NIFTY : 23 April'12 - Triangle contraction and Wave theory explantion

You can study chart as of now.

[Click on image to view it clearly.]

Success ratio in trading carrier is very small in India compared to developed nations. I can say that majority of traders do not believe in the study of technical analysis which is nothing but the study of a reaction by mass towards a particular event. Most of the traders do impulsive trading which is a must avoid step during intraday trades.

I am giving you little reason to believe ‘Technical Analysis’ through free publication for public reading. I always try to explain each of my important levels rather than forcing you to believe me. Here are some key levels which were predicted successfully before they achieved.

• Recent hitting 5343 – Already given stiff resistance of 5339 nearly two days in advance.
• Low of 20 April 2012 – Market slipped in freak trade panic and low hit 5245, Support was mentioned @ 5343 before opening hours.
• 16 April 2012 and 13 April 2012 – Predicted for rebound from nearer levels of 5193 and then 5183. figures were predicted at least a day before
• 03 April 2012 – Predicted “gains may not extend above 5386”. Nifty slipped from 5179.
• 29 March 2012 – In my pre market study, I advised my subscribers not too try short if it holds 5135. Nifty reverses from 5135.90.

All above levels were explained time to time. Do take a note that “Technical Analysis” may not be 100% correct but still it’s the only tool for ‘intraday traders’.

Today’s view –

Nifty hit a high of 5136 before falling, which is 50 day’s moving average as of Friday’s trade. Fall came due to panic of freak trade but charts have changed. Technical charts are suggesting for stiff resistance at 5342 levels.

If weakness grows from current levels then we can expect fall up to 5243 levels first and then retest of levels near 5183.

One must focus on the above chart to see the development of contracting triangle. This breakout will make some great movement in expiry week. I am going to act short on rise again as long as 5342 sustain as resistance.

(Technical Analysis key:  - We are currently at such levels where we must have two views, one should be bearish and one should be bullish. Depending on market conditions apply the most suitable one).

Alter view suggests that if we spend time above 5350 then we will add more strength on forward momentum to see levels of 5400-5446 levels.

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Thanks & Regards,

Praveen Kumar

Mail id – Praveen@viecapital.com

Mobile number – 09893369889

Reliance industies : How will it open on Monday 23 April 2012

I can redefine reliance now as this quote,

“RELIANCE – Earning more through CASH and less through GAS”.

Starting with buy back plans –

Total buy plan = 12 crs shares

Total buyback till now = 5261131 shares

% buyback til now = 4.38% with avg price @ 752

Source link for above data is  (http://www.thehindubusinessline.com/markets/article3326969.ece )

Let us come on to the result

You have to accept that company’s core business is on definite slow down.

Positive – remarkablly better GRM at USD 7.60/bbl. (I must say that they have saved the possibility of big drop in stock price)

Worries are stil there. Why? Check this : -

• 21% drop in net profit for the fourth quarter of 2011-12 fiscal at Rs 4,236 crore.
• 150% grow of its other income to Rs 2,295 crore, accounting for over 42% of its profits before tax
• 39% drop in EBIT of oil and gas business at Rs 951 crore
• 32% drop in EBIT of refining and marketing business at Rs 1,696 crore
• 17% drop in EBIT of its petrochemicals business at Rs 2,174 crore

They have such a huge rise in other income that it’s concerning now. These are coming from its cash reserve of Rs 70,252 crore.

(Question – Do you know the name of any other company comparable to the size of Reliance and have such huge other income?)

(All above data are available on many web, I have just try to rearrange them to highlight the result performance).

Key question: - Where will it open on Monday?

Answer: -

A clear answer in a technician language – 718-715 (With low may be not below 700)

If Indian investors were sensible enough then drag may go below 700 then also technical support @ 680.

This question will have no meaning after 9:15 am tomorrow. Looking on result, I am expecting it to open on soft note but may not go for immediate slip below 700. This saving on 700 will be only and only because of buyback plan. (Who can guess about RIL management mood?)

Read my long term study on Reliance at given link. I am still confident on my study. I must say that I am bearish on this stock from 1100+ and I am right till now.

(http://viecapital.blogspot.in/2012/04/reliance-price-target-600-long-term.html )

Regards,

Praveen Kumar