Sensex needs a breather after the run up ….

Sensex Technical View :
Sensex finally took a good breather or got exhausted technically after so many gap-ups. In the last few sessions it was clearly stated it go till 10750 zones around which one should book profits, keep strict stops and be hedged.

Also it seems clear after todays trade that 9900 is coming. Sensex has a gap around 9870-10110 which should get filled first. Another important gap level is placed at 9297-9361 which is the most important to watch as it coincides to around 50 % of run from 7700 to 10945 ( terming it to be an extreme short term peak). The dip could test the levels at 9900/9300 and to an extent of 8900 which is 61 % and important recent low and needs to be watched carefully.

Next action to be taken after we see base formation or reversal around the above support zones to take next trades. Technically till we sustain above the 9300 or to a larger extent 8900 a retry to 11650 + which is 50 % retracement is possible as the current counter rally could stay in place for another 3-5 weeks or say 20-40 sessions till 8900/9300 holds.

Globally all the indices have reacted sharply from oversold zones and have reached resistance levels with some exhaustion. Dow Jones touched the difficult zone of 9500-9800 and can head to 9000 levels in near term.

The list below gives the stock which have generated good returns and now the trades are closed as booking was advised around Sensex range of 10500-10750 .

Some of the stocks discussed on the blog and their bounces:
OCT 28
Reliance Inds , Reliance Infra , Hindalco , Tata Steel , LIC Housing -
Triveni Engg , HCC, Renuka
All have bounced from 20-50 % or more.
NOV 02
DLF , IDEA , Suzlon
20-50 % again
NOV 03
Pantaloon ,Adlabs , IFCI
Not that good bounces only 10-20 % .
Safe Bets :
Glenmark ( did 300 from 220-250 and long run can do 350 + ) , SBI and BOI did more then the target.
Some Short calls yesterday
Bharti Airtel around 730-738 with a stop of 753 tgt 700 -675.
BHEL around 1440-1470 stop of 1510 tgt 1380-1320.
Hindustan Unilever around 250-253 stop of 257 tgt 235.

All targets achieved in the above trades . Will now look for further trades. Apart from above 5 stocks for long term advised around Diwali day to clients - Tata Steel , Hindalco , BOI , Glenmark gave good returns whereas Rolta remains around the same price.

Also short term client trades in Suzlon , GMR infra gave 20 % + returns in 1-2 sessions.
Short calls in BHEL ( 1440 to 1380 part done rest holding ) , HDFC ( 1940 to 1850/1750 booked fully ) , Aban ( 1080 to 980-1000 part done rest holding ) . Some of hedges created at 3040-3140 in put/nifty advised maybe closed in coming sessions.

So this is a full review of the last few sessions and we can now look into the next couple of weeks for new investments /trades.

Stocks to watchout for :

With a possible gap down lot of stocks may not give shorting opportunity but buying also would be better of near to 9300 zone ideally. So its basically a no trade zone or trade in very small quantities for the day.

KOTAK Mahindra short with stop of 445 , ICICI with a stop of 468 . Both on rise for a dip of 5-8 % on downside frm current levels.

Important retracement levels :
Reliance Inds has good supports around 1220 and 1150 so can be bought closer to 1150-1170 with a stop of 1110 for a bounce back in coming days

ONGC support at 710/680 so need to wait for those or reversal signs.

Best Regards,


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