BraViSa TempleTree-India Market Calls

[d_s_ramesh]

CNX500 on Free Float

Free Float Indexes of stocks comprising the CNX500 Index based on Industry classification. We have 71 represented Industries from the CNX500 stock Index, Which gets grouped further into 24 sub-sectors, after omitting those industries which do not have groups in the sub-sector. We get 17 sub-sectors and the whole market divided into 10 broad SECTORS. Compared to the price average indexes, free float gives more advantage. But, conventionally price average was first used in the calculation of Indexes. Even Now Dow Jones Index is computed on the price weighted method. It has its own advantages until there are not much splits in the component list.

Now using free float we are surprised to find a totally different dimension of sector representation in the markets. To have a glance we have provided both Price Average and Free Float market cap values today. We can find Utilities sector leading in the Price Average Indices, while Health Care leads in the Free Float method. On actual it is Health Care which was strong today.

HEALTH CARE SECTOR
Though weekly chart of Health Care is retracing bearish divergence, there is no signal for end of trend yet. Out of the Health Care sector, there are two Industry groups viz., Hospitals and Pharmaceuticals. While Pharma is retracing bearish divergence on MACD Lines and MACD Histogram, Hospitals Industry is very strong; any weakness here can be utilized to add to existing positions or new entries too. Apollo Hospitals, Fortis show very high strength. Indraprastha Medical has given a buy recently at Rs. 42.00.

OIL & GAS
Energy sector has showed gains today ranking 2nd among 10 sectors. This sector does not show much promise. It is in a strong sideways pattern. Energy sector is represented by Oil Producers and Oil Marketing Industry groups. Both the industry groups mirror the sector pattern. As this sector is in a big range move, there are possibilities of good price moves too. But, strong breakouts are needed in either direction for any trend to emerge. It is better to leave off this sector for now.

UTILITIES
Utilities sector which has ranked No. 1 in the Price Average method of Index calculation today also is in a sideways move. Not much opportunity is available in this sector at present. Both Power Generation and Power Distribution Industries which form the Utilities Sector have similar pattern as their combined entity.

TELECOMMUNICATION
Telecommunications sector which turned bullish after a very strong bullish divergence on weekly charts, has given back some gains today. It has gone into retraction mode, but indicators have gained good strength. There are possibilities that this sector will lead the NIFTY to new high in the next leg. Telecom Equipments and Telecom Services Comprise this Sector. Telecom Equipments are strong, look into Siemens and GTL. GTL is in the value zone, we can take long position with a strict stop. In case of whipsaw too, losses would be small and there is a good chance for re-entry. Possible long entries into Bharti Airtel at 298.00 levels and Idea at 62.00 levels can be thought off. As the weekly chart is gaining from a very strong bullish divergence, this sector is likely to hold bullishness for quite some time.

CONSUMER SERVICES
This sector is yet to retrace any bearish divergence. We have been writing about Hotels and Diamond Jewellery Industry for quite some time now. Indian Hotels, though gave a good move last week, it still has some more space to cover and the same with EIH HOTELS. TITAN would give a buy anytime shortly.

 

[d_s_ramesh]

Telecom rally continues ......

NIFTY has swept past congestion and aims for next resistance at 5370-390 levels. While Weekly charts are gaining strength on bearish divergence, Daily charts have gone past caution zone. Daily MACD lines are strong; this ensures that the rally is likely to continue.

TELECOMMUNICATION
TELECOM Sector ruled the show today. Doubts arise as to, while BHARTI and IDEA did not give big and RCOM even closing in Red. How is this sector leading? TELECOM Sector consists of Telecommunication Services and Telecommunications Equipment industry. Telecommunication Equipment has added more to existing strength. The leader of the Industry SIEMENS has swept past nearest resistance of 750 smoothly. The next resistance is far away at 860. Any weakness in this stock and price reaching value zone is a sure fire opportunity for a winning trade.

Telecom Services stocks have gaining further strength on the indicators, but has to reach value zone for any add on entries of new long trade entries.

