Weekly technical Analysis for week ended 29^th November 2014

Nifty started the week forming all time high and there after it slightly drifted downwards and there after started to move up and on Friday it moved vigorously and closed the week at all time high. Nifty opened at 8490 made a low of 8429 made a high of 8617 and finally closed at 8588. nifty has move and taken support at the 20 day EMA ( nearly) and then started to move up during the last week. This move is indicating that we might see further upsides before any correction sets in. During the last nine months nifty has been moving up and coming down and taking support at 20 day EMA and then move up this has occurred so many times and now also 20 day EMA has offered good support. Considering this we can assume that the 20 day EMA would offer support for any correction. It is at around 8378 so we are nearly 210 points from those levels. So we expect the market to consolidate slightly and then move up. RSI is at 73 levels at over bought levels and it has been maintain at those levels for last two months. The over-bought levels is an indication that the bulls are strong and any down move has all chances of being bought into till proved otherwise.

Above chart is the Elliot wave breakup of the up move which started from February 2014. All the waves are perfectly falling into place it appears that we are in the 3^rd wave of the wave-5 of larger wave-C. Elliott wave has given a minimum target of 8570 and indicated that nifty has chances of moving towards 8700 levels the first target has been achieved and we might as well progress towards the 8700 levels and we would look into further targets once 8700 levels are taken out till then wait for the targets to be achieved.

May all be Happy and Peacefull

M.Mahiidar

Enjoying Life

Trend is Friend.

USDINR has move above the crucial resistance level this week it closed above 62 after nearly 21 months( a Fibonacci) which is a very good technical indication. I have been waiting to close above 62 post the update. USDINR has been consolidating between 60.50 to 62 for last 5 months in the week ended 22 november it moved above it but closed below 62 but this week it moved above it and weekly close was also above it, which is a bullish signal for USD. The break out is indication that we might see it inching upwards in the coming months. It appears that it has all chances of making a new high. I can move above 70 in coming weeks so, we have to prepare for it.

Now we look into the Elliott wave- analysis of USDINR.

 The long term chart of the USDINR is furnished above; the chart is for more 40 years. It can be seen in the above chart that USDINR is moving in a channel and till now its intact in the coming weeks we might see it again moving above it before a correction can set in, this is also an indication that we have all chances of seeing a new high in USDINR. Given below is the Elliott wave break up of the wave indicated in blue circle above which started from the low of 39 in 2008.

  

 The above chart is the USDINR chart from the low of 2008 onwards, the wave-1 wave from the low of 39 to the high of 52 which lasted for 69 weeks. There after stated a consolidation, the wave-II which was a double combination a zig-zag and a triangle, the wave-II ended at 43.84 a fall of Rs.8.29 a fall of nearly 61.80%( corrected 63%) it lasted nearly 125 weeks there after stated the wave-3( larger wave) from around 43.84 we are still in forming the wave-3 only. The wave-1 of wave-3 was from 43.84 to 54.32 a rise of Rs.10.48 in 20 weeks there after the wave-2 of wave-3 stared and fell up-to 48.60 in 7 weeks. There we started to form wave-3 which started to break into its components as of now wave-1,2 of wave-3 of larger wave-III have completed and it seems we are in the wave-3 of 3 of larger wave-III, the wave-3 is further breaking into its components and we seems to have completed the wave-4, of 3 of 3 of larger wave-III. Now it seems that we might have stared the wave-5 and it seems that its again breaking into its components and we have to see whether it would move above the all time high. As the larger wave-III has not still completed and the completion seems to be far away as there are so many waves still have to be formed and we can expect the USDINR to move substantially from current levels. will we see a new high before budget we have to wait and see.

May all be Happy and Peacefull

M.Mahiidar

Enjoying Life

Trend is Friend.

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Bambino Agro- Rs.95/- the stock has formed a all time high after nearly 20 years which is a positive sign. The closing above the all time high after long time is an indication that the bulls have been decimated after a very long time and the chances of moving substantially from current levels.All time high after long time always warrants a buy but with stop loss(to protect capital). The fundamentals have been stagnant for last few years for the the financials have been started to improve from last few quarters. its TTM EPS is nearly the double of that of last year indicating that the fundamentals have started to improve and that coinciding with all time high is an indication that the investors are expecting further improvement in financials in coming quarters or years. So fundamentally and technically it appears to be a good buy with stop loss at Rs.73/-

May All be peaceful and Happy.

M.Mahiidar

Enjoying Life

Trend is Friend.

Ador Welding-Rs.227/- seems to be consolidated for last 5 months. One bullish signal is movement is 100 week EMA above 200 week EMA which is generally very strong indication to buy. Previously this happened in 2003 then the stock moved nearly 20x. Once it makes a new 52 week High it becomes a buy with stop loss below-Rs.190/-. Fundamentally its a very good company but financial performance for last years is not satisfactory. So if the Infrastructure sector has to perform this stock should go places from here as its products are required in every facets of infrastructure.

