GROWTH SLOWS

Dalal Street was in celebration mode. The lower than expected inflation figure, which at 12.40% is lower than last week’s 12.63%, announced yesterday late evening, set the moods. Then there was also news of crude prices falling. It was at $116.88 per barrel after dropping $2.56 dollars. This called for double celebration! And since morning, the markets have been up over 300 points and sentiments continue to remain perked up.



And in all this jubilation, what added more fizz was the better-then-expected GDP figures for the first quarter ended 30th June 2008 for the current fiscal. Though the GDP, for the first time in 9 quarters fell below the 8% mark, the markets celebrated this too! Mind you, this is actually a slowdown and in other circumstances, if the market had yet to “discount” these figures, then the fall which would have actually happened would have been a crash.



India's Gross Domestic Product (GDP) growth for the April-June 2008 period had slowed down to 7.9% as against 9.2% over the corresponding quarter of the previous year and is lower than the sequential growth of 8.8% in Q4FY08. Clearly higher inflation and higher interest rates are now leaving a telling effect.



Construction growth slowed to 11.4% from 12.6% in the previous three months but on a YoY, it has grown from 7.7%. The key indicators of construction sector, namely, cement and finished steel registered growth rates of 5.8 per cent and 4.5 per cent, respectively, during Q1 of 2008-09, as against the growth rates of 7.2 per cent and 5.4 per cent, respectively, in Q1 of 2007-08.

While the manufacturing sector growth was at 5.6% compared to 5.8% in the first quarter, the fall on a YoY was much sharper where the growth was 10.9%. This growth rate has been affected mainly on account of companies putting off further expansions and growth due to mounting costs and higher interest rates.

Growth in electricity, gas & water supply YoY fell from 7.9% to 2.6%; trade, hotels, transport & communication fell from 13.1% to 11.2%. Financing, insurance, real estate and bus services fell from 12.6% to 9.3%. The sector which showed a growth, apart from construction, was mining which grew from 1.7% to 4.8%.



What is indeed a matter of concern is the continuous fall in agriculture, forestry & fishing, which YoY slipped from 4.4% to 3%. The production of crops rice, wheat, coarse cereals and pulses during the Rabi season (which ended in June, 2008) of 2007-08 recorded growth rates of 3.3 per cent, 3.4 per cent, 8.6 per cent, and (-) 7.9 per cent, respectively over the production in the corresponding season of previous agriculture year. Among the commercial crops, the production of oilseeds declined by 12.6 per cent during the rabi season of 2007-08, while the production of cotton and sugarcane recorded growth rates of 14.0 per cent and (-) 4.2 per cent, respectively during the agriculture year 2007-08.



This does not bode too well for India as the fall in farm products would have a direct repercussion on the price of commodities which could again lead to a flare up in inflation. According to the met department, the June-September monsoon, which accounts for four-fifths of the nation's annual rainfall, was 39% below average in the week ended Aug. 27. Plus the floods in Bihar, this has also affected agricultural production. Unless efforts are made to step up agricultural growth, inflation cannot be reigned in only through external factors like hiking interest rates and curbing spending.



The market has, for now, or for today, discounted all these news and is looking ahead with more resurgence. But it’s all a question of sentiments. In the coming days, inflation rate and crude price would continue to dominate. For now, markets are up, so things are good. Live for the moment is probably what the market is teaching us!

Reliance Chart Looks ready to run tommorow

Tommorows Call

Try to trade in INdex Heavy weights

BHEL and Reliance can show very good Bounce backs

Reliance Keep a Sl of 2052 and can go Long for a tgt of 2100 and 2138

BHEL keep sl of 1596 and go long for a tgt of 1686 1701 1750

Reliance is coming in Over sold zone Refer to chart

Nifty In Down Channel

Nifty is in Down Channel.Both MACD and RSI showing sign of weakness

If 4150 is breached than we can see fresh lows coming in.

So we should use every rise which I think will see tomorrow to exit.

Or keep a SL of 4150-4128 range on all ur longs

Calls Achived tgt

BHEL busted

SbI made 1389 recommded at 1356

LT made 2253

Kotak 609

Buying Excepted Once it crosses 409

Gujrat NRE selling excepted once start trading below 101

As seen from chart Guj Nre greeting support 101 constantly.Once start trading below 101 go short on this counter

Trading Calls for 26 August

Nifty likely to open gap up

Resistance comes around 4376 as excellent recovery seen today

SBI should range between Rs.1,352 and Rs.1,399. Buy at the lower end of the band with a stop of Rs.1,343 and opens high and sell around Rs.1,402 with a stop of Rs.1,408/1,418.

BHEL looks an excellent buy around 1721 buy for a tgt of 1741 (Broken Lies resistance)than 1782

LT has broken out of 2606 range except buying in this counter.

Kotak Bank (Chart updated in previous post) Tgt is 613 Sl 579



As i was typing this post Nifty Futures at SGX up by 37 points Voila!!!

