Nifty Bruised And Oversold....Time To Pullback A Little???

Weekend Views On Nifty!!!

There are two kinds of news, the good and the bad, and then there is only one kind of market and this market has a mind of its own! Now whatever this market does, the news channels will need to justify it, and they do it so, by taking out the appropriate dress (good/bad news) and dress it up accordingly!

Right now is the right time to feel bearish; coz right now there is a bubble threat in China, coz right now Obama wants to reform the STREET, coz right now our own Inflation numbers aint looking good, right now the Dollar is looking strong and finally right now everyone wants to see the color RED!

And mind it, all of the above will hold water till the next close! Yes if we manage a V shaped recovery from here, then the news might be; China bubble dangers were unfounded and rumors of vested interests (maybe the Chinese will blame Google for spreading em), Obama will say he was misquoted, and Inflation is just another number and Dollar...well Dollar’s rise will be negated by fall in commodities and not the SnP!

I guess we as traders should stick to our charts and more importantly to our STOPS and trade! We might never know the exact reason or timing of the fall but we do know when the warning bells ring. Please see the two charts I posted on the 17^th and the 20^th of January, I guess they were screaming caution irrespective to the news that was yet to come!

Moving on to the chart below, we can see that we have just managed to penetrate the short term TL (three strikes done, now the fourth might be brutal!) and any fall from here is straight to 4800 and 4650..a good 10 % correction eh?

Meanwhile a pullback from here will depend on how we react at 5095/5115! Above that, its back to testing THE 5180! All in all for all long 4950 or near bouts is a good stop! Time to buy some value stuff, better do it in tranches and better do it after you have done your homework!

Gold Views!!!

SnP 500 Views!!!

It’s almost after two weeks I am doing the SnP 500 thing; see the chart I posted on the 3^rd of Jan, and read the complete post here! Well we did get our first target (and I guessed Obama chipped in to :-) )!

From the chart above you can see that the wedge has broken down and now we are staring down at the 200 periods MA and the significant low at 1040 and 1030 respectively. We have reached the OS levels in a jiffy and now it remains to be seen how we react to a pullback from here. Assuming that this fall is an another “buy the dip” and not THE DEEP, then also I would be personally satisfied once we are back to 1140 and above, till then it would pay to be a bear or sit aside!!!

Dollar Views!!!

I won’t add to analysis of the USD Index, as I still have the same views which were mentioned in the last post here and USD Index hasn’t done anything drastic yet that warrants any change of views!

By the way just for illustrative purpose I have drawn a fib projection on the chart which shows how the rough target of approx $82 was inferred! A typical AB=CD move in the making! It’s still at the volatile 200 periods MA and once again at the risk of being repetitive I would like to say that USD Index is likely to be strong as long as it trades above $77!

HCC Views!!!

Hindustan Construction Co (HCC), founded in 1926 by Seth Walchand Hirachand, is an engineering construction private company.

There is a lot of buzz about its LAVASA project dubbed as the “Free India’s Largest Hill City”.

Even after recording higher sales, Hindustan Construction Company (HCC) has posted a 36% drop in net profit in the December quarter because of a write-back of excess tax in the comparable period last year!

Now the question is that was the share dumped coz of the above news or was it that it was caught up in the grand scheme of things i.e. the markets falling!

Let’s look at the Daily chart of HCC, from the chart below we can see;

• A failed breakout above 150 and now back into the range.

• A rising wedge accompanied by negative divergences gets broken.

• The 20/50 periods MA’s give way and now the only average below is the 200 at 120!

It looks now to test the 130 zone, and below that it’s 120. It’s a good company and is not bad if you get it at 120/10(wedge targets) odd levels with long term targets at 250+! For the lesser mortals; us traders, we can see if it takes support at 130, thereby try and get in with a tight stop below 130 for a ride to 150. As for the momentum guys it’s a clean break above 150 that will again set up this stock into bullish territory!

Bilcare Ltd Views!!!

I had done a post on the pharma industry earlier and decided to check out a stock, much liked by a friend of mine; Bilcare Ltd!

First some basic info about the company;

Bilcare is an innovation-led solutions provider that partners with the global pharmaceutical and healthcare industry to improve patient healthcare outcomes. We endeavor to deliver effective and affordable solutions that enhance the speed and quality of drug discovery and help build and protect brands by ensuring the delivery of genuine medicines to patients.

• Founded in 1995 by Mohan Bhandari, Bilcare Ltd. is listed on Bombay Stock Exchange (BSE).
• Three defined business areas - Pharma Packaging Innovations, Global Clinical Supplies and nonClonable™ Security Technologies for brand authentication and security.
• 500+employees, with 50% workforce based outside India.
• Operations spread over 4 continents with more than 500 pharma customers globally.
• Manufacturing plants and R&D centres located in Pune, Singapore, U.S. and UK.
• Revenues of USD 162 million (FY07-08)

And for numbers one can click this link.

Now get down to brass-tacks; weekly chart;

As you can see from the chart above that it has reacted from the 200 periods MA above, and now is heading back to test the 20/50 confluence (452/55) below. By the way we have a nice range here where the monthly hi/lo at 556/485.20 is also as same as the weekly hi/lo! So this 485 becomes quite significant, where, in that vicinity, a few long stops might be crouching! I would rather be keen to see on how it behaves at the confluence of weekly 20/50 MA’s (455 area) below. It is there where one might get some value buy! Anyway from traders perspective it’s buy the supports and sell the resistances, and from the investors point of view especially the medium termish view, a buy here and add some at lower levels, can be held for 700/750! Once the monthly and weekly Hi along with the 200 periods MA is taken out with volumes, this can become a good momentum play!