Daily commentary: 12 12 2014

Market was flat for the last trading day of the week. Nifty and Sensex ended negative. Today NSE benchmark Nifty closed -0.81% low and BSE Sensex with -0.91%. Traders remained cautious ahead of IIP and retail inflation data to be released later in the day. BSE oil and gas index hit 7 months low.  Today’s fall is the biggest fall since July.

The movers of the day are Ultratech Cement , Maruti, Lupin, Ambuju Cement and Sun Pharma . And the top losers of the day are GAIL, Tata Steel, CAIRN, ONGC and SSLT.

The entire Broad Index ended up red. With Midcap and small cap poorly hit. CNX pharma was up by +0.23%. India Vix was up by +7.67%. Wherein Crude oil fell below $63/Barrel

Asian markets closed mixed. Japan's Nikkei finished 0.66% higher, Hong Kong's Hang Seng was down 0.27%, and China's Shanghai Composite was up 0.43% at the end of the day. US futures are also sinking.  China's industrial output grew by a less-than-expected 7.2% in November from a year ago, but retail sales rose 11.7%, beating forecasts.

As there was a weakness seen in stocks and US dollar; gold were up by 3% putting it us the biggest rise in last 6 months in global markets. The entire precious metals even silver and platinum are showing some rise.

Daily Commentary: 10/12/2014

After 3 day continues fall today Market closed marginally higher. Nifty was volatile with +0.18% and

Sensex also closed higher yet out of 30 scripts only 13 were on positive note. Meanwhile, ONGC, SBI,

Tata motors were the limelight stocks for the day.


Traders are still cautious over market as there was not directional cue from today. Market breadth on the

BSE remains healthy 1,587 shares advancing and 1,176 shares declining. Foreign Portfolio Investors sold

a net worth Rs 221.52 crore on Tuesday as per provisional data. India VIX was negative by -2.02%

The Top Movers of the day are SBIN, Jindal Steel, ONGC, PNB and Bank of Baroda. Top losers of the

day are NMDC, BHEL, HUL, GAIL and Tech M.


As Chinese consumer inflation was reported to be 5 year low Chinese market +3% higher to yesterday.

Weak crude oil price and pull-down in US Market affected Japanese market due to which Nikkei was low

by -2%


 However, BSE Capital Goods, IT and FMCG are losing sheen and are down between  -0.4 to -1%. Yet,

Midcap and small cap closed higher and stool as outstanding index for the day. Meanwhile, Government

is thinking to conclude coal linkage rationalization an and swapping agreement for terenal project wich

will save 6000 crores . This is going to benefit power projects of companies including Adani Power,

Indiabulls Power and NTPC, among others.

Market Commentary:12/9/2014

Major Indian Index Nifty and Sensex opened negative and after two failed attempts to stay positive Nifty Slipped -1.16% and Sensex slipped -1.15%. Both the Indices gave conformation of 20DMA negative breakout which happened yesterday. Indian Market ended up its 8 week low.

Today all the major Indices were negative; India VIX was up by 2.36%. The major losers in stock are SSTL, ONGC, Tata Power, Tata Steel and the top gainers are M&M, Dr. Reddy, Sun Pharma and HCL Tech  

Most of all Asian Markets are in negative in which Chinese market fell over 5% creating a major fall since 2009. Meanwhile Brent Crude oil hit its 5 year low at USD 66/Barrel.   

Technical Analyst predicts 100DMA can be the next support for Nifty and Sensex. Indian stock market is likely to consolidate further this week. Traders say weak global cues and rise in current account deficit (CAD) is the major reason for today’s fall.

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Renuka Sugars: A view

Renuka Sugars

India is a handsome consumer of sugar nearly 23 million tons annually. Recently WTO’s stand on export subsidy of raw sugar and Indian’s stand on import of sugar had bought Indian sugar companies in demand.  

"There was an import parity but mills were not signing deals, expecting revision in the import duty. At 25 percent duty, imports are not viable," said a Mumbai-based dealer with a global trading firm.  As per times of India.