Kotak bank looking bullish

20 DMA BREAKOUT!!!
The stock future recovered nicely from days low and closed with a gain of
3.98% on Tuesday’s session. The stock has also given close above its 20
DMA with good amount of volumes. Leading Indicator RSI (Relative
Strength Index) is rising with positive divergence and is sustaining above
the benchmark level of 50. Considering the technical evidences discussed
above, we recommend buying the stock future for position trading at
current market price for the target of 613, keeping a stoploss of 579.

GHCL Call given at 85 made 95 today

SBin Hit tgt1 1395

Axis tgt achived call closed

Infy call not intiated

Sell Orchid Chemicals if it breaks 246

Buy BHEL around 1655

SBIN Short Covering can see Higher levels

SBIN Looks Bullish in coming 2-3 days.It has Got support around 1309 and now it faces resistance around 1367 after than next resistance comes at 1395-1400 and than 1435

SO its better to go long on SBI with a Tgt of 1395- 1435 levels.

Keep trailing the SL

"Zurich Axioms" :12 rules that can save you further losses.

First Major Axiom: On Risk
“Worry is not a sickness but sign of health. If you are not worried, you are not risking enough".


Adventure is what makes life worth living. Every occupation has its aches and pains. The rich have to worry about their wealth. But, if there is a choice between remaining poor and worry-free, the selection is obvious. It is better to be wealthy and worried than to be worry-free and poor.

Minor Axiom I:
“Always play for Meaningful Stakes.”
If you invest Rs. 1000 and your investment doubles, you have only Rs. 2000 and are still poor! So if you want to be rich, you must increase your stakes.

Minor Axiom II:
“Resist the allure of diversification”.
Firstly, diversification negates the earlier principle of playing for meaningful stakes. Secondly, it may keep you where you began so that your gains on few will cancel out the losses on the other few. Thirdly, it entails keeping track of many more items leading to confusion and occasional panic.




Second Major Axiom: On Greed
“Always take your profit too soon.”

Lay investors having made the investment tend to stay too long on it out of greed for higher profits. But, one must conquer this weakness and book profits soon. If one is less greedy for more profits one will take in more. Don't stretch your luck. In effect, it suggests, SELL sooner than later.

Minor Axiom III:
"Decide in advance what gain you want from the venture, and when you get it, get out. Decide where the finish line is before you start the race".


Third Axiom: On Hope

“When the ship starts to sink, don't pray, jump
”This axiom is about what to do when things go wrong. Learn how to accept a loss. One should accept small losses to protect oneself from big ones. When the market starts falling, sell, take your money and run! and go short to cover your losses.

Minor Axiom IV:
"Accept small losses cheerfully as a fact of life."
Expect to experience several smaller losses while awaiting a large gain.

Fourth Axiom: On Forecasts
"Human behavior cannot be predicted. Distrust anyone who claims to know the future, however dimly."
The story of a monkey throwing darts on the stock exchange page of a newspaper, to select the companies to buy, and coming out a winner is too well known to be recited. Recent news from London, further proves the truth, when an untrained chemist's stock selections, in a widely publicised contest open to all and sundry, registered higher appreciation over several full time highly qualified fund managers' well researched selections. Human events cannot be predicted by any method by anyone and, hence, don't trust anybody's predictions.

Fifth Axiom:"Chaos is not dangerous until it begins to look orderly."
The truth is that the world of money is a world of patternless disorder and utter chaos. This axiom is a commentary on Technical Analysis - a branch of investment strategies based on charts and patterns. The fact is, no formula that ignores own intuition's dominant role can ever be trusted.

Minor Axiom V:

"Beware the Historian's Trap".
This is based on the age old but entirely unwarranted belief that history repeats itself.

Minor Axiom VI:

"Beware the Chartist's Illusion".
Life is never a straight line. Let us not be hypnotised by a line on a chart. Minor Axiom VII:
"Beware the Co-relation and Causality Delusions."
Don't be taken in by coincidences in the market.

Minor Axiom VIII:

"Beware the Gambler's Fallacy."
There is a gambling theory which suggests that one should put small stakes initially and test their luck, and if these turn out well one should go for big stakes on the dice table. But this is not correct. It only shows that winning streaks happen. But nothing is orderly about it. You can't know how long it will last or when it will strike.

Sixth Axiom: On Mobility

"Stay away from putting down roots. They impede motion".
You may feel socially comforting to have roots. But in financial life, roots can cost a lot of money. Have a flexible approach while investing. This axiom implies a state of mind. Minor Axiom IX:
"Do not become trapped in a souring venture because of sentiments like loyalty and nostalgia."
Do not develop emotional attachment to your investment. You should feel free to sell when desired.

Minor Axiom X:
"Never hesitate to abandon a venture if something more attractive comes into view."
Never get attached to things, but only to people. Otherwise it hits your mobility. Never get rooted in an investment. You should remain footloose, ready to jump away from trouble or into a profitable opportunity as and when circumstances demand.

Seventh Axiom: On Intuition
'A hunch can be trusted if it can be explained.'

A good hunch is something that you know but you don't know how to recognise it. When a hunch hits you, try to locate some data in your mind for any familiarity. Then only should you act on it.

Minor Axiom XI:
'Never confuse a hunch with a hope'.
Be highly skeptical. Examine every hunch with extra care.