May all be Peaceful and Happy
M.Mahiidar
Enjoying Life
Trend is Friend.

EMCO ltd- Rs.43/- has moved above 200 week EMA for the first time after july 2008 ( more that six years)which is a very good sign as far as bulls are concerned. Generally these long term breaks generally signal change in trend in the concerned stock. 200 month EMA is at 52, any move above 52 would certainly indicate bullishness in the stock. The stock moved above 200 week EMA and has been consolidating around that levels for last six months and now seems to have just starting the move giving a good margin of safety for the stock.The volumes are also suggesting that interest is coming into the stock. The fundamentals are not much as on date but has turned positive in the last few quarters. So its a good technical buy with good margin of safety.

May all be happy and Peacefull

M.Mahiidar

Enjoying Life

Trend is Frend.

Weekly technical Analysis for week ended 15^th November 2014

Nifty made not so much during the period, but it made an all time high which is a positive indication for bulls. Nifty opened at 8337 made a high 8415 made a low of 8304 and finally closed at 8389. This week’s close is above previous week’s close which is a positive indication for bulls. So now it appears that the market might continue to move up making new highs. The Market is indicating that I might have slightly tired and would want to consolidated at these levels for some time now and then would make an attempt at the all time high again to achieve the targets mentioned as per Elliott wave. The distance between the 20 day EMA and the price is slightly come down and now at around 180 points if the it comes down to 100 points or so we can expect it move further. If it takes support at 20 day EMA nothing like that. So we have to see what the market is in store for us. The market is moving in close range for last two weeks which generally points out that we might move in one directing post that which would generally be a good move.

Elliott wave analysis

As market is moving in very close range there is nothing much happening as per Elliott wave. I have slightly added the wave count to wave-3 of wave-3 of large wave-5. It seems that we have completed wave-i and wave-ii and we are still forming the beginning of wave-iii. But if the market moves below 8290 I would have to change the structure. So as of now the target indicated by elliotte wave indicated by me nearly one month back of 8570 levels still holds good we are slowly moving towards it. So have patience and wait.

May all be peaceful and Happy

M.Mahiidar

Enjoying Life

Trend is Friend.

Jindal Saw:Rs.98/- the stock has moved above 200 week EMA which is very bullish signal. Please look at the volumes also they are very very huge indicating that good amount of interest is coming into the stock the stock was accumulating below 200 week EMA for last five months and this month it has give break out from consolidation which gives us an indication to buy. So technically the stock is a buy. Fundamentally the stock financials have deteriorated during last five years and now seems to have turn around. The company had an EPS of (-)Rs.3.50 for Fy-14 but the TTM EPS is around 8.5 which is clearly an indication that we might be seeing a turn around in financials and this seems to be reflecting in the stock price. So it warrants a buy with Stop Loss of Rs.70/-

May all be Peaceful and Happy

M.Mahiidar

Enjoying Life

Trend is Friend.

Crude has been falling continuously for last five months, we have to see whether any further down sides exists or not. The above chart is of Brent crude as of not is at around USD80. It can be seen in the chart that brent is exactly at the trend line of last 15 years. During these years it has not broken below it so we can expect the crude to bounce from these levels. Also not that the 200 month EMA is around 72 levels and during last one and half decades it did not go below it heavily it bounced from it two times during last one decade. So we can say that crude is at-least bottoming out and we can expect bounce from current levels or on slighly moving from these levels. 

May all be Peacefull and Happy
M.Mahiidar
Enjoying Life
Trend is Friedn.

Zee Entertainment Ltd:Rs.374/- Zee seems to be forming a expanding triangle pattern over last 12 years and now we seem to be in the fifth wave of the same. As per the pattern the current up move or wave should go all the way up to touch the trend line indicated by red arrow which is around Rs.620 levels which itself is nearly 70% upsides from current levels. Generally the fifth wave is more violent and goes on to move above the A-C line violently and we can expect the stock to double from these levels over the period of time. Its all time high is around Rs.800 and we have to see whether it would touch it or not but as of now is a technical buy. Fundamentally zee needs no introduction it has been a fundamentally sound company and continues to do so. Considering this is appears to be a safe buy at current levels with Stop Loss around Rs.320 levels.

May all be peaceful and Happy

M.Mahiidar

Enjoying Life

Trend is Friend. 

Bank of baroda-Rs.1012/- seems to have formed a Head and Shoulders pattern over a period of two and half years and nearly 34 months( which happens to be a fibonacci). The long period of consolidation is a very good indication that the stocks is poised for further upsides. It would surely surpass the all time high in coming days or weeks. The only draw back is the volumes on break out are not heavy, this is the only draw back other wise the patter is perfect so we have to see for volumes pick up in coming days/weeks. So now comes the question what would be the target for the break out is Rs.550 from Rs.1000 which comes to around Rs.1550 which is nearly 50% from current levels. Stop Loss Rs.850/-.