From last few days we are able to see upside movement and the stock is near to the downtrend line. If there is a breakout the stock might show the reversal and currently MACD have shown a positive crossover. And RSI is showing bullish signs.

If the stock fail to give a positive breakout it have a support at 14.58. currently the stock is near to its low. 

Reliance Capital: A View

After, Modi coming up with new banks license in India all the trader in the stock market are having a keen interest on the stock which is getting the banking license. Among which we have Reliance who is a big player and the chance of getting the permit is very high.

Technical Perspective

The stock is showing the divergence and we can see a falling wedge pattern . On 9^th September 2014 the stock had given the positive breakout and the on 10^th September 2014 i.e today the stock had shown a Doji. And we can see the can open with a positive note tomorrow. If not; the stock can end up falling to 500 which is the immediate support. And 577 and 670 are the good resistance. The stock has a potential to make a new high.

Additional Observation

The stock is showing negative correlation from last 6 months and we have to see that the patter will continue or the old pattern will repeat. 

Gold Rush is Back?

Iraq is now a hottest topic to be spoken in Financial Market. Every country now fear the oil risk which will affect the CAD and boost us inflation. It is always seen that when inflation rise, it also boost gold price as most of the investor think gold to be the safe heaven in a economic crisis thus having a positive correlation between crude oil price and gold price

Every nation is looking at the worst case senior of Iraq. As there is no help/aid form Uncle Sam nor any dominant countries interested to involve in the war, thus making Iraq indulge alone on its own.  Britain is proactive rising interest rate suspecting the oil risk and inflation. For any country the worst case scenario can be a rise in underling crude oil price up-to 10-20%. And this can be seen for next 3-6 months.   

Technical Analysis on Gold

Compared to silver, gold haven not shown any bullish indication as such; except an doji formed on last trading day. The previous pattern seen in gold was a descending triangle pattern and thus gave a indication that the gold rush so called is going to end. but the Iraq was gave a new twist and turn in the price pattern. As per now there is high chance that the gold can make a turn around and stay above 28K. Still 31K is a good resistance. This Iraq crisis will have a short term implication on crude as well as old. Few Indian Jewelry are in a bad condition and this rise in gold price will also affect them. 

Fig1

Fig 2

Technical Analysis on Request:S&P CNX Nifty

It is been a massive change in Market dynamics after a terrorist organisation i.e ISIS had captured cities of Iraq. We have seen this implication on Capital, Forex and Commodity. There are few important things we have to understand regarding Iraq, that  is the country is a dominant exporter of oil in OPEC countries and an 2nd largest exporter of oil to the world and hold around 10% of world oil reserve.

Crux of the issue

The recent terror unrest caused in Iraq is directly implicating on world crude oil and that is causing a domino effect on all stocks and commodities all over the world. 

Apart this, we have report saying ISIS are targeting major oil refineries and had hit the countries one of the biggest oil refinery  which supply countries quarter of the oil Demand. 

All the above points mentioned are systematic risk and they are unavoidable and cannot be controlled by a individual. If there is a continuous rise in crude price, it will have a  negative effect as the rise in CAD,  falling rupee and high inflation are unhealthy for the Capital Markets/ Nifty. 

Market Bullish Triggers

Apart Monsoon and Budget result are the most expected result which will trigger a rally. 

 Technical View:

We are clearly able to see that RSI had given a bearish signal and MACD had also given a Bearish crossover see fig 1. Yesterday was a bearish candlestick. Till now the direction is not clear and we still need conformation of today's market. If today is bullish then market we will see a small rally probably making a higher high. If today turns to be a bearish day then market will find a support as  given in fig 2. 