Eight Axiom: On Religion and The Occult
'It is unlikely that god's plan for the universe includes making you rich'.
You can't only pray that you should be made rich. You will have to work at becoming rich. Mere prayers will not suffice.
Minor Axiom XII:
'If Astrology worked, all astrologers would be rich.'
Don't trust predictions.

Minor Axiom XIII:
'As superstition need not be exorcised, it can be enjoyed provided it is kept in its place.'
In your day-to-day financial matters, act rationally. But, when buying a lottery ticket, give it a full play to amuse yourself.

Ninth Axiom: On Optimism and Pessimism

'Optimism means expecting the best, but confidence means knowing how you will handle the worst. Never make a move if you are merely optimistic.'
In poker and a lot of other speculative worlds, things are never as bad as they seem - most of the times they are WORSE. Confidence comes not from expecting the best but from knowing how you will handle the worst. Optimism can be treacherous because it makes you feel good.

Tenth Axiom: On Consensus
'Disregard the majority opinion. It is probably wrong'.
It is likely that the Truth has been found out by a few rather than by many. Minor Axiom XIV:
'Never follow speculative fads. Often, the best time to buy something is when nobody else wants it.'This is the best way to get a good stock cheaply.

Eleventh Axiom: On Stubbornness
'If it doesn't pay off the first time, forget it'.
If at first you don't succeed, try and try again and you will succeed in the end. This is good advice for spiders and kings but not for ordinary persons with regard to financial matters. Every trial is a costly error.

Minor Axiom XV:
'Never try to save a bad investment by averaging down.'
If the price of the stock goes down after your purchase don't buy more to bring down' the average cost of your total holding. Investigate why the price went down rather than put good money in a bad bargain.

Twelfth Axiom: On Planning
'Long-range plans engender the dangerous belief that the future is under control. It is important never to take your own long-range plans, or other people's seriously.'

Minor Axiom XVI:
'Shun long-term investments.'
If possible try to stay away fro long-term investments. The author noticed that the Swiss group never took a long-term view of their stock purchases. They always sold out as soon as their targeted profit was achieved.

Trading Calls For 25-29 August

Nifty Views updated in Charts given below

Trading Calls

Buy SBIN above 1367 Tgt1 1391 and Tgt 2 1420 SL 1330

Buy Axis Bank above 685 Tgt1 696 Tgt2 795 SL648

Buy TATA Steel above 591 Tgt1 601 Tgt2 619 Sl581

Sell Infosys at 1741 Tgt1 1700 Tgt2 1680

Buy RNRL above 98 TGt1 100 Tgt2 103

Keep a Default SL of 2% and Keep trailing SL.

Escort Buy if it breaks 87

Buying is excepted in Escort once it Breaks 87 where its facing resistance.

Keep a Sl 0f 81 for buying done above 87

Nifty weekly Chart for 25-29 August

WEEK GONE BY
_____________
Support was expected & suggested(last week) at previous resistance trendline(now support trendline) around Nifty 4230, Nifty bounced from 4248 on Friday,contrary to expectations.


WEEK AHEAD
___________
Nifty has taken supports as expected, but still weakish. Nifty is strong/weak above/below 4370 for the week. Nifty very weak on close below 4200, very strong on close above 4450. Weekly Support expected at 4150, Weekly Resistance expected at 4530.

RIL – RNRL GAS DISPUTE

By SP Tulsian

Reliance Industries Ltd. (RIL) K. G. Basin gas supply dispute with Reliance Natural Resources Ltd. (RNRL) being heard by a Division Bench in Bombay High Court, took a new turn, when one of the judge on the Bench, Justice Mr. J. N. Patel, asked, why the brothers in dispute could not approach their mother Mrs. Kokilaben Ambani to settle dispute, as the dispute over gas supply between the two corporate entities is one that might affect the economy.



In reply to this, Mr. Ram Jethamalani, counsel for RNRL said, Mr. Anil Ambani was ready to meet his elder brother “any time any place” in reply to which counsel for Mukesh Ambani controlled RIL, Mr. Milind Sathe, said the request would be conveyed to his client and that he would have to revert on the matter.



In a similar effort, Justice A V Mohta, while passing its 151 page order on 15th October 07, had asked RIL and RNRL to renegotiate the gas supply pact, as earlier agreement of 12th January 2006, which is being disputed now by RNRL in the court, being prejudicial to its interest and referred as Gas Supply Master Agreement (GSMA), was against the Ambani Family Settlement. Justice Mohta gave both parties, four months to renegotiate the deal and restrained RIL to enter into gas supply deal with a third party, till the period is over. Justice Mohta, also upheld the validity of the Ambani Family Settlement, that divided the Reliance Group between both the brothers.



However, both the brothers were unable to reach on any settlement and the matter came again to Bombay High Court in the middle of February 2008, for hearing and final settlement.