HEALTH CARE
HEALTH CARE sector followed second in sector ranking today. Even here the Weekly chart is gaining bearish strength, while Daily chart is strongly bullish. SUN PHARMA is super strong here, whereas CIPLA and DRREDDY are mirroring the Index. All these three stocks can be added to watch list to trade long on weakness. Health Care equipments industry consisting of Hospitals is very strong, this industry has closed negative today. This is an opportunity to find long trades. Both APOLLO HOSPITALS and FORTIS are in value zone. Use MACD histogram up tick to trade long on these stocks. RANBAXY is weak here.

CONSUMERGOODS
CONSUMER GOODS Sector consisting Home Construction & Reality, Plastics and Detergents as a Sector is weak, with Reality Industry forming the major stocks in this Sector is witnessing huge selling pressure. Whereas Plastics and Detergents are strong. NIRMA has gained strength from weakness; it has to re-test lows before any renewed bullishness comes in. Jain Irrigation is strong, use upticks of daily MACD histogram to trade long in this stock.

ENERGY AND UTILITIES Sectors which were very weak and had no clear patterns on any levels and recommended to be kept of from trades by us in our previous post were the weakest Sectors today.

Among other weaker industries today, Fertilizer has very good chance of long trades as the Weekly chart of this industry is yet to retrace any bearishness. CORAMANDEL is a trade long stock on a daily MACD histogram uptick.

We have made a brief analysis using Sectors, Sub-Sectors and Industry Indices. Doing analysis in this way gives us a clear picture of what the stock is likely to do. Getting ourselves clear of it, we shall decide whether to trade, if so which stock to trade and so on. Top down approach of checking with the Sector, the same pattern with their Sub-sector and the respective Industry charts will narrow us in our search to trade the right stock. Then we find the stock which has similar patterns and take our trade.

So much for today, we have attached todays values for all the industries, sub-sectors and sectors on Free float. Happy trading.

 

[d_s_ramesh]

Whats in NIFTY this week?

NIFTY took a tight rope walk of Friday, though it managed to close at the highest for the immediate preceding 52 weeks. Yes you have heard it right; its a :clapping:NEW 52 WEEK HIGH:clap: on closing values for NIFTY this week. Sad is that it was not able to breach the previous high of 5310. Daily charts are robust, while Weekly MACD Histogram is still lagging below zero. Volumes have started receding and so does the daily range. Is there a fall ahead?

It seems likely, and guess what? That is a good opportunity to add to existing long or take new long trade positions too. There is a very strong chance for NIFTY to break 5300 on closing and take it to 5370-390 levels. A small profit, but a very high probability trade. Before entry a fall to value is required. 5815 - 5110 is the value zone for the next session.

Next week is a small trading week with financial year closing and a holiday, there is a likeliness of major activity in the markets. Corporates will start pulling out parked revenues from mutual funds to adjust balance sheets. This will in turn ask mutual funds to do some liquidation, though premature for the present trend of the market, it needs urgency. They will once again buy into the same market when liquidity increases in the new financial year.

This activity will provide short term traders a big opportunity. Take positions enjoy the ride. NIFTY is long on daily from 4992 and on 60 min charts from 5223 levels. Both positions have already locked considerable gains.

 

[d_s_ramesh]

A Week of mixed moves

Another week of mixed moves with industries and Sector groups juggling between them at both top and bottom. Technology Sector which leaded the ranking for the past week gave in to small weakness losing the prominence at the top slot. With all the sectors giving dismal performance, HEALTH CARE took a giant leap this week to close with 2.77% gains to previous week index values.

TELECOMMUNICATIONS Sector which went into the bullish trend after a prolonged bear hug could not stay head above water. But both Weekly and Daily charts of Telecommunication stocks look attractive. INDUSTRIAL Sector has closed the weakest with 0.89% loss to previous week’s value.

