30thJanuary2013

30thJanuary2013

DrC.K.Narayans

Nifty Edge

End of good times?

So much for the credit policy! We were all waiting, with bated breadth for the denouement and then what? Nothing! A damp squib. Even though the RBI was a little more generous than what we had thought. The polls showed
that the majority were looking for only a repo cut and not much else. But the largesse was a 25 bps CRR cut too.
Ideally that should have pushed markets higher. They did, but for a brief moment only, suggesting that the rise
was more of short covering and some adventurous buying. The quick reversal from the first of the expected targets at 6120 was brisk and volume led and on good breadth. So that is not good news.
Obviously the market is reading mixed signals into the event. While a repo+crr cut should create the grounds for

Wolfe wave pattern

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30thJanuary2013

Tes monials

Excellent program Dr C K
Narayan is real master of
hisfield.absolutelyclearin
histhoughtsonthesubject
& very encouraging .one
must a end this program
whoisseriousinthisbusi
ness.

an interest rate cut ahead, the lack of deposit growth prevents them from cutting deposit
rates and the current flight of money towards MFs is a source of worry for the Banks and
hence they may not be so quick on the draw here. It is also being reckoned perhaps, that
a downward revision of inflation could mean no cut in interest. It could be so many different viewpoints. The net sum is, the market quickly lost its initial sense of feel good and
once that happens, skid-row is the only route. As usual, traders abandoned longs and as
has been happening in recent times, buyers desert the ring and prices fall in a heap.
Once again back to the issue of follow thru to the downside as a clincher. Will it? Prices
are down into the support of the moving average bands, as can be seen in the chart on
page 1. Ideal situation for a renewed rise? Not quite, I think. The trend strength has been
rather minimal. The chart shows highlighted areas where the Adx has been on a rise and
we find that recent days the Adx has given up its ascent. Hence we are in a range type
situation. If declines begin here, it will be the first hint of weakness emerging. On the
120 min chart, the index has not shown weakness for over two months now! So we do
need to be on the alert here.

There is more evidence too. The last leg of the advance which many have made out to
be a rising wedge (it could be one, fits the bill in most respects) can also be made into a
Wolfe wave pattern. The angled line drawn on the chart gives us a target for the present
decline to around 5960. Now, that can be damaging as there is a sense of complacency
AasheshChandiwal
that 6000 cannot break. I do think a lot of longs are still left in the system. I felt that
yesterdays decline smacked of some selling rather than mere profit taking that has been

the case so far. So, if there is some follow thru to the downside today, it would be, first,
a change from the recent times and also two, there is room for declines. The pattern
mentioned above shows us how much. One has to then wonder whether the TCD men
tioned for 5th Feb will now suddenly become a low??? If there is follow thru to the downPrecise & objec ve earlier side, we shall change our outlook a bit and look for this. But in case the prices revive
once again, then we continue to look for the high on 5th. Given that the target zone has
workshop helped to work been hit, it may not be surprising to see a lower top form on that date either.

on lot of thing which has

improved my way of in
ves ngtremendously.
SushantKumar

The Bank Nifty has still not shown any

kind of weakness pattern like Nifty.

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30thJanuary2013

REVIEW OF BANK SECTOR LEADER STOCKS

MARKETPSYCHOLOGY

Most traders don't understand

howimportanthumanpsychol
ogyisintheareaoftradingsuc
cess. Traders harbor a belief
that they do know most of the
sturela ngtotheirtrading.If
thatwereindeedthecase,then
why are there so few really
consistently successful traders?
In reality there are also very
few consistently successful in
vestorstoo.Ifmethodsarethe
way to solve this issue then
everyone who does a good job
of technical or fundamental
analysis should become suc
cessful.Buttheyarenot.Ifthe
answer lay in knowledge then
who ever reads enough books
and a empts enough seminars
should become successful. But
theyarenoteither!
The correct psychology to deal
with the markets is important
whetheryouareaninvestoror
atrader.Thebigdierencebe
tweenandoperatorandanor
mal investor is only the way
they think. The operator is al
waysthinkingofriskandoppor
tunity while the normal inves
tor trader is always thinking
aboutprofitsandquickgains.

The much awaited RBI Policy was announced and the market reacted quite positively
but only for a brief while. The sudden evaporation of the enthusiasm has cast a huge
shadow on the possibility of further upward traction. In light of the policy turning out
to be a dampener we shall see how the leaders which we had covered last week has
performed.
ICICI BANK: Bullish indications continues to hold.
As mentioned the immediate resistance of 1200 has been surpassed by this counter.
Despite a meltdown in the overall markets this stock managed to hold on and has
closed above the said level. With a pullback offered towards the end of the day in the
intraday charts one could look to renter this banking leader if markets start showing
signs of bullishness again.
HDFC BANK: Heading towards pullback zone.
This counter paid respect to the 1x1 angle
line
resistance
and
headed lower . The stock
has still not tested our
supports of 640 indicated last week. In the
event the stock revives
from the support mentioned one could look to
go long in this counter.

STATEBANK: Curbed by resistances.

Despite a positive
RBI policy this counter could not muster
enough strength to
go
beyond
the
weekly resistance of
2530 and the subsequent sell off saw
the prices declining
with volumes. With
the sentiment getting shaken once
again the daily chart does not represent a confortable scenario. A break below 2430
which would be a breach of the recent value support region will be a definite trigger
for the bears. Watch out.

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30thJanuary2013

REVIEW OF BANK SECTOR LEADER STOCKS

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AXIS BANK: Beyond monthly resistance.

Axis Bank has proved to be
a true leader as it has lead
the rise amongst the banking stocks quite splendid
ly. As indicated last week
the move beyond 1400
saw the prices gain acceleration. Yesterday too the
prices were quite keen to
get started and the prices
witnessed a fantastic acceleration
which
was
fueled by strong buying
interest.
The
Bollinger
band on the daily charts
highlight the bands have
just widened , if the bullish momentum sustains then Axis could be on a roll again.
KOTAK BANK: Resistance challenged ..What next..?
Finally this stock came good yesterday with the resistance around 660 being surpassed. Some renewal of positive vibes in the market sentiment could see this
counter faring better. In the event this happens our readers can now participate in
this counter as it has given an indication of moving higher.
YES BANK: Resistance continue to haunt.
Yes Bank could not
continue its good
work
this
time
around as it failed
to capitalize on the
positive RBI policy.
After rising momentarily
beyond
resistance around
516
the
stock
quickly gave away
its gains and closed
well below it . A
Fibonacci retracement on the hourly
chart reveals 505 to be a good level to attempt some bullish trades in this counter.
Track this stock for a dip buy opportunity

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30thJanuary2013

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30thJanuary2013

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