Mkt View

Hi Friends,

Week after week the Bear phase( Not a Bear market) is becoming intolerable to a Long term Investor.I am inclined to use the term bear phase and not bear market as technically we haven't corrected more then 32.3% in the major indices.Most of the momentum stocks fall into the second category as losses in them range between 55-84%.I believe that in the current market pattern the technicals and the fundamentals have taken a back seat.Most of the stocks have been hammered with a Bear stick.The biggest curse or the biggest boon for a stock i.e liquid and illiquid volumes have found similar fate with bears.The liquid stocks have been hammered because one can create shorts in the same.While the illiquid lot has been hammered thanks to the distress selling observed in these stocks.People are selling the stocks from there Long term folio as if there is no tomorrow to the stock Markets.I remember the golden words of one of the most respected fundamental analysts in our markets."The markets always remain alive,Its only the traders that change".Our stock market will continue to give 20-30% returns on an annual basis.I believe the problem now is that of Trust,belief and news-flow.

WHERE WE ARE HEADING ??

Monday : 17-03-2008 ////////////////// WHERE WE ARE HEADING ??

: SENSEX Projection
_________________________________________
Many of the investors are tracking SENSEX and they need projections of Sensex along with Nifty. We had given our views time to time on Nifty. I normally track Nifty in short and medium term. In the broader interest of the viewers, we will try to find where we are heading ???????????????????????? Let me talk two possibilities: A-Till 2007 , we have accepted our bull run as a SUPER LONG TERM BULL MARKET , withing the wave counts starting from 2594 and current ongoing internal of final WAVE-5 being 21206-15228. Till this point, we do not have any confusion.And current ongoing correction is termed as a cyclicle correction within super long term bull market. B-INTERMEDIATE BEAR MARKET: There are laid down norms in Fibonacci retracements. If Each leg has its retracement levels like 0.382, 0.500,0.618
Or say 61.8%, 100%,161.8%,261.8%
--------------------------------------------- Now at this point of time our market is in correcting cycle from WAVE-5 21206-15228 ( Ongoing).. and 0.500 level is placed at 15187 while 0.618 ( max permissible)is placed at 14487. In case sensex falling below 14487, it may be contrued that current cyclical correction has rejected the entire WAVE Count placedunder internal of Wave 5 which started from 8799. In such a case, we shall not have any doubt that we shall have to count retracement level fresh from Wave -12594-21206. Now You shall have to term short term bear market and It may last as per the time frame like retracement from 2594-21206. You can count time frame also
. _____________________________
Now let us have retracement in case Sensex rejects this wave count by falling below14487.........................
A-0.382 retracement level is placed at 14100
B-0.500 retracement level is placed at 11900
C-0.618 retracement level is placed at 9700 approximately.
THOSE WHO ARE INTERESTED IN COUNTING TIME SHALL NOTE TWO DATES A-8799 ( Date :14/06/2006)
B-21206 ( Date :10/01/2008)
_______________________________
let us hope that SENSEX follows current wave count 5... then sensex must give close above 17227 to keep hope of testing previous high at least.

Learn from Warren Buffet

WARREN BUFFET
There was a one hour interview on CNBC with Warren Buffet, the second richest man who has donated $31 billion to charity. Following are some very interesting aspects of his life

