Some of my friends keep asking me about stocks and write to me in private. One of them had asked me for my views on Titan Industries yesterday. This is what i wrote:
The stock has broken the Trend Line marked in Blue, and now the next support is at 225-215-205. It has always rallied from levels near 190. These will be good entry points for buying more into the stock.
As you can see, the stock is over sold on both RSI and CCI and crashed below both the 50 EMA and 200 EMA. I would slowly add or buy around 190 to 205 levels. Markets are weak, see my writing on the markets at Valuepickr.
Today the stock did exactly the same. Some times I wonder how precise Technical Analysis can be. Remember, some times it just does not work. That is why they say it is an art.
Here are some excerpts about QE IMPACT ON EMERGING MARKETS- Shyam Saran, Former Foreign Secretary- Economic Times June,11, 2013.
What we are seeing in the markets today is the result of the fear of US likely to reduce its QE in the coming months.
During the crisis of 2008-09 QE helped both the advanced and emerging markets. Before the crisis the US held $ 700-800 billion of Treasury notes. The current level is $ 2.054 trillion. The ECB pumped 489 billion euros and the UK 375 billion pounds. Japan has decided to pump $ 1.4 trillion in the next two years. It is estimated that about 40% of the increase in the US monetary base in the QE I phase has leaked in form of capital outflows and in QE II about one third has found its way into emerging markets. If this liquidity is withdrawn over a period of time you can imagine the impact it will have on emerging economies including the stock markets of India.
If you will remember the Asian financial crisis of 1997-98 was in part triggered by an earlier version of QE pursued by Japan. It does sound scary to me.
Looking at the RSI and CCI the stock looks oversold at these levels. The RSI is currently at 12 and CCI at -340. The 200 EMA is at 617. So i feel it should not fall below these levels.
Panic has set into the market and the Nifty fell below its 200 EMA which I had mentioned earlier. Now the next support for Nifty is 5500. Let us see what Mr. Market has to say.
The stock closed exactly near its 200 EMA. Let us see if it breaks or holds this support. The stock like most is near oversold level of 30 on the RSI and on the CCI it is -235. It is better to wait and watch at this level.
On the Point and Figure too it has support near 456 and then at 410-420 levels. If the stock breaks 456 then it will touch the lower levels. If it falls below 410, then one can expect much lower level of 380, as the trend of the stock would have changed to negative.
The stock has made a double bottom at 210. If it breaks this level then it can go all the way to 130-136 levels. There is no support shown on the charts.
However, reading the 50 EMA 199 and 200 EMA 184, the stock can take support at these levels. Or else the level of 130-136 holds good.
The stock has support at 550 where it had earlier made a double top. The next support is at 520 where it will make a triple bottom. If it breaks these levels then the next support is at 410-420.
It can also take support near its 50 EMA at 470. Let us see what happens tomorrow. The stock is way above these levels at the present.
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From April 2013, the Bank Bullish Per Cent has been at its lowest on 2nd April, 2013 (14%) and highest around 20-28 May, 2013 (70%). Currently as on 14th June, 2013 it is 21%.
Now let us see the charts on the Point and Figure :
One can clearly see that in the month of April, the Bank Nifty had touched 10900 (SELL SIGNAL) and in May, it touched 13400 (BUY SIGNAL). Currently as on today it is 11700 (SELL SIGNAL).
If one uses these readings to enter stocks in the sector, I have no doubt that you will be successful in your attempt.
The same is reflected on the candle stick charts too. Currently it is just above the 200 EMA. If it falls below this, one can expect another correction in Bank stocks. On the RSI and CCI it is over sold.
As promised earlier I have updated the BULLISH PERCENT CHART and posting the same for your visualization and comments. It is rightly said “A picture speaks a thousand words”. The picture on this chart gives a very clear idea as to how things are panning out in the Markets.
Today I read a good article on a stock which is close to me. It is FAG BEARINGS. I will not go into the long and short of the stock and leave it to the readers to go to the link here:
The stock is currently in the Sell Signal. However, it is in the X column indicating more buyers than seller. If the stock breaks out above 1550 where it will make a double top then the next level would be 1650 and then 1850. On the lower side it has support at 1280. This will also be close to the Bullish Support Line. Below this the stock will become weak and the trend will change. If it breaks down below 1240 then the next level will be at 1140. Let us wait and watch how the stock performs from here on.
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