Nifty View - DENIP Consultants - Dewang K Mehta

Dear All,

At the risk of sounding cocky, we are going to come out and say that we told you so. A lot of people got worried when we opened almost 3% lower this morning, some even started shorting the market. However if you would have followed our advise (http://denipconsultants.blogspot.com/2011/08/nifty-view-denip-consultants-dewang-k.html)  you would’ve been a buyer and not a seller this Monday morning.

Hope none of the people associated with us or reading this email or reading our blog went short in the market. We however strongly believe that the rally that comes in next will be a relief rally and that people should look for opportunities to sell the rally. Please be patient and opportunities will come knocking. (http://denipconsultants.blogspot.com/2011/08/what-do-you-do-with-your-sip.html)

Godrej industries had fallen down to 205 and we hope that some of you bought the stock as per the levels mentioned by us this past week (http://denipconsultants.blogspot.com/2011/07/godrej-industries-6month-buy-dewang-k_30.html).

Thanks,

Dewang K Mehta

DENIP Consultants

Nifty View - DENIP Consultants - Dewang K Mehta

Dear All,

The charts of the S&P CNX Nifty show that we have broken down from a descending triangle pattern with a gap down which usually is considered to be a strong down move. If a target has to be set then the first target for this fall would be 10% lower from the breakdown point which comes to 4815 - 4825 considering that the break down happened from 5361 levels.

We however believe that since we have had a 5% fall this week, we will spend the coming week consolidating and then the week after in a pullback mode. Ideally we believe that the pullback till 5360 / 5350 should not be ruled out in the coming 2 weeks. However the 5350 / 60 would be a good level to short again and this time around expect a fall till 4800 levels.

According to us large cap stocks such as M&M, TCS, SBI etc. of the world would be strong candidates for a buy since they would lead the pullback.

Our Previous Post: http://denipconsultants.blogspot.com/2011/07/s-cnx-nifty-still-bearish-dewang-k.html

Thanks,

Dewang K Mehta

DENIP Consultants

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Core Projects & Technologies - Dewang K Mehta

Dear All,

Another stock which catches our attention is Core Projects and Technologies. This stock has been creating a rising/ascending triangle formation since 2009 which is denoted by the black lines. Although the break out from this pattern is yet to occur, if you look at the black highlights which are clearly the support zones for this stock, it would be prudent to buy this stock at the current 299 level.

Buy in small parts around the 299  - 275 level for a target of 317/330 over the next 6 months. I think that this stock has been creating a decent formation technically and if someone has a one year to two year time horizon this stock could possibly break out and reach very high targets.

I would like to buy it in parts right now for targets closer to 317. The potential breakout for this chart would happen above 350 levels but no harm in tracing it from now; could be one of the dark horses over the coming years.

Thanks,

Dewang K Mehta

DENIP Consultants

Disclaimer Post Applies

Godrej Industries - 6Month Buy - Dewang K Mehta

Dear All,

In our previous post on Godrej Industries (http://denipconsultants.blogspot.com/2011/07/godrej-industries-6month-buy-dewang-k.html), we asked fellow investors to book out profits in Godrej industries on the 7^th of July 2011 around 222 levels. We advise you’ll to re-enter this stock below 207 levels for a test of 231 levels again. We also believe that the target of 250 is still intact.

If we are to consider yesterday’s close of 211, we have saved at least 11Rs or close to 5% in this month alone. I would ideally want to buy it around the 205 levels but I am not too sure if it will fall to those levels. Below 210 is a good entry for this stock but patience is a must.

Thanks,

Dewang K Mehta

DENIP Consultants 

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S&P CNX Nifty - Still Bearish - Dewang K Mehta

Dear All,

This week the S&P CNX Nifty closed at 5482 which according to the charts is a very crucial level for it. A close below 5480 will definitely see us testing the 5200ish zone on the Nifty which takes it lower by at least another 3%.

What we have done is to go back to the basics of technical analysis which talks about supports and resistances. We have highlighted the resistances in red color from where the Nifty has fallen every time and the supports in black which are the zones where Nifty witnesses buying and bounces back.

So according to our reading of the charts we are very crucially poised and if you play by the book then it’s prudent to buy the Nifty at 5480+ levels and keep a stop loss of 5446 both being spot figures. However for traders who love going short we would advocate a weekly close below 5450 to go ahead and short the Nifty.

We began July with the Nifty at 5700+ when we had emailed and blogged about being cautiously bearish and we still continue to hold a bearish view on the market. However we are not ruling out a ultra quick up move to 5650 if buying does come in.

Our previous posts on the Nifty:

1. April 2011 - http://denipconsultants.blogspot.com/2011/04/nifty-view-denip-consultants-dewang-k.html
2. June 2011 - http://denipconsultants.blogspot.com/2011/06/nifty-view-denip-consultants-dewang-k.html
3. July 2011 - http://denipconsultants.blogspot.com/2011/07/s-cnx-nifty-cautiously-bearish-dewang-k.html

Clearly the above posts show how we have been bearish on the Nifty since 5900 and continue to maintain our view.

Thanks,

Dewang K Mehta

DENIP Consultants

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Nifty View - DENIP Consultants - Dewang K Mehta

 Dear All,

Attached herewith are 2 charts for the Nifty which clearly show that the Nifty is on the verge of breaking a major long term channel which was started in 2009. Although we did try to break this channel on the upside we seem to have re-entered this channel since Jan 2011.

We have taken support 3 times on the bottom end of this channel and we are again at the same level. We have been overbought every time the Nifty has tested this channel and this time too is no different. However judging the FII selling and global queues, I believe that we might break this channel on the downside. If 5340 is broken on Monday or in the coming few days, we might witness some major momentum on the selling side.

I would advise everyone to avoid trading the Nifty right now and if you would have gone short on the 5900 levels as per our last advise then book part profits at current level of 5366. 9% profit made in 2 months on the Nifty.

Thanks,

Dewang K Mehta

DENIP Consultants Pvt. Ltd.
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