Of the weekly charts of Sector Indices, every sector shows weakness with MACD histogram staying below zero even while the price is moving above December-January highs. The only exception being TECOMMUNICATION Sector. While this is the picture on the broad view of the total sectors, Industry group charts speak a different story of each. Some of the bullish Industry groups for this week are Mining and Non-ferrous metals, Fertilizers, Auto 2 & 3 wheelers, Bearings, Cement, Cycles & Tyre, Detergents, Diamond jeweler, Leather, Pesticides and Agrochemicals, Telecommunication equipment, Telecommunication services and Hospitals.

The weakest being Sugar, Home construction, Cement Products, Telephone cables and Beverages. With many Industry groups still showing bullish strength, there are possibilities of trend continuation and new long trades from the stocks comprising the above mentioned Industry Groups which are in bullish trend.

On the daily charts the picture is totally different. Financial Sector ranks No. 1 while Telecommunication is the last.

Telecommunication Sector on the whole gave in to selling pressure on Friday, both Equipments and Services industry groups closed weak. Any bear moves in this sector as a whole is a buying opportunity. Wait till clear pattern formation to take positions. Consumer Goods Sector showed signs of recovery, as the daily chart of Personal Goods Industry have retraced a very strong bullish pattern on the MACD Lines. Hindustan Unilever mirrored this index pattern and has witnessed gains. As this stock has big representation on the index, it has single handedly managed to pull the whole sector up.

Consumer services Sector followed 3rd on the daily chart. This Sector, which was very strong in the past weeks have started retracing bearish signs, though not yet clear on weakness. TITAN is very strong here; keep a high vigil on this stock. Health care sector was weak on daily as traders started booking profits in this sector as the much expected event of Obama's Health care bill in the US was over. This Sector has some more steam left with one the Industry group Hospitals, which forms this sector is very bullish.

Stocks that need to either retrace to value or give an uptick on the MACD histogram of daily chart to trade long. Some of the Stocks which need close attention this week are as follows.
1. Hindustan Zinc
2. Coramandel Fertilizer
3. NFL
4. Zuari
5. Fortis
6. Bata
7. Siemens

Stocks that can be bought this week.
1. Sundaram Fasteners: Buy above 52.55 with a stop of 51.20 and a target of 58.70.
2. Rallis: Buy above 1218 with a stop of 1184 and a target of 1357.

The risk/reward on both these stocks looks very attractive at 4:1. As the broad market shows weakness, trade with minimum exposure so that we do not miss the rally & also be safe if we have to be caught unawares. Lets loose less on a whipsaw. Trading is a high probability game, with more than 50% of individual decisions going wrong. But, still it is a lucrative business to be in is because, even the small portion of the winning probability trades, if traded with patience has a huge potential to give back all the losses and add to it a considerable profit too.

Take small risks with a diversified portfolio, when you strike it right, hold with the position in patience, it really pays. Some individual stocks have given more than 200% profits in the past year, while the broad indices which have given just close to 100% and even industry indices have which have given a maximum of 180% gains. It needs patience to reap such manifold gains.

With most of the Sectors including NIFTY retracing very strong bearish divergence on weekly charts, once daily charts mirror weekly patterns, switch over to caution mode. Bulls take the stairs to climb up while bears jump out of the window. Falls can be drastic.

We have given the Weekly and daily free float index values in the zip file.

 

[d_s_ramesh]

Another New High on NIFTY

NIFTY is capturing New Highs with every session. Today Nifty has closed on the highest high from 25th January 2008, a 113 week high to be precise. A serious point here is that, along this presumed happy Journey of NIFTY while some of its sister indices like DEFTY, CNX IT, CNX 100 and BANK NIFTY too have given new highs, there are some serious cautions that the present market is giving us.

Volume on the NIFTY has hit more than a month low, yes while prices are moving higher, buying power is getting dried out. This is a serious caution that, I am tired of climbing, please be prepared to hold me on my fall. Isnt it amazing? There are always clues on the trail about what is going to unfold in the immediate future, only those who observe can get these early signals.

Weekly chart of NIFTY has its MACD Histogram managing to move its head above water so far this week, though it is very early to com to a conclusion on this. But the daily chart shows high strength on the MACD lines. An indication that there is a likely fall but, that is a opportunity to get in to enjoy the last ride. So be on alert to trade long on fall to value.