Fig 1

Fig 2

Combo Technical Analysis: Reliance and Century Textile

Reliance Industries
My last 2 articles on Reliance have lead to a profit of nearly 20%. Now The stock is making a bearish Engulfing and Negative reversal on RSI

Century Textile

From the previous article on Century Textile the stock had made 34% Profit. Now the stock is making a bearish engulfing and can show a reversal after a downside breakout 

Click here

Analysis on Request: Gitanjali Gems Ltd

Gitanjali Gems on a Glimpse:
Most of all companies who are into Gold business have been badly hit by the Raghuram Rajan's measure to control deficit last year. Which eventually affected the stocks like Titan, Gitanjali PCJ, TBZ etc. But the most important fact for the observation here is Gitanjali have Rs.3000cr as Debt and there net profit is growing year by year. The stock need to recover from the Raghuram's policy. Along with it, the end of Gold Rush saga will also bring a huge impact on companies operational activities

Recently, RBI eased gold import rules which benefited various people like jewelers, traders, Bullion dealers and banks. But, Raghuram imposed many other  restriction on gold apart import restriction like transaction tax and curbs on ETF. The underlying demand for gold is unchanged and company have potential sales opportunities. I am expecting munch more friendly measure so that it benefit companies like Gitanjali Gems.

Technical Analysis

Technically this stock is strong and recently shown a major crossover of 100DMA & 200DMA. Currently the stock is in consolidation. Untill and unless I see the reversal it is unclear to comment on it. 

Glenmark Pharma: An Fundamental+ Technical View

Fundamentals:
The stock is a buzz in every fundamental analyst perspective. And I personally had a look at this industry. And the company is performing good in Indian market majorly capturing heat, breathing, anti-infection and skin segment. All segments are performing a single digit growth (1-5%) yoy apart skin(which is giving +8% growth). I feel the stock had consolidated more than its value, after making a yearly high in recent days.

Technicals:
The stock can currently give a 14% return within few months. And the stock had bullish crossover of (100 & 200DMA). It has also withstood and sharp correction recently, currently the stock has shown a reversal at its support i.e @510. As per my analysis the stock is potentially good in Indian market. And 550 &610 can stand a resistance. This stock can surly be a multibagger if its quarterly & yearly performance is showing the same growth. 

Century Textile

Technical Analysis on Request: DLF Part-2

The stocks like DLF are always volatile and need a keen understanding for trading. Currently the stock is making a bullish divergence and finding support. No reversal is seen


Kindly note: I am a MBA student. Not a certified adviser and I suggest my views on stocks and commodities never recommend for a buy/sell.

Technical Analysis on Request: Aurobindo Pharma

No one are bearish on  Aurobindo Pharma. But, technically I am able to see a rising wedge in this stock along with it. I am also able to see a bearish divergence in this stock

 The stock will be bearish after an bearish breakout in the trend

Technical Analysis on Request: Reliance, Why trader are bullish on Reliance?

From last few days Reliance is a buzz in the mouth of every investor. In my last article I had only given my views on Reliance. Today, I will let everyone know why traders are bullish on Reliance?.
Click here to read my last article 

 As per the current scenario the stock has given a bearish breakout and the stock has started correcting as you can see in the chart below

 "Inside Funda"

From last April 1st 2014 both Relaince and 13 Urea companies have failed to settle the price of natural gas supply rate and the issue had knocked the door of our oil minister Veerappa Moily. And the issue of keeping gas price below half of the global price is the main funda behind. So, Moily Had given a press relies saying

"When the proposal came to me, I rightly ordered that after the model code of conduct is lifted, (the) price may be announced for the quarter July-September and also for the quarter April-June, as per the approved guidelines by the cabinet,"- by Mr Moily 

What is the problem?

RIL and urea companies failed to settle the key terms of gas supply from 1 April on expiry of the five-year contracts that priced gas from the eastern offshore KG-D6 fields at $4.205 per million British thermal unit (mBtu). While RIL agreed to continue supplies in the interim period, the dispute pertained to the rate at which consumers should provide payment guarantees—the expired price or $8.34, which would have been applicable from 1 April had the Election Commission not postponed implementation of the Rangarajan Committee formula till completion of the general election.

