Friday, January 9, 2009

Satyam….

Governance or mis-governance – take it which ever way you want but the repercussions will be felt for a long time to come. The family run companies will come under a scanner but frankly I take it the other way. We the Indians require a kick to wake up to such facts and this would turn up a great opportunity to kick some a** and clean up the house. And what better time when there is not even an iota of a chance that such incident can be brushed under a carpet. The action should come from all quarters including some sort of policing by the govt. I am a firm believer that give private enterprise a free hand and they will put up their mothers for sale. That our economy is not totally open and govt enterprise itself a competitor of sorts to the industry – keeps our house in somewhat order when all the economies like US also tumble. Okay it is not the only thing – but it has a hand in our PM still sticking that we can grow at 7% – believe it – we are doomed only virtually – in real terms we still hold on to our place under the sun.

Yes – Satyam was our reason for the markets to be junked – but that was not the only reason – perhaps it was decided that the ‘Indian markets’ should be taught a lesson by FIIs, FII's were net sellers for a huge 1111 Cr and DII's too sold 505 Cr. The technicals too supported some sort of correction, maybe the global cues did their bit and we dropped – the drop ofcourse was like a flying bird dropping sh*t on someone’s head. See the reason why they say the overexposure in any one sector or company is not good for your financial health? now imagine the mutual fund houses who held satyam – at 4% of the fund allocations. And to think of it that I too bought 50 of them. They are in the drain as far as I am concerned. Do not get motivated by seeing it rising, as technically they are oversold and there may be a small relief rally. If there is no bid for acquisitions then it is very likely that it is going the TeleData way – all the way down to 7 Rs. We had a holiday yesterday and the Global cues have not been encouraging in the meantime. It is only yesterday the the markets are trying to show signs of stabilising abroad also. Europe was down FTSE at 0.05% down, DAX 1.17% down and CAC 0.65% down. US has shown some hopes with the Nasdaq up 1.12% and S&P up 0.34%. Only down was marginally down at 0.31%. Asia is trading confused with Nikkei in red by a percent, Hang Seng in green by about .38% and Strait TImes in green by 0.64%. Among the BRIC Brazil closed 2,87% in green.

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Technically the down trend started has the ability to do a lot of damage and could take us to much lower levels than those seen recently. The candle as you can see on the left is black and large. It almost covers the entire width of the Bollinger Bands. the bands that were narrowing showing low volatility may just start to expand today onwards and the uncertainty always introduces greater volatility. Look at the volumes – 191% of the recent times – almost double in other terms. The ADX looks down but the downtrend looks weak. The Slow Stochastic red line is below the Black and that is bad – bearish in other terms. MACD divergence is still in positive – though barely so. All the same so far so good. TRIX stays neutral and Jaggu says that the TRIN is negative. The RSI has fallen sharply down from around 60 to 47 but still bullish. Frankly take the technicals with a pinch of salt – the news driven markets like that started yesterday – does not go truely by the technicals. however a positive opening is almost certain because of two reasons – one we are oversold and two because the drop yesterday was sentiment driven due to a single event. But in the medium term now – a lot of companies will be re-evaluated and we have have opened the doors for lower targets. I guess the conspiracy is against me – not to touch the levels of 3200-3500 before heading down (LOL).

 

See the markets of day before? The markets could have got support around the pivot levels had it not been for the Satyam and at the most around the S1 levels – but the news and selling took it to the otherwise unimaginable levels of breaking even the S3 – I really did not calculate the S4 levels but that itself is the extreme. Hope that the levels today will be more saner than those seen day before.

Picture1

R3 3406 against 3226 yesterday
R2 3244
R1 3082
Pivot 2985 against 3103 yesterday
S1 2823
S2 2726
S3 2564 against 2980 yesterday
Projected High Range 3033 to 3163
Projected Low Range 3131 to 3001
Fib Projected High 3217
Fib Projected Low 2817

Best of luck – i believe everyone needs it badly today.


allvoices

5 comments:

Uma said...

Hi cheema, hope your journey was pleasant and safe. From MOnday onwards I'll be catching just the last hour of trading...I think the final hour is the best time to watch.

Uma said...

read somewhere that Ramalinga Raju had used the shares as collateral for debt. Now their debtors are going to come after them because the shares are worth nothing.

RAMAMOORTHY said...

You are correct. We need a kick in **** to wake up and notice. However, having woken up, we can do some things. Arrest Raju and all his family adult family members who have benefited/received at least Rs. 1 from Raju for conspiracy to commit fraud (120B) which carries a punishment upto 7 years. This will put a FEAR OF GOD into all those corrupt CEOs into doing such things. Let us hope, they will make an example out of this case for everybody to see

regards

S S Cheema said...

Uma: thanks for your good wishes - had a safe journey and reached safely. Yes Raju has used shares for collateral - it is a bad story.

Rama: (sorry for using nick name) I have seen the country as a whole - served in every part of the country. Believe me - we may not be radically changing but we do change and change at a pace that can take the country together is better than what our generation wants - instant gratification. We are doing great and I am sure that this too will be well handled.

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Regards
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