Market strategy and Thoughts :
Global cues are pointing way down with Dow Jones almost 670 points gives a real blow to market opening and impacts which may only be stopped by some regulatory intervention which can come during the day or before and it would be better if it doesnt come as any CRR cut , FED cut has only fuelled further selling.
NOW WHAT TO DO :
This is a very tough call to take. Luckily after January there might not be any leverage players so all one has is stocks on money. Although there could be many scenarios with govt interventions, announcements which may change the course of the day.
So there could be two possibilities out here :
1) Sensex holds above 10740 .
This is the most important recent low around 10740 and say 10500 which is another level but in panics no level comes into play. If this holds up for the day then a short term bottom has been formed and markets could head for a bounce. Strategy in this case would be to wait and watch and not buy or sell and let markets stabilize over the next few days
2) Sensex panics and goes to 9500-9700.
Continuing with the global panic starting in US and DOw Jones touching sub 9k levels, Sensex sees a panic and market breaks the lower zone of 10500-10750 then the index could touch the lower freeze level at 10200 and which would imply another touch to 9700-9500 in worst case.
Now this could be an extremely panicky situation and the first thing that comes to mind would be sell but mark my WORDS here i dont expect markets to correct beyond 8800 or say 9500 on a closing or even intra basis as of now. So in such a scenario will it be wise to sell at sub or very close to 10k levels well the answer is a BIG NO. So can we buy at 9500-with the 30 -40 % cash left the answer is obviously YES many stocks would be at irrational levels and if u dont have the guts to do so then dont sell at that price at least be patient over a week or next few weeks and let markets rationalize and stabilize.
" INVESTORS DONT SELL IN LOSS THEY SELL IN PANICS " \
" Many investments become LONG TERM coz PRICES have dropped, BUT SUPERLATIVE Gaining Long term investments are created by buying when SENTIMENTS have DROPPED "
CHEERS !!! HAPPY INVESTING...

Sensex Technical View :
Technically Sensex is making lows almost lower to the channel support and on a simple terms yes its highly oversold but still bearish. Now lets try to simplify it through some technical points .
1) 30 % dip
January the panic month saw a dip of 27.7 % . In July markets fell around 29.4% at 12500. Now in October we have made a low of 10750 which is almost 31 % . So as per previous observation the markets have already fallen as before and a very sharp corrective bounce should be round the corner.
2) Channel and Trendlines.
As we see in the chart there are two lines taking different points. One comes to around 11200-11500 and other at 10500. Also on Dollex charts indices are very close to the support line. Technically markets have not closed below this line even in major panics. If it closes below 10500 then the only sensible technical level is 9700.
3) Indicators
RSI , MACD and many other indicators are almost close to Jan levels which had seen lower ckts. In such a scenario it can be said that markets are getting into highly oversold panic levels.After such a panic scenario the bounce back could be very sharp.
4) Fibonacci Levels
The important fibonacci levels for the entire bull run is at 11900 and 9700 out of which 11900 is broken and implies we may very well head towards 9700 as the next major stop and the most important level for a change of structural long term bull market is 8799 which is a decider over next whole year.
After taking a clear exit calls at 18900/17500/16700/16100 we have been going with a strategy of buying in declines to sell on corrective bear rallies. Earlier we bought at 14k-12.5k to get back to cash at 15k +. Right now the decision to start buying slowly frm 12.5k to 11k seems we had started a bit earlier and only thing which gives a lil comfort is 50-60 % exposure taken and rest cash be kept on hold which should now wait only and let markets stabilize. Lots of stocks might have corrected 20 % lower from starting prices or quoting at those levels below acquisition price.
Technically all indicators, analysis points to an end of the correction at 10500-11200 but at the same time few days back it seemed 11200-11900 should hold so cant really say whether we will stop at 10740 or not but it seems 9700 zone is the most important zone as its the 61 % correction to watch in case there is a whole round panic coming over in global and indian indices.
Earlier in my previous post about the Big debate where in it was presented that 11900 or 9700 which could be the bottom zone for the market. My assumption that Sept/Oct may see an economic peak does seem to be right but the extent of it and the panic which i expected could take us to 11900 + - few hundred points seems to has gone wrong as the panic seen in markets has been much much more then i expected. So the debate seems to have turned in favour of 9700 !!!
Here in another attached view which i had was even if we have to go to 9700 the technical implication would be a low around 11900-11200 which would be 30 % dip and then a bounce of 20-24 % which may take us to 13500 and then we may see whether market breaks the low made around 11200-11900 and then we may take a call whether markets are headed for 9700 odd or not . So technically if we break the low around 10740 or say 10500 in coming days then we could very well head to 9700 odd levels. Also 8799 is the level which should hold over any panic and I HAVE pure belief that we are not going below coz thats a major level for the INDIA STORY which is still the best over next 3-5 -8 years....

Sensex Technical View :
Sensex has made a low around 11500 which is close to the support zone on the lower side of the channel. The channel is roughly around 11200-11500 as shown in the chart few days back. Technically the indices are in oversold zones , channel support and ideally should give a bounce back in near term. Also as seen previously markets have given sharp bounce backs after 27-29 % erosion in prices and we are almost getting into that area. Shorting should be avoided near to 11200 roundabouts and one can look to buy 3800/3900 calls as pure risk on dips to those levels .