"Moily's Game Play"

Reliance and Mr.Moily is are under a pressure of Election and Moily had informed that he will implement the price with a special formula

But, India's main opposition "Bharatiya Janata Party (BJP), widely expected to win the most seats in the election and oust Moily's Congress party-led government, has said it would review the gas pricing formula if elected. " (as per a National Newspaper)

Conclusion: More than Technicals, I trust to keep a keen eye on News and information because that will drive this stock.

Source: livemint.com, Economic Times, NDTV 

Technical Analysis on Reliance Industries PART-2

As per now, we have seen a bearish breakout in the trend. It was obvious as there was a negative reversal building up in this stock. As the stock was between 840-925 for a long time. As per my analysis, the stock is healthy until the long moving average are giving bullish signal.  

Technical Analysis on SBIN (State Bank of India)

I m looking SBI for a correction. The stocks is at its resistance and if the trend line gets broken the stock will drop at its support 1837. 

Techncial Analysis on Request: Tata Global Beverage

There are no major buy signal on this stock. The RSI had made a negative reversal the upside resistance is 3% from the last closing price. Support is at 153. 

Technical Analysis on request: Adani Power

The stock is in a correction phase and it will correct till its support at 56/41. MACD has also given a negative crossover

Technical Analysis on Sintex Industries Part-2

In my last article I had given my views on sintex and the stock has 56% profit(Click here to read my last article). Now the stock will correct, as the oscillators are giving negative divergence signal. The stock has a resistance at Rs.51-52 and support at Rs.43/Rs.37. Keep looking at the trend-line if there is a dowside breakout the stock will rest till its support.  

Negative Divergence

Technical Analysis on request R Power

The stock has clearly given a reversal. If anyone have holding, it is better to  hold. The resistance are as follows 77/88/107/120. The stock is a safe heaven above 60. Below which, the stock will again turn a bearish stock.

Technical Analysis on Request: Reliance Ltd

From last few days Reliance is a buzz on every investors mouth because the long moving averages have made a bullish crossover. The stock has given a Golden Crossover (bullish cross) which is basically a powerful crossover and well trusted one.

  

Normally, a stock with golden crossover is expected to be a multi-bagger stock. the short term resistances are 1020/1050/1100/1150. The supports are  920/850 and other multiple supports

  

Technical Analysis on Request: RCom

After a short correction, making a high of 160. The stock had shown negative divergence and started correcting. Thus forming a Flag pattern. In another perspective we can even see  Descending Triangle. It is clear that the stock has given bullish breakout in both Flag and Descending Triangle.

The Technical Indicator MACD say a different story: It is about to give a bearish cross-over. RSI had touched overbought level and now at a neutral zone.

The price recently gave a breakout in 200 day moving average and was not able to sustain the trend and started correcting.
 
Strategy: As MACD is a Moving Average based indicator and it is worth trading the pattern. currently the support is at 110 and resistance is at 160. Let the correction happen if MACD give a bearish crossover we can wait till 110 and if the stock don't show any reversal and continue to be bearish it is not a worth buy. If it show a reversal and give a conformation by crossing 200 DMA. It is on a bull run. 

Idea Cellular: continuation of downtrend (Technical Analysis on request)

For a few days from now the Idea  Cellular was making a bearish divergence on RSI and today it has given a downside breakout. which will lead the stock price to 125 or 101 within next few months. Here in the picture below we can see that the stock has given a downside breakout for the divergence

The possible supports for Idea

When we see at larger picture of Idea cellular we  can see that the stock has given a breakout(Downside/ Bearish) and failed to regain the bullish trend. Thus leading the stock into downtrend. Most of all major moving average namely 50DMA, 100DMA, 200DMA have given a negative crossover which is now making this stock a unfavorable piece of stock.  

Trading Sintex Ind's Ascending Triangle

As per the observation the stock had performed well in market. From last September 2013, now the stock is giving clear indication of a continuation and the stock price is expected to move up to 43/52 which are the next potential resistance.

The RSI is above 70 and making a bearish divergence thus forming the stock as a risky trade and can be advised to traders with quick entry and exit strategy.