analyse india forget the past

8/16/2019 Analyse India Forget the Past

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Indian Equity Markets – Forget ThePast !

August 8. 2012

Nooresh Meraniwww.analyseindia.com www.nooreshtech.co.in

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What to Eect "rom thisresentation#

We will be talking on –

Indices trend ( Sensex, Nifty and Bank Nifty ) in the past 2 years !years"

#lobal Indices trends"

$he co%relation of Indian and #lobal Indices" Nifty and India &ix co%relation" &ol'es on Nifty in recent allies and *rashes" Ipact +akers of Nifty !" - and ./ year cycles on Sensex"



Indian Indices $ The %ange &oundPast



Ni"ty – Time sent at '())$*+*)

0eeping 1olatility asidethe Nifty has barely

anaged to stay in thisband of 3%!/!



The Past $ %ange &ound Ni"ty in last ,years

Since the big r'n in +ay 23 Nifty has spent a4ority of the tie at 3%!/!"

$here ha1e been sharp o1es like the one in No1eber 2. to pre1io's highs andsiilarly a dip to !/. in 5eceber 2.."

S67 downgraded 8S in 9'g'st 2.." Nifty was at !2"

S67 downgraded India in :'ne 2.2" Nifty was at !!%!."

With 1ario's anno'nceents, global e1ents and triggers Nifty has basically fo'ndhoe in the band of 3%! or rather in the id of this range"

$his we belie1e is going to change o1er the next few onths"

;1eryone has now r'led o't any s'rprises for Nifty and the ass'ption is the rangewill be aintained"

+arket o1es the largest in the least expected direction"



Ni"ty on a * year chart

In Sept 2< we were at! and we are alost

at sae le1els in 9'g'st2.2" =1erall e1en on a !

year frae we ha1espent ore tie aro'ndthe 3%!/! band"



-ymmetrical Triangle



-ymmetrical Triangle seen on -enseNi"ty&ank Ni"tyand /lo0al Indices.

S'ch a triangle foration leads to a h'ge o1e on breako't" Breako't is abo't to happen in any indices as all ha1e copleted <> of

the tie in the triangle"



-ymmetrical Triangle on IndianIndices



-ense – Triangle on 1aily chart

$riangle Breako'tabo1e

.<!!%.<?!"

$he contractions'ggests it sho'ld bebetween 9'g'st to

=ctober"

@alse +o1e5o'bleBotto



Ni"ty – Triangle on 1aily 2harts

$riangle Breako't abo1e!/!%!"

$he contraction

s'ggests it sho'ld bebetween 9'g'st to

=ctober"

@alse +o1e5o'bleBotto



&ank Ni"ty – &reakout needs Momentum

@irst 9ttept at breako'tade" 9 o1e beyond.3%.. will gi1e

oent'" angecontracts s'ggest

Septeber to No1eber"



1ou0le &ottom 34.56retracement on 2N7 1e"ty



2N7 1e"ty – 1ou0le &ottoms at 34.56retracement

5o'ble Bottos at ?."-> retraceent"



Ni"ty and IN1I89I7 2o$%elation,)4)



India 9i and Ni"ty 2o$%elation $:-etem0er ,)4)

&olatilities contin'ed to

fallWitho't a rally in Nifty"

&olatilities contin'ed todip

Witho't a rally in Nifty

A'ge ally in Niftywith ising&olatilities

cr'shing Writers"

&I to'ched and

arkets ade panicbotto at <"



Ni"ty and IN1I89I7 2o$%elation,)44$4,



India 9i in ,)44$,)4,&I has to'ched .%.! le1els with arange bo'nd arket" Indicating a

directional breako't" *an it be siilarto Septeber 2.



%8N/E &%E8;<=T

This range o" *)))$*')) will eand in the near "uture.

It>s a symmetrical triangle which can 0reak on either side.

The triangle si?e is almost *))$4))) oints which gi@es a 0igdirectional change o" trend in coming months.

The ae o" the triangle comes in No@em0er end so a 0reakoutshould ideally occur 0e"ore it.

8s the triangle comresses a 0reakout can occur any time 0etween

8ugust 4* to <cto0er 4* gi@ing a maAor directional 0reakout.

2ritical oints would 0e *+*)$*')) and '())$*),) "or momentum.

Bets look why the ro0a0ility on the =P-I1E &reakout is highest.