In last 15 days, lawyers of both the sides have argued the matter and RIL counsel has referred the family settlement of 18th June 2005 as a “ghost agreement” which is not binding on RIL. However, RNRL counsel has relied on “Doctrine of Identification” and said that if Mukesh Ambani knows the agreement, the entire company knows about it and this principle is well recognized by the Indian Courts as well. He even said that Mukesh Ambani should be criminally prosecuted for breach of trust and forgery and RIL should be asked to fork out $ 17 billion in cash, if it fails to honour its commitment to supply gas to RNRL. He has also agreed that RNRL would not be trading in gas, if it is received from RIL, inspite of their Dadri Power Plant is not ready for operations. Trading in gas was otherwise also prohibited in the settlement.



Strangely, the stand of RNRL seems to have softened on 21st August, in Bombay High Court where they have seen taking varying and contradictory stands in the matter. Firstly, RNRL asked that they should be permitted to trade in gas for three years and after that it can be used for its own power plants. Secondly, they said, Anil Ambani is prepared to sit alone with Mukesh Ambani and with Kokilaben Ambani alongwith Industry Experts or Judiciary to settle the matter. Thirdly, they have also stated that they are prepared to share the cost of gas exploration with RIL. Fourthly, they said that they could not get ready with its plants for lack of bankable gas sales purchase agreement with RIL. Lastly, the counsel of RNRL also objected strongly to the stand of government counsel that RIL – NTPC is not having a concluded agreement and said that government is taking side of RIL, instead of PSU NTPC. This is inspite of the fact that, RNRL is supposed to get 12 mmscmd of additional gas from RIL, if RIL – NTPC contract falls.



In the recent political development, it was felt that ADAG would be having an advantage in getting various matters settled in its favour. However, failure to join with MTN by R-Com has been seen as a big defeat of ADAG and now it is said that Samajwadi Party, which was perceived to be close to ADAG is not showing much eagerness to favour ADAG by displeasing the RIL group. This has probably lead to a change in stance of RNRL in the court, inspite of the fact that single judge bench has upheld the family settlement and has also restrained RIL from entering into third party gas supply agreements.



One may also conclude that the judgement of the Ambani’s mother seems to carry more weight than the judiciary and even the judiciary has to knock the door of motherhood to get a judgement in the matter for which they are unable to decide.



With the gas production expected from K G Basin by October 08, it has become utmost essential to settle the matter in the larger interests of the country including fertiliser and power plants and millions of households those who would be using the K G Basin Gas. Even, this would bring down our dependency on imported crude and gas and would improve our self-reliance on gas production. To remind, K G Basin is capable to produce equivalent quantity of gas now being produced in the entire country, which is about 90 mmscmd.



Matter has now been adjourned to 1st September by Bombay High Court but it looks difficult that by that time, both the brothers would have been to amicably settle this dispute. Maybe, intervention of mother and miracle of spiritual guru, who had earlier helped in settling matters, may help yet again this time.



But one may say that RNRL seems to be losing its legal grip on the matter, which is now going more in favour of RIL.

Time Analysis Chart for BSE

Disclaimer:Got this chart from a Friend.

22 Rules of Trading

We give you Master Trader Dennis Gartman's 22 Rules of Trading, many of which you can apply to all sorts of life situations, as well as the markets.

1. Never, under any circumstance add to a losing position.... ever! Nothing more need be said; to do otherwise will eventually and absolutely lead to ruin!

2. Trade like a mercenary guerrilla. We must fight on the winning side and be willing to change sides readily when one side has gained the upper hand.

3. Capital comes in two varieties: Mental and that which is in your pocket or account. Of the two types of capital, the mental is the more important and expensive of the two. Holding to losing positions costs measurable sums of actual capital, but it costs immeasurable sums of mental capital.

4. The objective is not to buy low and sell high, but to buy high and to sell higher. We can never know what price is "low." Nor can we know what price is "high." Always remember that sugar once fell from $1.25/lb to 2 cent/lb and seemed "cheap" many times along the way.

5. In bull markets we can only be long or neutral, and in bear markets we can only be short or neutral. That may seem self-evident; it is not, and it is a lesson learned too late by far too many.

6. "Markets can remain illogical longer than you or I can remain solvent," according to our good friend, Dr. A. Gary Shilling. Illogic often reigns and markets are enormously inefficient despite what the academics believe.

7. Sell markets that show the greatest weakness, and buy those that show the greatest strength. Metaphorically, when bearish, throw your rocks into the wettest paper sack, for they break most readily. In bull markets, we need to ride upon the strongest winds... they shall carry us higher than shall lesser ones.

8. Try to trade the first day of a gap, for gaps usually indicate violent new action. We have come to respect "gaps" in our nearly thirty years of watching markets; when they happen (especially in stocks) they are usually very important.

9. Trading runs in cycles: some good; most bad. Trade large and aggressively when trading well; trade small and modestly when trading poorly. In "good times," even errors are profitable; in "bad times" even the most well researched trades go awry. This is the nature of trading; accept it.

10. To trade successfully, think like a fundamentalist; trade like a technician. It is imperative that we understand the fundamentals driving a trade, but also that we understand the market's technicals. When we do, then, and only then, can we or should we, trade.

11. Respect "outside reversals" after extended bull or bear runs. Reversal days on the charts signal the final exhaustion of the bullish or bearish forces that drove the market previously. Respect them, and respect even more "weekly" and "monthly," reversals.