May all be Peaceful and Happy
M.Mahiidar
Enjoying Life
Trend is Friend.

Talwalkers better value Fitness:Rs.242/- the stock has made a 52 week high on heavy volumes indicating that the stock has poised for good up move from current levels. Fundamentally the company is performing very well, its EPS is increasing from year on year for last five years which is a positive indication and it is clearly indicating that the up-move in the stock is justified. Fundamentally and technically its a good buy.

May all be happy and peacefull
M.Mahiidar
Enjoying Life
Trend is Friend.

GIC Housing Finance- Rs.180/- the stock has formed a new all time high, after nearly four years of consolidation which is a bullish signal. The all time high after consolidation above the break out trend line for six months. As it has made an all time high post consolidation give us high margin of safety to enter into the stock.Fundamentally also the company is performing very well for last four to five years. Its EPS is continually increasing over last five years except for one year which is a clear indication that the fundamentals are also supporting the up move. But technicals and fundamentals are supporting the stock which give a clear indication that its a good buy. One point to be noted its one of the cheapest stocks among the housing finance companies. So a good buy with stop loss at Rs.150/-.

May all be Peacefull and Happy

M.Mahiidar

Enjoying Life

Trend is Friend.

Thermax -Rs.1013/- Thermax  has made an all time high after nearly six years which is a bullish signal. All time high is always a buy with stop loss. The stock seems to have formed Cup and Handle pattern over a period of six years which is a very bullish sign. The stock has broken above the neck line and is staying above it for last six months which gives us enough cushion and also margin of safety to enter into the stock. The target as per the C&H gives are target of around 1700-1800 levels a rise of 70%-80% from current levels. Till it stays above this pattern we have all chances of seeing the target. Fundamentally also the sock fits into investment strategy. The fundamentals were stable for last two years and the TTM EPS has increase by 25% which is giving an indication that the fundamentals might be improving and the up move is justified. But in Any case we should have our stop loss which should be below the confession area of last six months i.e. Below Rs.800/-

May all be Peacefull and Happy

M.Mahiidar
Enjoying Life
Trend is Friend.

Investment strategy

Generally it is said that there should be KISS (KEEP IT SIMPLE STUPID) strategy to be successful. The same works for investments also, anybody with little knowledge of the market has all the chances of making excellent profits if he develops a system and adheres to it irrespective of the market. With little technical analysis the person can be successful and multiply his money with little rise. But in any case the stop loss should be strightly adhered to as the primary motive is to protect you capital. If anybody is not in favor of stop loss then stock market is not for him.

This method which I am indicating is very very simple and can be adhered to by investors so that they keep on multiplying their money over period of times. You might be wondering what the system is which can give consistent gains. The method is 200 day EMA (Exponential Moving Average). We would discuss the method in details below.

Generally it is said that bulls rule above 200 day EMA and bears rule below it. So the method says that when the stock price moves above 200 day EMA then we have to buy and when it moves below it from above then we simply have to sell the stock and shift to other stocks which are above 200 day EMA. Generally the rule is if the stock price is above 200 day EMA the stock continues to move up over a period of time and after a sustained move it might again move below it. if the stock price is below 200 day EMA it continues to move down till the time arrives when it move above it. When an individual buys a stock expecting it to move up so if the bulls are active then the chances are that it has all the chances of moving up, as above 200 day EMA bulls rule odds are in your favor and it makes sense to make an investments. I have seen over a period of years that irrespective of state of the market this systems works. I bull market its give spectacular results if an individual gents into a good stock.

So the question now comes whether all the stocks which move above 200 day EMA are worth a buy? The answer is no. Here fundamentals come into play. You should buy into the stocks which are fundamentally good and or fundamentals are improving.

Now comes the question as how to judge the fundamentals. The company should be in profits for last two years at-least, if they are in increasing trend then in would be better. Its latest quarterly results should show profits, it would be better there is positive increase in quarterly results. The higher the increase the better. If the above conditions are met and the stock moves above 200 day EMA then we can be sure that we might be in the stock which is fundamentally improving and bulls have taken charge and we can expect the price to move further. If the stocks goes on to make a 52 week high post it moves above 200 day EMA then we can be sure that we are into a good stock and we can expect further upsides.

After move above 200 day EMA, the stock moves above and moves above 200 week EMA then it re-affirms the decision buy us and actually we should add to our existing position on movement of weekly MA.

If the stock move above 200 day EMA and you missed the stock to buy the same and after some time it comes down and takes support there and then starts to move up then it is also a good opportunity to get into the stock and also add into the existing position. The support at 200 day EMA is an ample proof that bulls are ruling and confirms our stand.

In all the case the stop loss should be on movement or close below 200 day EMA.

May all be happy and peacefull

M.Mahiidar

Enjoying Life

Trend is Friend.