9<B=ME- $ NIFTC



Ni"ty 9olumes&ol'e rise with fall in

arkets" *reated a peak in2." 9 reco1ery to !3!

created hopes"

ally of :an'ary with 1eryhigh 1ol'es created a

botto" 9 p'llback to -has created fear"



Falling Wedge %e@ersal on Ni"ty



Falling Wedge &reakout

9 little break ondownside

@alling Wedge Breako'tcreates long ter bottos"



/lo0al Indices Trends



/B<&8B IN1I2E- – Trend %emains Positi@e

MaAority o" the glo0al markets made their 0ottoms in 8ugust to<cto0er ,)44.

Duite a lot o" markets are u 4)$,)6 "rom those le@els and ha@e notre$tested their 0ottoms.

Indian Markets made a low little later in 1ecem0er ,)44 and ha@e

underer"ormed "rom 8ugust lows to glo0al markets.

The trend remains @ery ositi@e "or /lo0al Markets thoughmomentum seems to 0e slowing down 0ut can catch u any time withthe strong utrend continuing.



1ow ones – 1aily 2hartAigher $op Aigher Botto

after testing breako't le1els"

Not far fro the 2.2 highs"



1ow ones – Weekly 2hart

Aigher $op Aigher Botto

contin'es with oent'"+o1e abo1e .//! will take it

to 2- highs"



1ow ones – Taking &ears "or a %ide=side

@ractalally and *orrection on break

of trendline gi1ing false hopesof big crashes"



&o@esa – -etting "or -hort Term &reakout.+'ltiple Bottos and *hannelBreako't on *ards"



282 ') – -ymmetrical Triangle – Waiting to&reakout Syetrical $riangle with

Aigher Bottos"



187 –Trend remains ositi@e 0ut a new mo@e a0o@e G)))Syetrical $riangle with

Aigher Bottos b't breako'twill

$ake tie"



FT-E 4)) – %ange &ound

Syetrical $riangle and aa4or resistance at !3%?"

$rend reains positi1e"



Hang -eng – Forming a triangle similar toNi"ty

Syetrical $riangle 4'st like

Nifty with apex aro'nd 2./"



Nikkei – %ange &ound Mo@ement2ontinues.



-hanghai – -ymmetrical Triangle&reakdown Imact.

9n exaple of what co'ld

happen ifa syetrical breakdown"

No signs of bottoing o't yet"



Taiwan – Making a 0ase$ Duite "ar "rom&reakout.



87I- &8N; – Triangle Formation.

.- on 'pside is the trendchange point and 3< on lower

side" 9 break o't of this rangewill gi1e a .!%2! point

o1e"



&P2B – Bong Term &reakout 0eing re$tested.

//%/!! a strong s'pportCone" *'p and Aandle

Breako't

#i1es a target price of %!"



IMP82T M8;E%- in Ni"ty



&HEB – 8t *$G year lows.

+a4or lows at .3%2 in last!%< years" Signs of Bottoing

o't"*an acc''late with a stop of

.3"



H2B TE2H $$$ Future Beader o" IT ack.. $he breako't at /! got it intoa new range to !/" $he next'pside co'ld take it to ?! inlong ter" 5ips to -%!2 anacc''late area" Stop below

?"



H1F2 Bimited – %ange &ound 0etween 3+)$G+*.

#ood base b'ilt at ?2%??" B't 'pside resistanceat </" 9 o1e beyond that wo'ld *onDr a

a4or breako't



I2I2I &8N; – &reakout done &uy on dis.

$riangle Breako't done and oent' abo1e. which is a critical resistance for long

tie"



I1F2 – 8nother triangle waiting to0reakout.

Aigher $op Aigher Botto with triangle

breako't9bo1e .! le1els can gi1e a o1e to .-"



In"osys – Nearing 34.56 retracement.

?."-> retraceent of entire o1e fro 23%2..

9nd top of 2! in 2- is a s'pport Eone" Wecan see soe bottoing o't foration in

coing onths"

;otak Mahindra &ank – 8t retest o"



;otak Mahindra &ank – 8t retest o"&reakout.

7re1io's tops at !.%!/ will act as a strongs'pport" Fong ter 'psides to <! again"

9cc''late on dips till !2 with a stoploss of

!"

Barsen J Tou0ro – Momentum a0o@e 4'*)$



Barsen J Tou0ro – Momentum a0o@e 4'*)$4*)).

Nice base ade at ..%.2!" 9 newoent' 'pside will be seen abo1e

.!%.!"



<N/2 – -etting u "or a &reakout.