12. Keep your technical systems simple. Complicated systems breed confusion; simplicity breeds elegance.

13. Respect and embrace the very normal 50-62% retracements that take prices back to major trends. If a trade is missed, wait patiently for the market to retrace. Far more often than not, retracements happen... just as we are about to give up hope that they shall not.

14. An understanding of mass psychology is often more important than an understanding of economics. Markets are driven by human beings making human errors and also making super-human insights.

15. Establish initial positions on strength in bull markets and on weakness in bear markets. The first "addition" should also be added on strength as the market shows the trend to be working. Henceforth, subsequent additions are to be added on retracements.

16. Bear markets are more violent than are bull markets and so also are their retracements.

17. Be patient with winning trades; be enormously impatient with losing trades. Remember it is quite possible to make large sums trading/investing if we are "right" only 30% of the time, as long as our losses are small and our profits are large.

18. The market is the sum total of the wisdom ... and the ignorance...of all of those who deal in it; and we dare not argue with the market's wisdom. If we learn nothing more than this we've learned much indeed.

19. Do more of that which is working and less of that which is not: If a market is strong, buy more; if a market is weak, sell more. New highs are to be bought; new lows sold.

20. The hard trade is the right trade: If it is easy to sell, don't; and if it is easy to buy, don't. Do the trade that is hard to do and that which the crowd finds objectionable.

21. There is never one cockroach! This is the "winning" new rule submitted by our friend, Tom Powell.

22. All rules are meant to be broken: The trick is knowing when... and how infrequently this rule may be invoked!

Sell Axis bank if it break 668

Axis Bank getting Support at 668 Once it breaks 668 except selling

No arbitage oppurtunity in Ranbaxy at 500

The present outstanding shares of RLL are 37,32,37,870 shares while open offer is for 9,25,19,126 shares, which implies offer for 24.79% of present equity. Though the mandatory open offer is for 20% equity of RLL, which is calculated after including outstanding ESOP of 83,88,353 shares, preferential allotment to Daiichi of 4,62,58,063 shares and 3,47,11,343 shares underlying possible conversion of zero coupon foreign currency convertible bonds.



Of the present equity of 37.32 crore shares, Daiichi is acquiring 12.99 crore shares, from promoters of RLL, being 34.81% of the present equity. This means, 9.25 crores shares would get acquired out of remaining 24.33 crore shares, which would result in an acceptance ratio of 38%. As some of the shareholders may not be able to participate in the offer, the acceptance ratio for all practical purposes can estimated to be 40%.



Share is now ruling at Rs.500. If somebody buys 100 shares today, it would cost him Rs.50,000. If 40 shares are expected to get accepted at Rs.737, it would realize Rs.29,480, leaving residual cost of 60 shares at Rs.20,520 or Rs.342 per share.



If we add tax on estimated gain of Rs.9,480 (Rs.237 x 40 shares) at Rs.2,800, the residual cost of 60 shares would be at Rs.390 per share. Share of RLL, post open offer, is likely to rule at around Rs.360 per share. For September F&O, the share is ruling at Rs.362 per share.



So under the given circumstances, there does not exist any arbitrage play and hence it is not advised to buy from the secondary market now at Rs.500 per share and participate in open offer.

BATA INDIA BUY SIGNAL GENERATED BY DONCHAIN CHANNEL

DONCHAIN CHANNEL MORE ON THIS TECHNICAL INDICATOR WILL BE PUBLISHED IN COMING POSTS

BUY SIGNAL IS GENERATED FOR BATA INDIA

BUY BATA INDIA ABOVE 179 FOR A TGT OF 183 AND 186.50 SL 176

SEL Manufacturing updated charts

SEL Manufacturing bounced from its support at 265 levels today and closed at 310 levels

According to RSI stock is in Oversold position and partial entry can be taken care in the range of 250-265 levels only for long term with a room for averaging around 200 odd levels which is very rare chance.

Now one can not except very quick gains in days to come and stock should go in for a consolidation phase. After which the raaly can resume.

LITL CHARTS

LITL is in a down trend has broken the Triangle breakdown.

It's Unable to move above its 50 EMA of 350 where its facing strong resistance.
If market are positive in coming days accept a bounce from 285 levels in today or tomorrow trade

Good Buying oppurtunity emerges at 235 odd levels.But for trading perspective and if market tend is positive bounce can be excepted around 285 levels.

Suzlon Energy chart

Buy exccepted in Suzlon Energy once it crosses 246.

Triangle breakout on cards.Buy only above 246

Trend line Broken for SEL Which it was respecting for almost 1 year.

The fall has been huge and backed by volumes.

This stock is now in serious Bear grip.

GHCL Charts updated.

