has made double top pattern. In a double top pattern, the same price is reached twice and that level acts as a strong resistance. We suggest that a fresh buying should be avoided at this level. Long term investors can book profits. And re-enter only if the stock closes above 830. Traders can sell the stock with stop loss of 830 on closing basis and trade for the targets of 774-727-685. 6
COMMODITIES GOLD MCX Gold CMP Rs26350 Support: 25600-24650 Resistance: 27260-27750 Comex Gold CMP - $1642 Support: 1595-1536 Resistance: 1699-1730 The concerns that global economy is facing in terms of sovereign debt and GDP growth issues Scrip won t ID:GAIL be fixed Group overnight. / Index:A Even / BSE100 if the Face global value:10.00scrip economies unite and take action in all positive will, it will still take some time. It is generally believed that Gold acts as a safe-haven in times of such crisis and it is a hedge against inflation. However, in a deflationary environment Gold s role as a inflation-hedge is reduced. After a significant fall towards the end of September 2011, Gold is now trading in a sideways movement. We believe, Gold would pull back to $1699 and $1730, where it will face resistance and resume downfall. Daily Bar chart of MCX Gold 7
COMMODITIES SILVER MCX Silver CMP Rs52297 Support: 51040-47390 Resistance: 54670-58275 Comex Silver CMP - $31.23 Support: 30.48-28.30 Resistance: 32.65-34.80 Silver just as Gold is trading in a sideways direction after witnessing a major fall. Scrip ID:GAIL Group / Index:A / BSE100 Face value:10.00scrip The only silver-lining at the moment is that Comex Silver s correction has taken support at 50% Code:532155 retracementindustry:utilities:non-elec level of the its entire rally from $3.51 to $49.82. Silver could bounce-back to the given resistance levels, where again it would face selling pressure. Traders must not forget that Silver is in a overall downtrend. Follow our calls during market hours for trading ideas. Daily Bar chart of MCX Silver 8
COMMODITIES ZINC MCX Zinc CMP Rs93.70 Support: 91.50-89.00 Resistance: 95.65-97.70 On the weekly charts, although Zinc appears to be trading in a sideway pattern, it is observed that it has critical supports at 89 levels. Scrip ID:GAIL Group / Index:A / BSE100 Face value:10.00scrip If this support (89) broken on closing basis, we expect Zinc to fall another 10%. As long as Zinc holds this support it can bounce back to 95.65-97.70 levels. Follow our calls during market hours for trading ideas. Weekly Bar chart of MCX Zinc 9
CURRENCY USDINR CMP: 49.28 USD-INR is showing bullish trends for the last three months. On the downside it has supports at 48.40-47.90. And on the upside resistance come at 50.15-50.83-51.50 levels. Below Scrip is ID:GAIL the Daily Group Chart of / Index:A USDINR / BSE100 Face value:10.00scrip GBPINR CMP: 76.52 Support: 75.90-75.20 Resistance: 77.44-79.35 EURINR CMP: 66.21 Support: 65.85-65.10 Resistance: 67.53-68.15 JPYINR CMP: 64.34 Support: 63.95-63.15 Resistance: 65.66-66.60 10
Created by: Inventure Research Contact : Research Coordinator, Inventure Growth & Securities Ltd,201,Viraj Tower, Near Landmark Building, Western Express Highway, Andheri (East),Mumbai -400 069 Tele: 91-22-39548500 Extension :577, Fax: 91-22-40751535. E-mail: milan.bavishi@inventuregrowth.com, website : http://www.inventuregrowth.com/ Scrip ID:GAIL Group / Index:A / BSE100 Face value:10.00scrip Notice: This document is prepared by Mr. Milan Bavishi. Research for Inventure Group for private circulation exclusively for their clients. Disclosure: We and our affiliates, officers, directors, and employees, including persons involved in the preparation or issuance of this material may; (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company/companies mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company / companies discussed herein or act as advisor or lender / borrower to such company / companies or have other potential conflict of interest with respect to any recommendation and related information and opinions. The same persons may have acted upon the information contained here in. Disclaimer: This document has been furnished to you solely for your information and may not be reproduced or redistributed to any other person. This material is for the personal information of the authorized recipient, and we are not soliciting any action based upon it. This report is not to be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. The material is based upon technical reading of the Graph. Though utmost care is taken by the writer of this document, and it should be relied upon as such. Neither Mr. Milan Bavishi of Inventure Growth & Securities Ltd. nor any person connected with any of these entities accepts any liability arising from the use of this document. Opinions expressed herein the report are our own and are based on Technical Research as of the date appearing in this document only. Reports based on Technical Analysis centers on studying charts of a stock's price movement and trading volume, as opposed to focusing on a company's fundamentals and as such, may not match with a report based on a company's fundamentals. While we endeavor to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. Prospective investors and others are cautioned that any forward- looking statements are not predictions and may be subject to change without notice. Our proprietary trading and investment businesses may make investment decisions that may not exactly adhere to the recommendations expressed herein. No part of this material may be duplicated in any form and /or redistributed without Mr. Milan Bavishi s prior written consent. In so far as this report includes current or historical information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed.