Market Analysis With Megh Mody

Nifty started gaining momentum especially after making a low of 5985 and moved up till 6723 levels in a span of one and half month and made a record high. This up move is very much similar to the move which occurred from December 2011 till February 2012 (marked by blue rectangle) where the index gained tremendously in spite of RSI staying in over bought zone for many weeks. This scenario is similar for the current rally as well, but how long this up move will sustain? Even with the help of simple technical analysis like channels, retracements etc and use of candlestick patterns, traders can easily understand resistance and reversal signals. Channels are two parallel lines which helps to know the support and resistance levels. From past 3 years Nifty is moving in a channelized formation. The formation is positive as it is making a higher high and higher lows, but on 31 st March 2014 prices faced the resistance of the upper trend line of the channel and has also formed a han

Infrastructure conglomerate   Jaiprakash Associates   signed an agreement to   sell   its 74 per cent stake in a   cement  manufacturing unit in Bokaro to   Dalmia Cement   (Bharat) for a   deal  that values the entity at around Rs1,150 crore. The proceeds of the   stake sale   will help Jaiprakash Associates in its plan to cut the Rs60,000 crore debt  on its books. It wants to slash debt by Rs15,000 crore by March end. In a  disclosure  to bourses, Jaiprakash said it will sell its entire  holding  of 74 per cent in the Bokaro  unit , of which   Steel Authority of India   owns 24 per cent, at Rs69.74 per share, which translates to about Rs690 crore for the stake. "The above stake  sale  is subject to the approval of   SAIL   and such other  approvals , as may be necessary from  lenders  of Bokaro Jaypee Cement and concerned authorities," Jaiprakash Associates said. Besides the equity investment , Dalmia Cement will also take over around Rs250 crore of debt attache

Telecom is one of the underperformer sector as compared to other sectors such as Banks, realty, MNC’s etc. This means the entire telecom pack which includes Bharti Airtel, Rel Com, Idea, Tata Com has not performed in sync with Nifty. We are going to discuss on Reliance communication as this stock has failed to show any positive momentum from past 6 months. It is not acceptable for this high beta stock to underperform even when Nifty moved up almost 1300 points on the upside in last 6 months. By applying the combination of basic technical analysis and Elliott wave theory it becomes easy to forecast the upcoming trend for a particular asset class. Simple technicals like channels, retracements etc help us to know the possible support and resistance for the asset class. From the below daily chart of Reliance communication, we can see clearly that prices are moving down after making a high of 164.65 on 20 th November 2013. Thereafter it failed to move above its high and sta

In our previous article on 10 th March 2014 we had mentioned that, “Using Elliott wave analysis we came to the conclusion that this index is going to underperform in coming months which can drag this index till its previous pivot low. Failure to protect this low will further infuse selling pressure. The index is quoting above the extended upward sloping lower trendline which has been providing support to this index from October 2011. Till now this support has been intact but sooner or later it may breach this support zone. We can also observe that, prices faced the resistance near 61.8% retracement of the previous down move (24,111-21,197). Now the next support is its previous pivot low which is around 21,200 levels.”- Bulls Eye. We were very accurate in capturing the move for Hang Seng as it faced the resistance of 61.8% retracement and moved till its previous pivot low of 21200. The index made a low of 21137 and closed near the day’s low which is not a healthy sign. Now to o

Tech Mahindra, on June 25, 2013 announced the completion of   Mahindra Satyam ’s merger with itself. Post-merger, the new entity becomes the fifth largest IT Company in the country with revenues of $2.7 billion.   Combined entity has a team of 83,000 professionals, servicing 540 customers across 49 countries. It has 15 overseas offices for BPO (business process outsourcing) operations and software development. Its revenue for 2012-13 was put at $2.7 billion (Rs. 16,000 crore). Technically, it is very clear from the below daily chart that the stock is moving up by forming a higher highs and higher lows and it is moving in an upward sloping blue channel which is a healthy sign for this IT stock. On 19 th March 2014, the stock was down but it bounced lately which clearly suggests that there was a buying seen. Using Bollinger Bands has always helped to understand the range of the asset class. These are self adjusting bands and are very helpful in a range bound market. In this stoc

The   FTSE 100 Index , also called   FTSE 100 ,   FTSE , or, informally, the   "footsie"   , is a   share index   of the 100  companies   listed on the London Stock Exchange   with the highest   market capitalization . It is one of the most widely used stock indices and is seen as a gauge of business prosperity for business regulated by   UK company law . The index is maintained by the   FTSE Group , a subsidiary of the   London Stock Exchange Group . The index began on 3 January 1984 at the base level of 1000; the highest value reached to date is 6950.6, on 30 December 1999. After falling during the   financial crisis of 2007-2010   to below 3500 in March 2009, the index recovered to a peak of 6091.33 on 8 February 2011,   fell   under the 5000 mark on the morning of 23 September 2011, but reached 6865.86 at the market close on 24 February 2014 (its highest close since 1999). From the below daily chart of FTSE 100, we can see that prices are moving precisely in an u

It is believed that USDINR will not move above 63 levels and will consolidate within the range of 60-63 by many analysts, brokers and traders. What is the story behind USDINR? To know the answer we have used Elliott Wave Analysis to know the forthcoming trend. By using this advance technical theory, it has become easy to identify the patterns and its implication. From the daily chart of USDINR we can observe that, prices has been moving in a range of 60-63 from past 5 months which has been very difficult for traders to trade in currency pair as it was moving in a triangle pattern. Triangle pattern occurs in selected waves and cannot be plotted anywhere as per the guidance of R.N Elliott. In a triangle pattern there are 5 legs (a-b-c-d-e) each comprising of 3 (a-b-c) which is a form of corrective pattern. It seems that prices have completed the last leg of triangle pattern and it is now ready to move up. The target for this pattern comes to around 67 levels. In shor