With 'ltiple bottos on the lower bandof 2%2!" $he next breako't sho'ld be

abo1e 23!%/

Which can gi1e a .!> 4'p"



%eliance Inds – Falling Wedge &reakout

Botto sees to be ade at ?<%<"@irst indication of re1ersal wo'ld be on

s'staining<! and <- on closing basis" 8pside targetswo'ld be 3" Breako't expected in next /

onths"



-&I – Holding the suort line.Still away fro a breako't b't till it holds.-!%.3 trend reains positi1e" 8psidebreako't can be seen abo1e 22 le1els"



Tata Motors – %etesting &reakout Kones.

*l'ster of s'pports at .3!%22 which wasthe last

+a4or breako't point" We ay see thestock backto 2<%/ in long ter"



The 4+ Cear 2ycle on IndianEquities



&last "rom Past

The 4+ year cycle resentation already in u0lic domain "rom 8nalyseIndia since -etem0er ,))*.

Wherein we had mentioned -ense target at ''kGGk 0y ,)45.

8nother cycle is 5 years o" scam and tos.

4((, – Harshad Mehta

,))) – ;etan Parekh

,))5 – %amalingam %aAu %eal Estate &u00le.

,)43 $ To and Names

&e"ore these eaks the last + years ha@e seen maAor 0ull runs.

4(5($4((, 4((($,))4 ,))*$,))5.

In that case ,)4+$,)43 should 0e thenet Time cycle

Sensex



S'per B'll'n G

5ow :ones G /

yrsSensex G./

yrs

*onsolidation5ow :ones G .<yrs

Sensex G ./ yrs

set forb'll r'n

till2.- HH

9'g23

9'g

2.2



9 terinal breakdownbelow the trendlinebefore the big rally

9 terinal breakdownbelow the trendlinebefore the big rally

9 long parallelchannel

9 long parallelchannel

9lost 5o'bleBotto close to

trendline



2onclusion

Ni"ty-ense and /lo0al Indices are setting u "or a maAor directionalmo@e o@er the net +$3 months.

The inLection oint could 0e 0etween mid 8ugust to No@em0er where a0reakout has to come with contraction in the triangle atterns.

*+*)$*')) and 4G3*) are resecti@e le@els "or Ni"ty-ense which will 0e0reakout oints.

<n the downside a mo@e 0elow '()) and 43))) are le@els 0elow whichthe ositi@e @iew gets negated and would 0e our stoloss.

=side target "or such a mo@e would 0e *))$G)) oints taking it to *5))$3,)) 0and. 4*))$,))) oints on -ense taking it to 4(*))$,)))).

&anking Financials <il and /as could 0e the surrise 0ets "or the uside.

We may eect maAor outer"ormance in midca stocks which ha@e notarticiated yet and the action could start in them right away.

In short – Forget the Past J 0last aheadto a 0etter "uture!!



;nowns

/reece is almost 0ankrut. Italy and -ain net in line.

Cields "or -ain and Italy ha@e hit Euro era highs a0o@e G !

/ermany , yr treasury notes going at negati@e yields. Many othercountries ha@ing similar negati@e yields on , yr notes.

=- treasury yields at their lower in last century.

=- in a 0ig de0t ro0lem and Euroe continues to sink. E2& and2entral &ank talking 0ut no clear actions.

2rude at 44) 0rent with =-1 – IN% sustaining *3 le@els. 2urrent 8ccount 1ecit continues to 0other.

InLation showing no signs o" slowing down 0ig way.

Interest %ates continue to 0e high with less room "or %eo rate cuts.

Policy Paralysis continues.

P-= &ank NP8s increasing with lot o" restructured assets. Trading 9olumes in cash segment at G year lows.

8=Ms o" domestic "unds shrinking with @ery low retail articiation.

FIIs ha@e still not started selling.



=nknowns

F1I in %etail Insurance -ector %e"orms. 1ro in /old imorts will imact 281 ositi@ely.

8n utick in economy will lead to reco@ery in P-= NP8s

Power -ector %e"orms 0y the go@ernment.

1iesel %ate Hike.

-o@ereign 1ollar &ond.

/88% re@oked

Incenti@es "or Equity In@estment.

/o@ernment starts working.

Trailing 4, mths 4' times and 4+ times 4 year "orward P$E is 0elowthe mean.

/lo0al Biquidity rush "or risky assets.

Markets mo@e on eectations ratherthan 8ctions !!



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