Divine blessing from Ramdevji for 2014

The year 2013 has put the foundation of next bull market in India, with most economist believe that worst is over. First half of the year is going to see the major bull run of the market. IT and Pharma will be the strongest sectors. Dark horse will be Oil and Metal sectors. Power and Infrastructure will be the weakest sectors. Banking will be weak for next two quarters, so trade Bank Nifty long only if, it is above 11000, for year target of 16000. In Nifty trade long  on every fall with stop loss of 5970 for year target of 7150.

In investing, what is comfortable is rarely profitable
WISHING YOU ALL A VERY HAPPY NEW YEAR

DLF bottom out

It is forming 5 months bottoming  Ascending Triangle and 8 weeks Head & Shoulders bottom. This week it as close above neckline of 167. Trade long with stop loss of 163 for target of 184 and 204.

Banking is Bearish

Bank Nifty and Banking stocks is forming bearish rising wedge pattern. Sell on rise with stop loss of weekly high for target of 50% from September low to recent high.

SUGAR in a sweet spot

Sugar has confirmed a major bottom in international dollar chart. In India both Renuka and Balrampur has confirmed head and Shoulders bottom. Investors can accumulate Renuka with stop loss of 15-17 for target of 38, 52 and 80. Balrampur with stop loss of 35-40 for target of  70, 95 and 150.

Charts to watch

I am becoming interested in the metal markets. The Copper, Silver and Gold charts are displaying possible Head & Shoulders bottom patterns. Although the left shoulder is awkward. However, a decisive close below this week's lows would alter the above analysis and could lead to a retest of the June lows. But my guess is the right shoulder which will be subject to considerable change before the next trend is declared. I would buy an upside breakout but would not short below the september lows.

Nifty Gaps

1) According to the gap theory Exhaustion gap is the last leg of a trend. Which is negative.
2) Nifty as penetrated the upper channel line at 5970 of descending flag or wedge. Which is positive for target of 6730.
3) It has completed 'Head' of a possible 3 months Head and Shoulders Pattern. Which has neckline at 5993. Which is negative.
Conclusion
Hold your long position till Nifty close decisively below 5970. Below 5970 one can short Nifty with the stop loss of recent high, because it  start forming right shoulder which has target of 5550-5450.

Multibagger Idea!

To interpret past patterns on the assumption that 'history tends to repeat itself' is the base of analysis of financial markets and economic factors. Metals companies like Tata Steel, Sesa Goa and Jindal Steel & Power are some of the Index stocks which are showing the same repeated chart patterns like sharp vertical rise, small top formation, sharp vertical down fall and again sharp vertical rise in parabolic trend. Prices of these stocks has reach below 2003 levels. Fundamentals of India as changed in last 10 years. So on both ground these stocks are the best multibagger investment bet for 1-2 years horizon. One can buy with the stop loss of recent lows, for the target of life highs.

Cairn India

It is forming multi years top with Head & Shoulders pattern. Now it is making right shoulder in weekly chart. In daily chart it has given breakout by closing above 314 of 15 weeks Head & Shoulders - Bottom Pattern and 5 month Ascending triangle Pattern. Trade long with stop loss of 310 for target of 349-359.

ACC

It has been making Top with 14 months Head and Shoulders - Top pattern. And breakdown of 4 years trend line support. Neckline is at 1100. Pattern will be confirmed if it gives weekly closing below 1100. Target 850.

Tata Motors

Auto Sector in general is showing sign of weakness, because it has fantastic run since 2009. The next leg of Nifty fall will be due to auto and cement sectors stocks. Tata Motors is on the verge of breakdown if  close below 275. One can short on rise with stop loss of 310-315 for target of 255 and 205.

Copper

There are three bearish patterns in Mcx- Copper.
1) 4 weeks Symmetrical Triangle. Trade short on rise with stop loss of 416 for target of 397.
2) 5 weeks Double Top, neckline at 393.
3) Completion of retracement from 455 to 366, will form double bottom near 375 to 365. 

Nifty EWT

A picture is worth a thousand words.

USD INR

It has Breakout of 4 weeks Head and Shoulders - Top Pattern by closing below neckline at 58.96. Trade Short with stop loss of 59.35 for target of 58.05 and 57.55.

L & T Bearish

It has Breakout of 14 weeks Head and Shoulders - Top Pattern, which has neckline at 900 and support line at 875. Trade Short on rise with stop loss of 901 for pattern target of 754.

Nifty

It is in the formation of right shoulder of 15 weeks Head and Shoulders - Top pattern. And 3 weeks Ascending Wedge, which is bearish pattern. Important level to watch 5970, 6070 and 6120. If Nifty close below 6000-5970 than can go to 5850, 5750 and 5550. H&S neckline is at 5548, below it 5150 is possible.

Bank Nifty

It has close below 4 weeks Flag pattern. Trade short on rise with stoploss 11200-11300 for target of 10500 and 9900.

Nickel

It is on the verge of breakout of 10 weeks Head and Shoulders - Top Pattern. Neckline is at 810. If it close below 810 on friday, one can trade short with stoploss of 828 for target of 765 and 710.

L & T

It has penetrated the neck line of 4 weeks Head and Shoulders -bottom pattern at 971 in intraday today, but has close below it. Trade long if it close above 971 with stop loss of 952 for target of 1020-1031.