5375-390 is a very strong resistance area for NIFTY. While reaching there on the coming sessions, please take utmost precaution on long positions. It does not mean to exit longs at resistance levels, exit only on first signs of weakness. If there is strength on the indicators, just hold on and bank the profits.

CONSUMER GOODS Sector took lead today followed by INDUSTRIALS AND BASIC MATERIALS. ITC has single handedly managed to pull this Sector to lead the rally today. Though many other Industry groups in this sector witnessed bullishness, it was ITC the star performer in this Sector. ITC has closed on an all Time high. Automobiles-Cars and Jeeps & Plantation Industry groups joined hands with Tobacco Industry group to keep CONSUMER GOODS Sector at the top.

INDUSTRIALS were lead byCement, Engineering Heavy and Transport. While AMBUJA CEMENTS gave a strong move, ACC is struggling. Cement has retraced multiple bearish divergences on all indicators on both weekly and daily charts. On weakness setting in, ACC will lead on the fall.

BASIC MATERIALS, ALLUMINIUM Industry group registered robust gains today. HINDALCO is rocking; it has registered close to 40% gains from recent bottom.

From our calls given in our previous post RALLIS has triggered entry, while SUNDARAM FASTENERS was not. RALLIS has closed weak today, hold for stop at 1184. Weekly chart of this stock is strong and it also mirrors its Industry group chart. Even if stop is triggered there is a re-entry immediately.

Todays Free float Index values attached.

 

[d_s_ramesh]

Correction.... an opportunity.

Correction on the NIFTY at the closing hours has given an equally high range today in comparison to yesterdays range. Low volumes on NIFTY very clearly showed us that there is not much steam in the present up move. But, there is another lesson today. Even the fall did not increase volume, what does this say now? Fall is not likely to be a big one. Well it is ringing bells all around loudly to call everyones attention to the beautiful trade that is going to come on the long side after this correction. Be ready to get filled at the right time.

This trade has high probabilities on the winning side does not mean that we risk more than what our trading system permits us. Always stick to your rules, selecting these types of sure shot winners will boost system performance as well as increase your confidence manifold. This will in turn make us psychologically tuned to market moves, to take better risk at good times. It will become second nature to trade, which is the ultimate requirement, while most of the people who are in the markets do it as second guessing.

NIFTY has a very strong support at 5215-5180 levels; it is from these levels we can see a bounce. As the Daily MACD histogram is nearing zero levels, there are more chances for it to penetrate ground zero. That is another confirmation that the next up move is the last move on the bullish side and we have to be prepared on forelegs to make a U just as the opportunity opens its doors for the great short trade on NIFTY. We say that the short trade is great because, Weekly charts have a very strong bearish divergence, the present New Highs that the NIFTY is making is adding more fuel to the already spreading bearish fire on NIFTY.

SECTORS TODAY
CONSUMER SERVICES is the only sector to close positive today while all the rest closed negative. A beautiful correction was lead by the TECHNOLOGY sector today.
INDIAN HOTELS and HOTEL LEELA performed well, HOTEL industry group is already retracing bearish divergence on weekly charts and INDIAN Hotels mirrors the same. The stocks here are in the final leg of their bull moves, while still not shown trend reversal signals, buying opportunity is not available at present.

TECHNOLOGY Sector took a big beating today with both Computer Software and Computer Software Training Industry groups showing the highest weakness in todays market. Computer Software Training Industry group chart has taken to bearishness with any divergence; this is a point to note. It took a deep fall in October and from there it has gone sideways, the same is reflected in both the leaders of this Industry, EDUCOMP and APTECH.

The Daily chart of Computer software Industry is retracing bullish divergence on MACD lines; this is a very strong indicator and if weekly also shows strength, there is likely to be a rally again to value zone. Most of the stocks in this sector has had a big run up last week and is cooling down now. Watch this Industry for opportunities.

Pesticides and Agrochemicals Industry group has registered the highest gains today by increasing more that 3%. Our RALLIS stock is marching ahead in the bearish market. Hold on to this position with same stop.

