A new page on IPOs has been added today. There is still very limited content on it but we will keep adding more content on it to keep you up to date with the latest in IPOs. The Indian Markets and World Markets page has some reasonable good data. Go and check out the other pages by clicking on the links above. The Futures & Options Page and About Us page are still under construction. They should be ready in a week or two.
As this newsletter is being written, the European and American markets were trading in the green after the news came out that Warren Buffet’s company, Berkshire Hathaway Inc., has offered to take over the liabilities from bond insurers. At this moment, the Dow is up 213 points, Nasdaq up by 24 points and the FTSE up 202 points. All Indian ADRs except VSNL are in the green as of now.
Coming back to India, the Nifty closed 18 points in the red at 4838. Looking at the 30 minutes chart of the Nifty today, we find that it remained in a very narrow range throughout the day. Buying was seen at lower levels while higher levels encountered selling. We still remain in a short term and intermediate term downtrend. The short term trend will change to up when the Nifty crosses 4950. A pattern of higher highs would be formed if the Nifty were to cross 4983, a pivot high made yesterday. The next important level and a more prominent and significant pivot high is at 5168 (both these levels have been marked by the thin dotted lines on the chart). 4805 is a support level, being the most recent low. If this is broken, we are going to see further weakness.
Yesterday we had shown the daily chart of Nifty along with the MACD indicator. The details of the calculation and construction of this indicator are beyond the scope of this newsletter but as was explained yesterday, we get a buy signal when the green line goes above the red line and a sell when the green line goes below the red line. Today, we have taken the MACD on the 30 minutes chart. Not only that the buy and sell signals have been marked with arrows on the charts and we can see that they were pretty good signals. If one had taken all signals (buy and sell) on the Nifty based on the MACD from 17th Jan till today, one would have made a profit of approximately 1250 points on one unit of Nifty or Rs.62500 on one lot of Nifty (50 units). But that is not we are discussing here. This was just to give you an idea about how effective this indicator can be and this was in a market which has given many whipsaws (signals which resulted in a loss) especially between 24th Jan and 1st Feb. Another important, and the more relevant, thing to note is that the MACD has given a buy signal again today. With the stop loss (4805) only 30 points away now, this trade could easily be taken.
With the world markets remaining as they are, we may not have a negative effect from them tomorrow morning. The Nifty has been coming down since the last 6 trading sessions and it is definitely time for a technical pullback or a bounce now. Taking these factors into consideration, a buy at this level for small profits may not be a very bad idea. If at all, the markets do move against us, the stop loss is very close at hand so this may be a low risk buying opportunity.
Looking at small profits there are a few buying opportunities available. One such stock is Andhra Bank, which seems to have completed its downtrend as its downward sloping trendline has been broken. Narrow range bars in the end with high volumes may signal accumulation. Look to buy above 86.50 with a stop loss of 82.50 for a target near its next resistance near 92.
Similar chart in Alstom Projects (APIL). With a stop loss below 655, it may be bought above 700 for a target near 750.
Jindal Steel also may have completed its downtrend, though, it still hasn’t gone above its trendline. With a stop below 1900, look to buy above 2100 for a target near 2450-2500.
Happy investing!!!
As this newsletter is being written, the European and American markets were trading in the green after the news came out that Warren Buffet’s company, Berkshire Hathaway Inc., has offered to take over the liabilities from bond insurers. At this moment, the Dow is up 213 points, Nasdaq up by 24 points and the FTSE up 202 points. All Indian ADRs except VSNL are in the green as of now.
Coming back to India, the Nifty closed 18 points in the red at 4838. Looking at the 30 minutes chart of the Nifty today, we find that it remained in a very narrow range throughout the day. Buying was seen at lower levels while higher levels encountered selling. We still remain in a short term and intermediate term downtrend. The short term trend will change to up when the Nifty crosses 4950. A pattern of higher highs would be formed if the Nifty were to cross 4983, a pivot high made yesterday. The next important level and a more prominent and significant pivot high is at 5168 (both these levels have been marked by the thin dotted lines on the chart). 4805 is a support level, being the most recent low. If this is broken, we are going to see further weakness.
Yesterday we had shown the daily chart of Nifty along with the MACD indicator. The details of the calculation and construction of this indicator are beyond the scope of this newsletter but as was explained yesterday, we get a buy signal when the green line goes above the red line and a sell when the green line goes below the red line. Today, we have taken the MACD on the 30 minutes chart. Not only that the buy and sell signals have been marked with arrows on the charts and we can see that they were pretty good signals. If one had taken all signals (buy and sell) on the Nifty based on the MACD from 17th Jan till today, one would have made a profit of approximately 1250 points on one unit of Nifty or Rs.62500 on one lot of Nifty (50 units). But that is not we are discussing here. This was just to give you an idea about how effective this indicator can be and this was in a market which has given many whipsaws (signals which resulted in a loss) especially between 24th Jan and 1st Feb. Another important, and the more relevant, thing to note is that the MACD has given a buy signal again today. With the stop loss (4805) only 30 points away now, this trade could easily be taken.With the world markets remaining as they are, we may not have a negative effect from them tomorrow morning. The Nifty has been coming down since the last 6 trading sessions and it is definitely time for a technical pullback or a bounce now. Taking these factors into consideration, a buy at this level for small profits may not be a very bad idea. If at all, the markets do move against us, the stop loss is very close at hand so this may be a low risk buying opportunity.
Looking at small profits there are a few buying opportunities available. One such stock is Andhra Bank, which seems to have completed its downtrend as its downward sloping trendline has been broken. Narrow range bars in the end with high volumes may signal accumulation. Look to buy above 86.50 with a stop loss of 82.50 for a target near its next resistance near 92. Similar chart in Alstom Projects (APIL). With a stop loss below 655, it may be bought above 700 for a target near 750. Jindal Steel also may have completed its downtrend, though, it still hasn’t gone above its trendline. With a stop below 1900, look to buy above 2100 for a target near 2450-2500.Happy investing!!!
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