A close look at chart indicates Buying is excepted if stock starts trading above 84.50

Punj Lloyd chart

Buying excepted if it trade above 306 for a tgt of 309 and 317 sl293

IIP SHOWS CLEAR SIGNS OF A SLOWDOWN

Economic growth Index of Industrial Production for June 2008 fell to 5.4% as against 8.9% in June 2007. But month-on-month, the growth has bettered from 4.1% recorded in May 2008.Manufacturing sector was the main gravitational pull, the main culprit pulling down the IIP growth. Manufacturing which accounts for two-thirds of the IIP fell down dramatically from 11.1% in June 2007 to 5.9% in June 2008.
Growth of capital goods sector also was down. From double digits in 2007, it has slipped into a single digit now. The growth rate for June 2008 was at 5.6% compared to whopping 23% in June 2007. For the entire quarter, April-June 2008, the growth was a little over 6% but this is a paltry figure when compared to the average growth of 20% in Q1FY08.Growth in six core infrastructure industries slowed down to 3.4% in June as against 5.2% in the year-ago period. During the April-June quarter of the current fiscal, the growth rate of the six core industries - crude oil, petroleum refinery products, cement, finished steel, coal and electricity – fell 3.5% as against 6.4% in Q1FY08. Not surprisingly, coal was the only sector which posted a growth of 6.2% against 0.9% in Q1 is previous fiscal. Crude oil production registered a negative growth of 4.7%, petroleum refinery products fell to 5.6%, cement declined to 3.8%, finished steel production also slowed down to 4.4%.The other “infrastructure” sector was electricity, which fell from 6.8% in June 2007 to 2.6% in June 2008 and this, for the entire of Q1 was at 2%. The mining sector can be called a mixed bag as it grew YoY and fell sequentially. Mining growth in June 2008 was at 2.9% as against 1.5% in June 2007 and 5.2% in May 2008. The YoY growth is slower than the fall in the sequential growth.So when all the sectors were down, what helped the IIP grow at all? The consumer goods sector. This sector gathered momentum in June registering a growth of 3.5% against a negative growth of 3.6% in June 2007, pushing up the overall consumer sector growth to 10%. After all this number crunching, what is the emerging writing on the wall? Undoubtedly, the growth rates are showing signs of a slowdown. The growth in the consumer goods sector comes as a surprise as usually, it is the first quarter which usually shows a fall in demand. But this unexpected demand surge could be due to the impending interest rate hike. All knew that RBI, in its credit policy in June would announce a rate hike and interest rates were bound to go up. So, to take advantage of this situation, rushing to buy before the rate hikes, helped shore up the consumer goods figures.
Interest rates were hiked on 29th June, so the effect of this would be seen only in Q2. SBI today announced a 1% rate hike in its prime lending rate (PLR), which now stands revised at 13.75%. Others will follow suit and this is sure to cut down the demand, notwithstanding the ‘Big Sale’ announced by Big Baazar, Subhiksha, More and the rest!If the growth rates have to improve, it is then imperative that oil price continues to cool off. Crude is currently at $113 despite the onging tensions in Georgia. And no one knows why the prices are slipping now and when it is the unknown, it is indeed worrisome. The trend of the oil prices would decide where our economy would head in the months to come. It would be too early to say that we have seen the bottom of the growth rates in May 2008 and now things will only look up. The slowdown in infrastructure sectors is most worrisome.The auto sector has shown a dip in sales for the first time in three years. When the auto sector cuts down production or when demand slows down, all the other industries which are indirectly dependent on the auto sector would also slowdown.The markets have been trading in the positive zone and again, this is directly related to falling crude prices and the positive global sentiments. But how long this would last? No one knows.

Nifty medium term Elliott-wave-theory View

Nifty have formed Zig zag pattern on weekly charts

This pattern started at the end of bull cycle making top at 6357 on jan 08 after completing 1st downwave at 4448 , the retracement wave was completed on 02 may at 5299 . The next major wave started from 5299 larger than jan fall till 3790 in month of july , Now we are in the retracement wave which has target of 4722 the 61.8 % retracement level as mentioned in my earlier posts also

Now according to this pattern ( elliott wave theory ) , the up rally is about to end .......yes this rally can be stretched to 4850 -4927 lvl by formation of extended waves which is quite possible , but the downwave sfter ending of this wave would more larger than last wave , which can possibly take nifty to 3300 or 3157 which is can be called as 50 % correction according to 8 year cycle n then lead to 62.5 % correction lvl at 3000 mark , where the correction may be completed according to theory.

Update on Calls Given

India Cement call not initiated.If people have shorted that should have made good money.Day's High was 165.50 just rs 1 below the call and end result closed at 156.5.

Guys go short if the call is not initiated on Buy side.

Rel infra was down 0.5% only closed at 1095. Keep on booking profits

4300 and 4400 puts must be in profits as stated in last call

WWIL closed at 26.10 can still rock

Uptil 4300 be a buyer in dips.

India Cement Bullish charts

Buying excepted once it breaks/Trades above 166.50

Also Keep an eye on Hindalco charts attached in previous posts Lot of accumulation going in this.once it breaks /trades above 146 it can show 160 in short term.

Reliance capital tgt 1650

Reliance capital for medium term Once it closes above 1470 can lead to a targets of Target1 1495 Target 2 1530 Target 3 1650 Stop loss 1,222.12 for medium term

For a day trader go long above 1468 for a tgt of 1495 and 1515 by keeping a stop loss of 1401

Trend line in RSI is not broken getting support at it as shown in chart.

