WEEKLY MARKET REPORT FOR TRADERS AND INVESTORS

WAVE ANALYSIS:

In 2002-2003 when Sensex came out of bear phase it had risem 115% in just 10 month and immediately gave 60% correction in just 6 month of that!

Now in 2008-2009 similar phenomena seem to be taking place when Sensex came out of bear phase and it has risen 117% (17493) in just 7 month!

If history repeats then we can see Sensex falling to 12000-11800 levels by march/April 2010 or even earlier than that.

As per Dow theory and Wave Count the Index should move in higher top and higher bottom formation to keep the bull market intact. If Sensex crosses 17500 levels which is the latest higher top after creating low of 7700 on 27/10/2008 then it will open the door to 18100/18900 or even to 19500 levels based on Dow, Wave, Triangle, head and shoulders, and cup and handle formation. But for this Sensex has to close above 17500 on weekly basis with significant higher volumes.

Weather history repeat or not our advice is to book profit and keep maximum cash levels on hands and wait if Sensex correct to 12000 or cross 17500 levels. We are keeping close eyes on all this parameters.

Please also read out previous posts on the same RED ALERT.

GLOBAL MARKETS:

DOW JONES

A closing below 10230 will take to 10000 and even to 9800 level.

HANG SANG

A closing below 20900 will confirm the head and shoulder pattern correction and can fall to 19500 levels.

FTSE

A closing below 5100 will take to 4700 or even below as per pennant formation on daily charts.

FUNDAMENTAL PICK:

Eimco elecon, Target 500.

The Co. manufactures mining and construction equipments.

It is India’s is forth largest in terms of coal reserve and third largest in terms of production in the world.

In India coal is used in various industries like electricity, steel, cement, fertilizers, chemicals and paper.

In India in the next 10 years there will be investments of 18000 crores to develop the coal reserve.

Apart from coal India is also planning to develop the reserve of copper,zinc,gold,uranium and manganes by investments of 25000-50000 crores which is likely to benefit the company.

The Co. also manufactures the construction equipments. The current size of the industry is 10000 crores and growing at healthy 30% and is expected to continue to grow at faster rate.

MUTUAL FUND PICK:

Tata tax saving fund: Avoid

Reason: Fund managers have failed to give long term return to investors.

WEEKLY MARKET OUTLOOK:

Nifty Future:

Support at 4850-4750

Resistance at 5050-5200

Buy above 5095 stop loss 5020 target 5180-5200

Sell below 4875 stop loss 4950 target 4790-4750

TECHNICAL STOCK PICKS:

Ultratech Cement: stop loss 840 targets 930-955

Mphasis: stop loss 680 targets 750-770.

Austral coke: stop loss 8 target 13-14.

Ruchi strips: stop loss 8 targets 15-17.

KEY NEWS TO WATCH OUT NEXT WEEK:

No key news to watch out for the next week.