1. He bought his first share at age 11 and he now regrets that he started too late!
Things were very cheap that time.
Encourage your children to invest.
2. He bought a small farm at age 14 with savings from delivering newspapers.
One could have bought many things with little savings.
Encourage your children to start some kind of business.
3. He still lives in the same small 3-bedroom house in mid-town Omaha , that he bought after he got married 50 years ago. He says that he has everything he needs in that house. His house does not have a wall or a fence.
Don't buy more than what you "really need" and encourage your children to do and think the same.
4. He drives his own car everywhere and does not have a driver or security people around him.
You are what you are
5. He never travels by private jet, although he owns the world's largest private jet company.
Always think how you can accomplish things economically
6. His company, Berkshire Hathaway, owns 63 companies. He writes only one letter each year to the CEOs of these companies, giving them goals for the year. He never holds meetings or calls them on a regular basis.
Assign the right people to the right jobs.
7. He has given his CEO's only two rules.
Rule number 1: do not lose any of your share holder's money.
Rule number 2: Do not forget rule number 1.
Set goals and make sure people focus on them.
8. He does not socialize with the high society crowd. His past time after he gets home is to make himself some pop corn and watch Television.
Don't try to show off, just be yourself and do what you enjoy doing
9. Warren Buffet does not carry a cell phone, nor has a computer on his desk.
10. Bill Gates, the world's richest man met him for the first time only 5 years ago. Bill Gates did not think he had anything in common with Warren Buffet. So he had scheduled his meeting only for half hour. But when Gates met him, the meeting lasted for ten hours and Bill Gates became a devotee of Warren Buffet.

His advice to young people:
"Stay away from credit cards (bank loans) and invest in yourself and Remember:
A. Money doesn't create man but it is the man who created money.
B. Live your life as simple as you are.
C. Don't do what others say, just listen to them, but do what you feel good.
D. Don't go on brand name; just wear those things in which you feel comfortable.
E. Don't waste your money on unnecessary things; just spend on them who really in need rather.
F. After all it's your life then why give chance to others to rule our life."

"The HAPPIEST people DONOT necessarily have the BEST of all. They simply APPRECIATE what they find on their way”

LET US CHOOSE THE WAY TO LIVE

Mkt View

Hi friends,

As mentioned a number of times before the markets are seeing a combination of two events at one point of time.There is an element of classical trading involved in the current market movement.Buy low and sell high.Wonder how many traders are able to follow it in current market environment.The market is not breaking January lows and at the same time the market is seeing good amount of selling at higher levels.If S&P the credit rating agency is to be believed then the worst of sub prime writedown is over.I wonder how many analysts will be able to believe it when at the first place the agency was unable to expect the extent of the sub-prime mortgage write downs.I believe that the current market scenario the only one thing that will work in markets favor will be the pessimism observed in trading circles.I will love to go selectively long then being outright short above 4400. At the same time the only way for traders to survive is o carry minimal overnight positions.There is a distinct pattern that is observed in Nifty.Every Big move is followed by a move in the other direction the very next day.Intra day factors to watch out for will be inflation figures.One more event that the market will watch out for will be the expected inclusion of large farmers in the debt waiver scheme as requested by a Young congress parliamentarian .H has requested the finance minister to include regions that have been prone to successive droughts and increase the cu off date.If the suggestions are accepted (which we believe they will be) markets wont be kind to the Finance minister.We expect clarity to emerge after 5.00 pm today.The best way to trade is to make sure that you capital is preserved.

RESISTANCE :4722,4785

SUPPORTS : 4612,4568

Be Careful

Strong rumours that market might hit lower circuit soon.
Hold your buying and be very careful.
There are too many negative news
(a) Govt Unstable
(b) Election soon
(c) IIP Data Very bad
(d) Inflation figures bad
(e) Dollar Weakens against Yen
(f) Crude high
(h) Precious Metals High
(i) Low Trading Volumes
(j) Sub Prime Crisis
(k) Japan Growth in recession
(l) Company's Forex/Metal Hedging results not good
(m) Results Season ahead for the Financial Year
(n) Negative bias all over....NO POSITIVE CLUES......