Reliance infrastructure made ahigh of 1112

Move sl to 1075 and trail

WWIL call still active

Chambal can rock anytime

Please maintain strict SL as market is bound to get volatile tomorrow before and after volatile session.

Hedge yourself with 4300 ,4400 put just for insurance.

UREA PRICING POLICY - STEP IN THE RIGHT DIRECTION

A nice article By SP Tulsian



To enable the companies to increase the indigenous production of Urea, the Government on Friday announced new Import Parity Price (IPP) linked subsidy policy for production of additional urea by the domestic manufacturers, over and above their current rated capacities.



In the past, existing fertilizer companies were not allowed to exceed its rated capacity, and if they would have done it, would not have got any subsidy reimbursement from the government. Due to this policy, in last four year, production of Urea and DAP grew by just 0.56% to 24.07 million tonnes in 07 – 08. India, the world’s second largest consumer of fertilizer has seen an import of 10 million tonnes, a quarter of the total demand in 07 – 08. This gap between Demand and Supply is likely to cross to 19 million tonnes by end of 11th Five Year Plan (2007 – 12).



The new policy, approved by the Cabinet Committee on Economic Affairs (CCEA) has set floor and ceiling prices for urea, linked with the IPP and subsidy payable to the producers will be calculated based on these two prices. Floor price has been fixed at $ 250/tonne and the ceiling is fixed at $ 425/tonne. This means, if production cost of a company is less than $ 250 a tonne, their compensation would still be calculated on the basis of the floor price and would stand to gain. Conversely, if the cost of production is more than $ 425 a tonne, compensation would exclude cost above this ceiling. If production cost remains within this range, the subsidy would be calculated based on the actual cost.



For additional Urea produced through revamp of existing units, the subsidy would be 85 per cent of the IPP.



Urea produced through brownfield expansions at existing locations would attract a higher subsidy rate of 90% of IPP.



Closed units on getting revived will attract 95% subsidy. This would help 8 units of Hindustan Fertiliser Corporation Ltd. and Fertiliser Corporation of India Ltd. All these recommendations are based on the recommendations of Dr. Abhijet Sen Committee.



Let us examine how far it will benefit the existing units engaged into making of Urea with feedstock being gas or naptha. It may get noted that all the existing gas based urea plants are capable to operate at 120% to 125% of rated capacity, as all of them are technically efficient and competent plants, if gas is available to them.



Presently, Urea IPP is about Rs.25,000 per MT which is equivalent to $ 600 per MT. In such a scenario, if an existing company is producing additional Urea, it will be entitled to have a price of $ 425 per MT or Rs.18,000 only. However, in case of a fertilizer plant, fixed costs constitutes about 20% of the total cost of production, and the present cost of production of a company, with gas being provided to them at administered price, works out at Rs.18,000 per MT. This translates into a cost of $ 425 per MT.



However, under the new policy, only non-APM gas will be considered for the new investment in Urea sector. Further, gas transportation charges will be paid to units undertaking expansion and revival on the basis of actuals (upto 5.2 Gcal per tonne of Urea) as decided by the Gas regulator, subject to a maximum ceiling of $ 25 per tonne of Urea.



The new investment policy is a departure from the existing policies, which are based on cost plus approach with a 12 per cent, post tax return to the manufacturers. This pricing policy, based on market parameters will encourage investments in the sector and also substantial improvement in efficiencies.



There are about 22 gas based Urea plants in the country and it has been recently decided by Empowered Group of Ministers to supply gas to all these plants to enable them to achieve full capacity utilization. Some of the prominent gas based Urea plants are Chambal Fertilisers, Indo Gulf Fertilisers (now a unit of Aditya Birla Nuvo) RCF (Thal Plant) National Fertiliser (two plants) Tata Chemicals etc.



Presently, the import price of $ 600 per MT, for Urea is in view of huge demand of India, which is likely to fall once the domestic production increases but is not likely to fall to $ 425 per MT. This means, the existing companies going in for expansion has to remain contended with a ceiling price of $ 425 per MT.



Since the cost of production would be higher for this, as gas would be available at non-APM rate, which is almost at double the rate, the companies have to work on its efficiency to keep the cost of production low.



The capital expenditure would be least for revamping including de-bottlenecking while it would be higher for brownfield expansions while time required to implement the same may range within 6 to 24 months.



This implies that companies going for revamping would be entitled for a price of $ 361 per MT (85% of $ 425 MT) while it would be at $ 382 per MT (90% of $ 425) for brownfield expansions, it would definitely be inadequate and may not be economically and commercially viable for the companies.



As stated earlier, even if we consider an element of 25% fixed costs, and the present cost which is now at $ 425 per MT and expected to rise to $ 500 per MT, in view of differential and higher rate for non-APM gas, the direct cost for the additional production would be at around $ 375 per MT (75% of $ 500 per MT) and under revamp, the companies would only be getting $ 361, thus having a loss of about $ 14 per MT. Even under brownfield expansions, realization would be at $ 382 per MT, while investment on capex would be much higher than revamping.



