WEEKLY MARKET REPORT FOR TRADERS AND INVESTORS: 10/01/2010

WEEKLY MARKET OUTLOOK:

Nifty Future Support at 5150/5000

Nifty Future Resistance at 5350/5400

Trading Strategy: no trading strategy.



Commentary:

           In last week analysis we had advocated that if sensex manages to close above 17500 on weekly basis with higher volume then bearish conditions shall recede and shall open the gates for 18100/18900 and eventually 19500 targets for sensex. The upside targets for Nifty and Sensex are given on the basis of various technical patterns and our own ‘special technical theory’ and also by use of mathematical formulations as given in last weeks weekly report. The details of our said previous charts and projections for nifty and sensex have been given below with the charts, dates and links for the original update.

After the above situations there were lots of mails and phone calls on us and asking that is the worst over now? Our humble reply was of the reply any experienced and sophisticated trader would do. In our opinion successful trader is the person who follows the trend with stop loss!

          In our present case we are considering investments at this 17500 level but we are suggesting to put a stop loss level at 15300 which is the last higher bottom formation, due to reasons ranging from not just the technical support but threat of unemployment problem worsening in USA, beginning of monetary tightening from RBI and fears of rising food inflation resulting in stringent government actions.

          As shown in candle sticks chart-3^rd higher top is higher than 2^nd higher top and 2^nd higher top is higher than 1^st higher top.

          Similarly as shown in the same chart 4^th higher bottom is higher than 3^rd highe bottom and 3^rd higher bottok is higher than 2^nd hogher bottom, and 2^nd higher bottom is higher than 1^st higher bottom.

HIGHER TOP-HIGHER BOTTOM FORMATION CHART.

10 november 2009: 2nd time published report for Nifty Target 6900:
Link: http://www.meghainvestments.com/2009/10/nifty-to-make-new-high-second-time.html


13 Sept 2009: Nifty hourly chart, Target given 4925:
http://www.meghainvestments.com/2009/09/hourly-chart-target-4925-sl-4780.html        

13 Sept 2009: Nifty Target given 5300 and 5500:Link: http://www.meghainvestments.com/2009/09/nifty-daily-chart-5300-5500-view-6-8.html

13 Sept 2009: Nifty Target given 6900:

Link: http://www.meghainvestments.com/2009/09/nifty-weekly-chart-target-6900-view-12.html

12 Dec 2009: Sensex Daily chart,  Head and Shoulder Target given 19500:

Link: http://www.meghainvestments.com/2009/12/sensex-daily-chart.html

12 Dec 2009: Sensex Daily chart, Triangle Target givne 19500.

Link: http://www.meghainvestments.com/2009/12/sensex-daily-chart_12.html

TECHNICAL STOCK PICKS OF THE WEEK:
DLF:
In last week we saw trading interest in this biggest reality counter. The stock risen about 5 percent throughout the week. One may buy this counter with a stoploss of 364 and terget of 409, 423 and 438.

UNITECH:
Another one of the top five reality counter seems to set to give some new year gains. this counter has not shown momentum in comparision with its peer DLF. We recommend to go long with a stop of 81 and keep targets of 92/94.

FEDERAL BANK:
Technically this banking counter is looking good for a view of one week. keep a stop of 238 level and aim for the target of 258/266 and 274 gradually.

LIC HOUSING FINANCE:
Any technical trader may buy this counter with a stop loss of 797 and targets of 861, 880, 899. This enough ran housing finance counter seems to still not showing any signs of easing up. There is no expert view on going ga ga on housing finance sector. Nevertheless two to four stocks are not a great scenario to give any fundamental coverage.

EKC:
Buy with very short term targets of 157/160 and 162. Keep stop loss of 147.

FUNDAMENTAL STOCK RECOMMENDATION:
RATNAMANI METALS AND TUBE.
CMP is 110.
Upside projected Target is 200+.
Rations: The company is into manufacturing of  steel pipes and tube used in oil and gas and engineering. As all are growth sectors, this company has good opportunities for progress.

MUTUAL FUND PICK:
Dsp BlackRock Balanced Fund.
Recommendation: Buy.
Ration: This fund has been able to show good performance in last 10 years, and also maintain optimum balance of debt and equity instruments in its portfolio as preached.

KEY NEWS TO WATCH OUT NEXT WEEK:
12 January- Release of IIP (Index of Industrial Production) figures.
14 January-Release of monthly inlflation data.
Beginning of 3rd Quarter result announcements.