Market Observations and Thoughts :

Its very difficult to stay composed in such conditions for a trader or investor but the only way to invest in these markets is to go staggered /slow in small lots and continue to maintain decent cash levels too even when things look so cheap, undervalued and tempting levels. Although technically the best way to buy is only on a turnaround and which may take a lot of time to come and value investing is a different story altogether and much more difficult too in current conditions.
As a matter of discipline investors should not commit more then 50-60 % even at 11200-11500 so that risk is lesser and decent cash levels could be utilized in panis or in a comfortable environment. Buying should be done 10-15% of intended qty at one price and then buy on further 10% falls in particular stocks.

Randomn Thoughts :

RBI,SEBI,FED,SEC all the policy makers are suddenly coming out with statements about liquidity concerns and measures. In the real terms its more of a reactionary measure then a precautionary one which doesnot help much.

Although the measures would have led to 5 % jump in seconds in better times are now suddenly seeing the news being sold into. Well coz majority of the measures are not to boost the money markets but to stop them from causing more damage.

I would expect CRR cuts followed by a repo rate cut soon . Fed may start cutting rate with an adhoc one possibly but it may be too late. Financial markets are under-pressure not because companies are going bust but the money and liquidity is not present so things may take much time to settle and consolidate. Suddenly inflation,crude, commodity,food is out of the picture ! as now its more of a financial mess!! and less of macro-economics. The month of October would be very crucial as lot of economic policy decisions may be taken !!.



Dow Jones :

Although the index made an interesting pullback from 9500 levels and giving a decent close but has not complemented the move in the next session. Technically 9500-9800 levels are important for the index as below which the supports and retracements are quite deeper. Also the index is highly volatile so one needs to see a confirmed closing before one can look for more indications....

Punj Lloyd and Educomp cracked quickly as expected and should be covered on tgts.

Bank of India which stood the storm may finally crack if sustains below 260 could tgt 248-225.

Bharti Airtel another stock which has not broken 680-700 levels in spite of market fluctuations. Need to watch that level closely if holds could give a bounce other wise a quick drop.

BHEL important supports at 1340-1400 which should hold on for some time.

RPL has broken below 140 and the next major support is placed at 108-112 .Reliance inds has a strong support at 1550 and one needs to buy the stock in staggered manner.

Chamble Fert,IFCI , IDFC look highly oversold and can give a sharp pullback and are fundamentally well placed for long term value also .

For more search Nooresh on Google......

Market strategy :
Since 16k-17k broke down on Sensex the view was consistent to exit and wait for 14k-12.5k zones for investment. Again after the accumulation the view was to exit at 15k + .

Yet again the view has been consistent to buy in stock specific in small lots from 13k-11.2k. Although this would be easy for people who have been following the views strictly and for others the pain in markets could get unbearable as of now.

This is a time only for investors who have patience and do pick up good quality stocks with due research done. As it happens in euphoria stocks can stay at highly overvalued levels for quite some time similarly in pessimism and panics lot of stocks can stay much lower then fair value. So best way to go is buy in small lots and go staggered as its very difficult to spot an exact bottom in panics. 11200-12200 is a good zone to buy stock specific and look to book them partially on profits of 15-25 % to keep a good cash level . One should not commit more then 50 % at 11900-13k and add only at 11200-11500 if it comes or wait . For people those who are stuck can commit fresh money at 11500 or roundabouts only with a view to exit on 25 % gains and lock that money out as part of discipline and consider it fresh money !!! .

For traders this may not be the best time as volatility will be very high and one needs to play with strict stops and agility.

For more search Nooresh on google.....

BPCL , HPCL are firming up on charts and could be bought on dips or as and when crude dips below 90 could see a run up .
Educomp below 3050 if sustains could give a dip to 2800 or lower and can be used for a quick trade.

For more search nooresh on google......

Lupin yet again is trying to give a breakout above 780 but vols are low . Difficult stock to trade though but a move above 780 could tgt 850 + .
Punj lloyd if breaks 260 go short for a tgt of 240 in short term with a stop of 269

For more search Nooresh on google...
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On further pressure, Chambal could go to 36, 30, and Nagarjuna could go all the way to 17-18....

better q.of this mth yes ...

Dear Nooresh, You touched one very important point. Let me make an attempt to add to it one more thing. This year\\`s higher inflation forms a base for next year. So if there is no significant difference in the price rises from now onwards, inflation figures will be lower. But is has nothing to do with the NPM of the companies, as the input costs are still higher than the previous higher( quite often, people get confused that lesser inflation means a decline in prices!). Let me make an attempt to see it from Individual and industry perspective. 1)Individual- For individuals, it( lower inflation) doesnt make any differnece unless their net incomes raise more than the raise in inflation, taking the previous year as base. 2)Industry- For companies, unless they pass on the higher input costs to customers, it( lower inflation) doesnt really make any difference. In fact there are many misconceptions about inflation. regards...

Amazing sir, I never knew that the base is of the previous year, i always thought it was of the previous week. Same goes for growth figures. ...

Good post Nooresh. I too was thinking of the base effect and how misleading it could really be. To compare inflation on a continual basis (past week to current week etc.) one should either look at the actual values (index) or use a common base for calculations. The problem here would be to determine what that base should be. One idea would be to use the previous week's index as base. Here if it is a positive number then inflation is rising or if it is a negative number inflation is going down. Of course the values themselves would be much smaller (about a percent or so). Regards OT ...

Hi Nooresh. inflation is down... how much rally we can expect in banking counter? you have any target for BOB and SBI? Thanks, Shyam...