Technical View

Sensex gaps down below 200-day EMA, ends "contraction", proves "Rule of 3"
Last week I had noted that, "contracting activity since 'Jan top is looking for a larger breakout now, probably in the coming week itself ... From that perspective, We'll watch out for a segment to get ‘fully’ retraced ... Complete retracement of the last contracting leg would prove a decider ... High & Low of the last leg were at 18137 and 17137 ... So watch both these levels in the coming week from the point of view of 'Rule of 3'... " Explaining the "Rule of 3" I said, "... Sensex (is) re-testing the crucial levels around its 200-day EMA ... it could be the last opportunity for the Index to prove if it is finally holding them or not ... Holding these supports on their 4th re-test is a difficult task going by the 'Rule of 3' ... Failure to trade above 17675-780 area or a 'close' below 17137, would confirm weakness for us." Global cues ensured Sensex' failure to trade above 17675, as a result of which, it slipped below 17137 on Monday itself. Once below 17137, end of "contraction" got confirmed as I specified, and just like an unwinding spring, Index tanked a huge 1600 points or nearly 11% by Friday. Small-Cap Index lost more, nearly 14%. Realty, Banking and Power Indices lost over 18%, 16% and 14%, respectively.Monday's action, in fact, showed a gap-down below the 200-day EMA. Friday saw another falling gap at 16211-253, both as marked on the chart. These are our new technical resistance on the upside. Some support came in at the lower Red channel shown. However, follow-up support "sustaining" above Friday’s high of 16211 is required to confirm this support. Failure to sustain above Friday's gap could not only lead to retest of Red channel, but would also see the Index reaching for Jan'08 low of 15332. Our final target on the downside, is calculated roughly as 14500. At this level, Index would lose 32% from its ‘Jan high of 21206. This would be a “normal” shave-off as per the 2-year phenomenon that I’ve already pointed out. The current down-move would complete the time equality (8 trading sessions) with the initial fall (from 21206 to 15332) on coming Tuesday. The 14500 level would also achieve 61.8% Fibonacci ratio to the 'Jan fall.
Last week's drop cuts the base-line for the 5-year long bull-market, and the participants are slowly realizing that. With its low at 15689, Sensex is just 357 points short of its 'Jan low of 15332.However, as we are moving closer to 14500, it may be a good strategy to buy in panics from hereon. This strategy may appear brave, and contrary to popular opinion, which is mainly the reason why it should work. Adopt a contrarian approach of searching for opportunities in panics, though only for a certain limited upside objective for the time being.

SEBI lens on Ambani firms m-cap rise...scam in the making

The rise in the market capitalisation of both the Mukesh Ambani and Anil Ambani group of companies has caught the attention of the capital markets regulator.
The Securities and Exchange Board of India (SEBI) is checking whether there was a de facto market capitalisation race between the brothers and if this was the reason why shares of their companies rose vertically between March 2007 and January 2008.
The regulator is said to be scrutinising its Integrated Market Surveillance System (IMSS) data to check for signs of possible concerted moves to lift share prices of a number of companies belonging to the two groups.
These include Reliance Natural Resources and Reliance Communications from the Anil Ambani group, and Reliance Industrial Infrastructure and Reliance Industries belonging to the Mukesh Ambani group.
Attempts by DNA Money to contact SEBI chairman Chandrashekhar Bhave for a comment on this was not successful.
SEBI is said to be investigating whether there was a modus operandi to the whole thing.
It wants to lay out modalities so that in future small investors are not suckered into rallies that explode on their faces later.
A proposal put out by SEBI earlier on Tuesday to include derivatives under the purview of insider trading regulations is a step towards curbing such incidences in future.
Under the prevailing regulations, an insider is penalised for transactions done only in the cash market and not in the futures & options segment, leaving a huge loophole in insider trading laws.
The proposal, when passed, would go a long way to save small investors, which is the ultimate aim of the regulator SEBI.
At the height of the bull run and ahead of the jumbo public issue of Reliance Power, the Anil firm, the stock of Reliance Natural Resources galloped to Rs 249.7 on January 9, 2008, which is a 1027 per cent gain over the price of Rs 22.15 seen in March 2007.
The stock was also included in the futures & options segment on May 14, 2007.
Similarly, shares of others Anil-led companies �- Reliance Energy, climbed 454 per cent, Reliance Capital jumped up 400 per cent and Adlabs Films surged 382 per cent between March 2007 and January 2008.
On the Mukesh side, Reliance Industries shot up by 150 per cent to Rs 3,252 from Rs 1,299.4 last March, while Reliance Industrial Infrastructure rocketed 740.6 per cent to Rs 3202.25 in October 2007 from just Rs 380.95 in March 2007.
Value-wise, a 150 per cent rise in the share price of Reliance Industries would amount to a far greater surge in market cap than many of the Anil shares put together. Also, it has tremendous weightage in the Sensex, so can change sentiment.
Since mid-January, share prices of both the groups have plummeted and large tracts of wealth created wiped out in a flicker.