Reliance

It is in the formation of 7 months Head and Shoulders Top pattern. But right shoulder is on the verge of breakout of 4 weeks Head and Shoulders Bottom and 4 weeks fail descending Triangle. Which is bullish sign. Trade long above 832 for target of 871.

USDINR Final Run

It is in the final run of the third Elliott wave (Intermediate term) in a weekly chart. And at the top end of 6 years channel lines. Weekly closing below 59.90 will confirm it's top. Fourth wave will be downward trending. Rupee may consolidate between 60 to 57 in coming months.

 In Elliott wave daily chart (short term) also it is in third wave. And at the top end of 11 months channel lines. Trade short on rise with stop loss of high (60.76 Spot) for target of 59.80, 59.10 and 58.10 in coming weeks. 

Crude Oil Bull Trap

The monthly and weekly Crude Oil charts have been forming a 9-month triangle within a 3+ year triangle. 

Of great significance, in my opinion, was the upward price breakout in last week of a smaller symmetrical triangle. This upward breakout has now proven to be a classic bull trap.

Trade Short on rise near upper boundary of smaller triangle at 96.7 with stop loss of 100.3 for target of the lower boundary of the smaller triangle at 86.70 and the lower boundary of the bigger triangle at 80.71.

Double Top in Nifty & BankNifty

It may sound too bearish but I am showing the possibilities.The text book definition of Double Top is : Two well defined peaks, narrow, pointed, and separated in time but near the same price. Breakout is downward. Nifty and BankNifty is in similar setup. Long term investment is advisable if Nifty close above 6000 in weekly chart. Double top will be confirm if  Nifty close below 4625 and BankNifty close below 7969. Months of May, Jun, July, Aug and Sep are always crucial and fundamentals are supportive.
 

SBIN

It has broken out of 7 months Head & Shoulders Top pattern 4 weeks ago by closing below neck line at 2057, but SBIN is not able to break trendline resistance, now at 1975. If it close below 1975 than go short on rise with stop loss of 2085 for pattern target of 1645. There is resistance at 12 months rectangle lower channel line at 1837, if broken by closing below it in weekly chart, than target will be 1334. 

PNB

It has breakout of 8 months Head & Shoulders, Top pattern by closing below neck line at 711 in weekly chart. Trade short on every rise with stop loss of 750 for target of 575. 

Cnx Nifty

It is making classic textbook Head and Shoulders Revers Chart Pattern at the top. Neck line breakout is at 5970. Trade short below 5945 with stop loss of 5971 for target of 5835.

Tata Motors

It has given decisive breakout above 309, of 3 months Bottom- Head and Shoulders patterns. Tata Motors has long history of achieving target of head and shoulders patterns. Trade Long with stop loss of 304 - 309 for target of 330 - 357.

USD INR

It has decisively breakout of 7 months Symmetrical Triangle Pattern below 54.14. And also below H&S failure pattern. One can trade short below 53.78 with stop loss of 54.44 for target of 53.34 and 52.

Treasury yields fall

In a new report, the analysts at Goldman Sachs wrestle with the idea that the U.S. might be in a bond bubble.

For some context, they include this great annotated chart tracking the fluctuations of the 10-year U.S. Treasury note since 1790.

Copper

It has resistance at multi months trend line level 390. Which was respected yesterday. One can trade short Copper with stop loss of 397 for target of 344. Which is also support line of multi months channel.

The Dow/Gold Ratio

After a 12-year decline against gold, the stock market could become king once more

If the ratio returns to 20, the Dow could go to 18,000 and gold could drop to $900

Sell In May And Go Away

Still As True As Ever

The S&P 500 continues to make most of its gains between November and April and underperform between May and October. Here is an updated look at this phenomenon and how you can put it to use.

From November 1979 until November 2012, the S&P 500 climbed from 101.82 to 1,412.16, a gain of 1,287.23% (Figure 1). In net points, the index gained 1,380.8 during the November–April period but lost 70.4 during the May–October period of this 22-year span.

FIGURE 1: THE RAW DATA (OCTOBER 1979–OCTOBER 2012). Here you see the S&P 500 index values and the percentage change from November–April versus May–October. From November 1979–November 2012, the S&P 500 climbed from 101.82 to 1412.16. That is a gain of 1,287.23%. Most of this gain occurred in the November–April half of each year.

LOOKING AT THE NUMBERS
Using nominal point differences can be misleading: The most recent years are given more weight since the number of points gained or lost is greater for every percentage point change in the S&P 500. Yet, even by using percentage differences, there are dramatic differences between the November–April and May–October spans.

The average November–April span saw a 7.3% change in the S&P 500 (15.1% annualized) versus 1.9% (3.9% annualized) from May–October; the November–April period outperformed the May–October period by 5.4% on average. If you invested $10,000 on November 1, 1979 and moved to cash on April 30 each year, it would have grown to $89,361, ignoring dividends, money earned in cash, commissions, and slippage. By contrast, the same $10,000 invested on May 1, 1980 and moved to cash every Halloween would have grown to $15,520. The November–April investor would have gained 475.8% more.

Flags flying

There is a fair chance that half-mast flags are forming in Gold and Silver. At this point, the price action fits the definition perfectly.

If these pauses in the Gold and Silver debacle prove to be flags, the targets would be $18.27 for Silver and $1,139 for Gold

ONGC

Massive decline

All Charts in $

ONGC