Hence, it is concluded that ceiling price of $ 425 per MT should have been fixed anywhere between $ 475 to $ 500 per MT to incentivise the existing companies to go for higher production to tide over shortages and to cut on imports.

Trading Calls For Coming week

Balram pur keep sl of 81 and enter can touch rs 94 posted on 31 July

Book profits on Monday Tgt already achieved.Book full on Monday.

Dish TV already rocked


Now Keep an EYE on

WWIL Buy Around 27 adn can touch 30+ in a week Stop Loss 25.50

Chambal fert buy around 81-83 Levels can touch 93 Stop Loss 79

Reliance Infrastructure Buy around 1032-1047 range TGt of 1100 and 1150 Stop Loss 990

Larsen and Tubro for a tgt 2942 and 3034 STop loss 2797

Nifty Weekly 11-14 August

Nifty has shown tremendous strength at lower levels and Stock having major weightage in Nifty Like SBIN and LT Reliance are in a mood of breakout will keep updating Charts of them


Try to reduce long position around 4700 Nifty which should be reached in the week and wait for a dip to ebter again around 4300-4200 level.

EVERONN SYSTEM (CMP: 529)

BREAKOUT FROM CONSOLIDATION!!!
The stock is looking bullish on its daily chart, as it has given close above
Short-term trend line as well as its 50 DMA with significant volumes on
Friday. Leading Indicator RSI (Relative Strength Index) is rising with
positive divergence and has reached above the benchmark level of 50.
Considering the technical evidences discussed above, we recommend
buying the stock for position trading at current market price for the target
of 575, keeping a stoploss of 510

BSE 30 Index View

Above 16000 major turnaround.

Nifty coming out of a Converging triangle

A can be seen from the Chart Nifty is coming out of a converging triangle and Nifty closing in green after every fall means now it is a market of Buying at dips.

Now as Dow is closing at 300+ so except a gap up opening on monday and getting past the resistance level of 5600 and now next resistance come at 4800 levels where lies tha 150 DMA.But if crude supports and Global market bear rally that can be crossed and Final target comes around around 5k-5.1k.

Be wise; invest in SIPs:

Any investment decision depends on the risk profile and the goals of the investors. But overall SIPs have been a very prudent way of systematic investment. That way one can choose any of the largecaps. I still strongly believe in the largecaps going forward also. So one can choose funds like Kotak 30, DSP ML Top 100, Sundaram or may be Franklin Blue-chip.

Instead of timing the market what is more important is �time in the market� and specially when an investor chooses SIP, I assume that the investor would be looking for a longer timeframe for the continuous and systematic investment. It is good idea. SIP can be a good idea at any point of time because the SIP as a scheme works on rupee averaging cost and over a period of time it doesn�t matter whether one entered at 16,000 or at 12,000 or even at 18,000. Over a period time the rupee averaging cost works and the investor gets close to the CAGR of the fund.



I have been recommending the largecap at this juncture to all investors. In my largecap I have my fixed recommendations on Kotak 30, DSP ML Top 100, Sundaram Select Focus.


Investing in SIP is just like Spending on Yourself Make it as your one of the General Expenses per month just like spending on Laundary etc.In a longer term it will help you to get a lumpsome share of money.
Belive in The power of Compounding.
A Ruppee saved is Rupee Earned.

Intra day Strategy

BASIC RULE - LONG ABOVE 34EMA, SHORT BELOW 34 EMA ( BLACK LINE)

NOW TO ENTER SHORT TRADE I WILL WAIT TO CHECK WHERE DOES 3EMA(RED, GO BELOW 13EMA(GREEN)

3EMA IS ALREADY BELOW 13....(JUST TOUCHING FROM BELOW)
SO THE ONLY TRADE POSSIBLE AT 11 AM IN NIFTY IS I GO SHORT WITH SL JUST ABOVE 34EMA(BLACK) AND U SEE IT GIVES US HUGE FALL





DISCLOSURE - THIS SYSTEM IS NOT DISCOVERED BY ME, MANY EXPERIENCED TRADERS USE IT

Guys DISH tv made a high of 38 today

hope any one following the calls made some money

ACC Chart

Intresting Charts

Larsen and Turbo Forming Triple Tops

Trading calls

Buy HDIL with a Sl 500/494 tgt 544 in near term most probably Intra day

Buy HIndalco only above 146 as updated in chart

Bharat Forge

Buy Bharat Forge above 260 reasons Given in chart.

Hindalco Chart

Hindalco Chart.Hope Grasim call everybody has njoyed made 2038 once crossed 1980 as shown in chart.

" A GOAL WITHOUT A PLAN IS JUST A WISH "

Attaching Some Intresting graphs

2. The Stock gained more than 8% in Monday’s Session and closed above its
20 DMA with significant volumes. Leading Indicator RSI is rising with
positive divergence and has also reached above the benchmark level of 50.
Momentum Oscillator DMI (Directional Movement Index) has given the
bullish breakout, as +DI has crossed –DI and ADX line upside on daily
charts. Considering the technical evidences mentioned above, we
recommend buying the stock for position trading at current market price
(32.40) for the target of 36.10, keeping a stoploss of 31.