Technical Outlook for 10 Mar 08

The Nifty traded weak, breaching crucial support levels. The fall on Monday and Friday was comparatively bigger. The Nifty opened at the high of week at 5304.45 and drifted down to touch a low of 4672.25. The Nifty closed at 4771.60, recovering almost 100 points from the low of the week. The Nifty lost 8.65% on a weekly closing basis. The Nifty, mainly taking weak global cues and due to the lack of buying support traded weak during the whole week. The Nifty March futures traded with a deep discount through out the week and closed with 52 points discount. The volume was at the low ebb.
Rationale
Daily charts
The Nifty witnessed some recovery towards the closing session on last Friday, However, the formation and closing was not so convincing to come to the decision that the Nifty had taken support on the trend line drawn from the low of March 2007. In fact, the Nifty closed below the trend line marginally. As the trend line is for longer period, normally we should need a decisive closing below the line or some 2-3 day's closing below the line.

On the concern side, the MACD in the daily charts generated a fresh sell signal. The swing trade in the daily charts turned to be negative. During Monday's fall, the Nifty breached below the PSAR. The RSI further diverged and in sell mode. Both the stochastic, are in sell mode. However, the oscillators are nearing to over sold zone, which may limit a further big fall. It may lead to bounce back with or without further fall. The short-term trend is negative as of now, with the possibility of some relief rally with or without further fall. The ADX is also in sell mode.

All the short-term averages are moving down. The Nifty is traded and closed well below the 5,10,20,50,100 and 200 day "SMA". In addition, the 5-day "SMA" breached the long term 200 day "SMA". This is a bearish sign. The 10-day "SMA" breached the 20-day "SMA". Both are coming down near to 200 day "SMA". Any further breach of 200 day "SMA" will make the situation further bearish.

The Nifty is making higher bottom and lower top formation so far. Any breach of previous low at 4448 will extend the cyclical bear market to extend further. Any breach of 4002 will change the cyclical bear market into structural bear market.

Weekly Charts
The Nifty made the lowest weekly closing since September 2007.In the weekly charts too; the Nifty is testing the trend line drawn from the low of June 2006.

The 5-week "SMA" is trading below the 30-week "SMA". The "14,3,3" and "5,3,3 Stochastic" generated a fresh sell signal. However, both are nearing the over sold zone. The "RSI" and "MACD" are in sell mode only. The medium term trend is weak.

Quarterly Charts

Since October 2003, the Nifty is trading above "PSAR". For this Quarter it is placed at 4002.20

Outlook for the Week

WEAK TREND PREVAILS WITH THE SUPPORT AT TREND LINES
Based on the above rationale, the Nifty's further move will be decided whether it is taking support on daily and weekly trend line or decisively breaching of them. The initial day's trades will answer to this question. If the Nifty is able to trade above trend line continuously, then it may see some bounce back. The rise will witness a cluster of resistance during the up move. Any decisive breach of trend lines will initiate the fresh weakness and may re test the previous bottom of 4448 or breach the bottom also.

The Nifty has strong support at 4777(2-3 days closing basis), 4635,4565 and 4448.The Nifty has resistance at 4810-4827,4845,4976,5011,5045-5089(strong for short term), 5209 and 5359-5390(strong for medium term).

Strategy
Traders should trade strictly with levels rather than assuming the trend. Preferably they look for derivative strategies. Investors can be at sidelines for the time being until the clear trend emerges.

I do my thing, and you do your thing.
I am not in this world to live up to your expectations,
And you are not in this world to live up to mine.
You are you and I am I,
And if by chance we find each other, IT'S BEAUTIFUL