WEEKLY NIFTY VIEWS FOR 04.08.08

Dear Friends,
As suggested last week Nifty managed to stay above the second support level of 4168.It did reach 4159 for a moment after the Rbi credit policy but the closing was well above second support zone.The closing for this expiry was as anticipated and was inline with the Option data analysis.It is incidental that TSR Option analyst had recommended traders to short all puts options of Nifty below the strike price level of 4300 only last week with an expiry target price of 0.05 paisa.The recommended strategy did work as anticipated.As i always say there is no point doing postmortem in markets.the question of the hour is whats next in Nifty.The beauty of technical analysis is that technical analysts predict the move.They dont rely much on news flow unless its important.For them the markets tell them the news flow in advance and the markets react to the same in advance.People wont believe but a section in the market called"The insiders."always know what is supposed to happen and the outcome of the event.he insiders existed in the time of the great boy plunger"Jessy Livermore" and they do exist now.The reason why i have mentioned the insiders stuff today is because the movement in the markets in last four days were not anticipated by any fundamental analyst and wont ever be in future.The primary reason being the news flow which was not good.CRR and Repo Rate hike were as much a shock as the hawkish statement of the Rbi.The outcome of the event is that post the announcement markets are up almost 8% from the lows seen on the day.
We at TSR have one of India's largest stock market chat room live at http://www.niftyviews.com/ .One thing that suprised me was people were finding reasons for the up move and none had a satisfactory answer. There can be two reasons for the upmove(Although i dont believe in reasoning markets,for me markets are always right,wherever they go,Up or down.)one was the dip observed in Crude oil and the second the IAEA crossover.I believe that the latter might be the reason to pullback oversold stocks.Kindly note most of the fresh longs have been observed in momentum low priced highly oversold stocks.There is no point to long or short an ISPATIND,TTML,WWIL,TVS at current levels.If these are the leaders of the current rally.I sincerely doubt the leadership of the ongoing rally.The sugar sector were the first sector to outperform in the beginning of the last bull run.One should clearly use the up-move to clear portfolio of non performing stocks.We have a list of small cap future performers.Some have been 5-6 baggers in last year.Current recommendations are expected to follow suit.Rathi udyog (Now rathi steel and power) is in investment phase.The 47 crs market cap company has a 0.16 mtpa steel plant functional in sambhalpur and ghaziabad.It also has a captive power plant of 30Mw.Co has got coal linkages for 75% of its demand.If the company gets iron ore linkage in near future,stock will outperform.Moreover the company has asked board approval for setting up 1.6MTPA steel plant at a cost of Rs 2500 crs.At present the big dream is available at a cost of 47 crs.(Disclaimer:TSR Partners,associates,analysts and there clients have holding in the company strictly for long term.)
Coming back to Nifty,As i had suggested above technically we are moving up.One should never question market as markets are always correct.One should now be negative only and I repeat only below 4255 on a closing basis.Above that dont be a bear on a positional basis.Do remember the markets are here forever only the set of traders change who think they are above the markets.Have a close eye on Crude oil along with the data overseas.Till that time start churning portfolio using the upmove of the bear market rallies.Also do remember that there is a report on ET that government might try and flex its muscles on Soda ash industry now.Read the article yourself.here

WEEKLY SUPPORT 4356,4260

WEEKLY RESISTANCE-4540,4629

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