Plantations Industry has registered 2nd largest gains today, this sector has more steam left in it, and there are good chances for an above 5% gains from present levels. MCLEOD RUSSEL has gained closed to 20% from its buy at 237, and has more territory to capture.

The Sector Index and Industry group Index values for today is attached.

 

[d_s_ramesh]

Bearishness Continues.

NIFTY again met with further weakness towards last hours of trading session today; there is a volume surge by 10% in the NIFTY stocks today. There is a likely continuation of bear move in the next session and as we are going into a long weekend, there is bound to be subdued performance tomorrow.

NIFTY is likely to test nearest support levels of 5215-5185 levels. Hourly charts show slight weakness on the bearish front, but, there is a clear chance to break todays low. An uptick on the MACD Histogram after the lower close will signal buy on NIFTY.

A sure shot winning trade with small profits. As of now, charts show clear resistance at 5370 levels.

TECHNOLOGY is leading the bearishness in the market. While Computer software Training Industry showed some recovery, Computer Software Industry gained further weakness with an above 1% fall on the Index.

As heavy weights are rolling down in the Computer Software Industry group, they have pulled down the whole Sector. Along with the Sector, Computer Software Industry leads the Value drain on the NIFTY Index too.

With many Industries and Sectors already retracing bearish divergence on most of the indicators, the present correction would change of those Industry & Sector groups to bearish trend. With one day left for this weeks trading, it is unlikely that there can be a big pull back to change the scenario.
Watch stocks that had renewed interest on the bullish side for the past few days that have given back more value in the past 2 days to identify the weaker one to short.

SUNDARAM FASTENERS stock got filled long today, but has closed weak, while holding above stop loss. RALLIS, has gained today, keeping bullish momentum in a falling market is in itself an indicator that this stock is a target candidate.
TELECOMMUNICATIONS Sector, has closed positive today, Telecom Services stocks are holding range on the bullish side, look for opportunities to buy into BHARTI and IDEA at appropriate levels.

 

[d_s_ramesh]

Nifty has become tighty

Extended holiday week made shorts get covered to stay away from undue risk. Otherwise market has not taken clear support or any clear pattern formation before turning up of Thursday. Range of the market has gone very much tight and volume has again gone down by 10% to previous session in the up-close today, signifying total absense of backup strength from the Bulls.

Present market needs more caution on the long trades. The way chart patterns are panning out, looks like NIFTY will reach bearish divergence on Daily charts next week and Weekly charts will give way for trend reversal.

In case of break out on the upside too, it is more likely to be a sucker of late comers. MACD histogram on the Weekly has taken its head above water with a small value above zero. At the highest levels on price a highly weak pattern for a market on the up move. All these patterns are adding strength to Weekly bearishness.

Monthly chart is retracing a very clear bearish divergence on MACD Histogram with EMA support at 4765 levels. This is the low of February, a re-test to these levels will bring bullish divergence on week MACD Histogram and only then will NIFTY get the robust strength to move up again and conquer further high's. Once this pattern forms there is all likeliness to take the market to New all time high.

Market is going to take the sleeping bulls by surprise or wake them up from slumber with a new 52 week high on the NIFTY and while they make merry, it will take a sharp 'U' turn to catch them unaware.

5370-390 is now very crucial, be on the front foot to take immediate action and cash in on the short side. Our most expected high probability winning long trade has not come. Let's wait for the next move. Patience pays, we will get rewarded in a handsome way for it.

 

[d_s_ramesh]

Promising stocks

While NIFTY is not giving much of big moves these days, there are sure some wonderful stocks to trade which are giving robust moves. Rallis was an example of it. How to identify such potential stocks in the universe of listing we have on the NSE or BSE.

This is where the Sector classification and Industry classification plays the most important role. We need not scroll through the charts of every stock to find the one which are strong and then take a decision to trade. Instead, we shall first do an analysis of the broadest classification, the Sectors. We have 10 major sectors n any economy. On scrolling through those charts we will come to know of which sector is having the strength and which of them lags or is in negative zone.

