SAIL FUTURE WEEKLY CHART

SAIL FUTURE WEEKLY CHART

With markets not only at home but also overseas turning bullish, one should look for buying opportunites. In my view, Nifty Future can - over the next couple of weeks go up to 5600-5700.

With this backdrop, I find SAIL weekly chart given above, gives a safe opportunity for investor/trader.

In the attached chart, you will find that Sail has been consolidatting for the past 19 weeks and is now ready for a breakout from a triangle pattern. The breakout happens at 94 (last weeks' High 92) and gives an eventual target of 141 as shown in the chart. Though the breakout from triangle is at 94, it will gather momentum above 100 (previous High) and face hurdles on the way up at 110 - 116 - 127 and major resistance at 140-145 range.

In view of the above, one can consider going long around 92 with stop loss just below 88. As we are just at the beginning of a new FNO settlement cycle, one can even consider buying Rs. 100 Call available around Rs. 0.75 to Re 1/-. With lot size of 4000 shares this will entail maximum investment/risk of Rs. 4000/- .

With Best Wishes,

Ketan Asher.

TURNING POINTS FOR WEEKENDED 01.06.2012

NIFTY FUTURE WEEKLY / NIFTY FUTURE EOD
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A weak open on Monday and further downside for Nifty Future is a foregone conclusion with our markets closing near the low of the week and furhter confirmed by weakness in US markets.

On the attached EOD chart, I have drawn Andrew's Pitchfork which indicates Median Line support at 4675 and Gap at 4656.

On the attached weekly chart, Andrew's Pitchfork indicates Medain Line support at 4700. Thus reading on both the charts does indicate that their exists good support between 4650 and 4700.

From time and price perspective, it is important to note on the Weekly chart that after bottoming out at 4538 (on 20th Dec'11), Nifty Future went up to 5700 in 8 weeks, whereas the current downside from the high of 5700 level has taken double the time (next week is the 16th week from high of 5700) - suggesting lower velocity during the fall and thus providing good reason for possible support in the 4650-4700 range.

The levels indicated above may be reached during the course of the next week and one can consider buying Nifty Future with strict stop loss of 4600.

Have a nice weekend!

Ketan Asher.

HDFC LTD. WEEKENDED 04.05.2012

HDFC WEEKLY CHART

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This stock has been trading in a narrow range of Rs. 80 for the past 13 weeks. In sync with the market weakness, this stock too has been declining and has closed weak today at 665. However, it remains inside the triangle marked on the attached chart. The downside breakout level is at 650 level.

This is one of the leading Housing Finance Co. with almost 70% of its equity held by FII's. Another noteworthy point in favor of this stock has been that the Company has converted the warrants at Rs. 600 per share and interestingly, this stock has not broken this level for the past 1 year - despite the continued weakness in the market. The Company is scheduled to declare its results/dividend on Monday, 7th May 2012.

As a contrarian trade - considering the current market weakness. one can consider buying the stock at lower levels with stop loss of Rs. 630 or Rs. 600 depending on individual risk profile. In event of good results and market turn around, this stock can see a break out on the higher side at 685 and can offer good profit potential.

Considering that this month's FNO settlement (31st May) is still far away, one can even consider buying call option with strike price of Rs. 680 or Rs. 700 which closed today at Rs. 2.65 & Rs. 6.95 respectively.

As the markets remain weak, please do not forget to keep a suitable stop loss. One can minimize the risk by buying call option as referred above.

Have a nice weekend!

Ketan Asher.

Review of Bank Nifty Future

On 2nd May, I had put up a chart on Bank Nifty Future and had recommended a sell below 10200. Interestingly, the results have been too good and too fast. It closed t weak today at 9793. I would like to remind the readers - particularly those who have sold reading my post, to consider covering the shorts at around 9500 levels as it could provide good support - considering that it is 50% level as well as previous bottom.