By doing this we eliminate a big chuck of stocks which would fall into the sectors which are weak. From the ones identified as strong Sectors, we go one step forward to check with the sub-sector groups of the Sectors to find which mirrors the patterns of the Sector charts. Once a sector is strong does not mean that all the sub-sectors or industries falling into that category are strong.

A live example is the HEALTH CARE sector in the present market. The sector chart shows bearish divergence, while its sub-sector Hospital Equipment and Services is very strong. Scanning the sub-sectors will further eliminate the weaker ones. Next from here, we check with the Industries that comprise the sub-sectors.

After pulling out the best and strong industry groups, we then go in further to check with the list of stocks comprising that Industry. In that we will get the super strong stock. It does not mean that the leader of the industry should move while its index moves up. A recent example is of BHARTI and RCOM. While BHARTI is the leader of the Telecom Services Industry, it did not give big moves in the present run whereas the stock has tanked by more than 4% on Thursday. RCOM being the 3rd top in the Telecom Services Industry was the strongest. At the time of entry signals. RCOM had an above 4 times Risk/Reward potential while BHARTI was lagging at close to 2. This was confirmation that RCOM was the strongest.

Today it holds, RCOM is still positive at 170 levels, getting long entry at 161.50. Whereas BHARTI has turned neutral at 300, giving just close to 5 points in the present long position.

The top performing industry of this week is Pesticides and Agrochemicals. RALLIS is the stock that pulled up this index. This stock is close to its target. With the amazing strength that this stock moved up, has made its industry index reach another peak, giving chance for further uncharted territory to be captured.

Paper Industry was the second, but this industry has already retraced bearish divergence on the weekly charts. All the current moves are adding up bearish strength to the stocks comprising this list.

The top performing Sector this week was BASIC MATERIALS and both our Pesticides and Agro Chemicals and Paper Industry groups are part of this Sector. These two industry groups coupled with Non-Ferrous Metals, Steel Strips and Fertilizers were helpful in this sector Maintaining lead this week.

The weakest Sector this week was TELECOM and the credit for making this Sector the weaknest goes to BHARTI AIRTEL. Telecom Equipments, one of the industry groups forming this sector was marginally weak. This industry group chart has very high bullish strength. Any weakness here is an opportunity to add or get into new long positions. SIEMENS is a star performer in this group. Watch out SIEMENS, it is a very good pull back buy candidate.

By going through the charts in this manner we were able to identify some good stocks with high risk/reward potential. Do not just buy into these stocks just after reading here. Please spare your time to analyze them individually, satisfy yourself about their inherent potential and risk. Only then punch your orders to buy.

Not only here, any tips or stock suggestions for that matter should go through your screening process before taking a position call. The person giving you the suggestion might be a highly experienced person, only he would know the reason behind the buy or sell. That would not give you the confidence needed when your position would be dancing to the tunes of market psychology.

Would you go into the Boxing ring to fight against Mike Tyson just like that without preparing yourself? The same way it is with trading too, prepare your mind with what the stock is likely to do. That would build confidence. There is no holy grail in the market. It is only discipline and confidence that goes a long way in making you wealthier in the markets.

This weeks stock list for your analysis basket.

ADORWELD, buy above 174.95 with a stop of 167.95 for a target of 205.95.
CORAMANDEL, buy @311 with a stop of 303.85 for a target of 338.75.
NFL, buy above 100.80 with a stop of 97.80 for a target of 149.00. (High potential)
ABGSHIP, buy above 261.4 with a stop of 250.95 for a target of 320.80.
TATACOM, buy above 284.80 with a stop of 279.60 for a target of 324.70.

All these are our observations, we once again request all those who intend to take position in these stocks to satisfy themselves in and out and only then take the adventure to add wealth from these stocks.

Too much of anything makes it bored. So we shall stop here for this week.
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[prasham]

Sir,

Are you using RSI / Stoch - 30-70 Levels? Is low volume a key factor? I have checked charts of all the above scripts and this is the most common thing that I've found.

Do you track Suzlon? Any short/medium term view? To me it appears in the same league atleast technically.