EDEL WEEKLY TECHNICAL PICKS • TECHNICAL RESEARCh - 6th December 2010

Technical Pick #1: Kingfisher Airlines Ltd (KINAIR) - BUY CMP: Rs. 71.9



Rationale for call: On the weekly chart stock had formed an “Inside Bar” pattern as well broke the resistance of 21DEMA with good volumes. On the hourly chart stock broke the neckline of Inverse Head and Shoulder pattern further indicating positive momentum in the stock. Oscillator on daily chart depicts bullishness with RSI continuing their upside trend.


Buying is recommended at CMP of Rs. 71.9 with target of Rs.79.60 and stop loss of Rs. 67.5.


Target: Rs. 79.60
Stop Loss: Rs. 67.5


Technical Pick #2: Cipla Ltd (CIPLTD) - BUY CMP: Rs. 370.0


Rationale for call: On the weekly chart stock broke the resistance of 362.80 with good volumes and finally closed above the mentioned resistance. Stock is continuously making Higher Top and Higher Bottom on the daily and weekly charts further indicating strength in the stock. Oscillator still continued their upside move.


Buying is recommended at CMP of Rs. 370 with target of Rs. 400 and stop loss of Rs. 351.30.


Target Price: Rs. 400
Stop loss: Rs. 351



Technical Pick #3: Dr Reddys Laboratories Ltd (DRREDD) - BUY CMP: Rs. 1825.0


Rationale for call: Last few trading session stock was consolidating in the range of 1813-1765. On Friday stock broke the resistance of 1813 with good volumes. Beside this on the weekly and daily chart continuously making “Higher Top and Higher Bottom”, further indicating strength in the stock.


We reiterate a Buy on Dr Reddy at CMP of Rs. 1825 with target of Rs. 1955 and stop loss of Rs. 1735.


Target: Rs. 1955
Stop Loss: Rs. 1735

Market Valuations

Market valuation has reached at 12 times of TTM earnings which is a starting 
valuation point of last bull run.
 

Top Non-Sensex Group A Losers since Jan 2008

Here's the list of Top Non-Sensex Group A Losers during the Bear Phase from January 10, 2008 to October 17 2008.

United Breweries Ltd

Closing on Jan 10, 2008 : Rs 1,116  Closing on Oct 17, 2008: Rs 132  Fall (%): 88 Housing Development & Infrastructure Ltd  Closing on Jan 10, 2008 : Rs 1,018  Closing on Oct 17, 2008: Rs 125  Fall (%): 88 Indiabulls Financial Services Ltd Closing on Jan 10, 2008 : Rs 812  Closing on Oct 17, 2008: Rs 100  Fall (%): 88 Adlabs Films Ltd Closing on Jan 10, 2008 : Rs 1,533  Closing on Oct 17, 2008: Rs 201  Fall (%): 87 Indiabulls Real Estate Ltd Closing on Jan 10, 2008 : Rs 731  Closing on Oct 17, 2008: Rs 100  Fall (%): 86  There were no Sensex Gainers during this period.

Nifty Charts in Bear Markets

CORRECTIONS IN A BEAR MARKET - SENSEX
TOP	BOTTOM	PEAK	BOTTOM	Value	FALL	Period of
YEAR	YEAR	VALUE	VALUE	Of Fall	%AGE	Correction
APR 1992	APR 1993	4546	1980	2566	56%	12 Months
FEB 2000	SEP 2001	6151	2595	3556	58%	20 Months
JAN 2008	So Far	21207	10240	10967	52%	9 Months
CORRECTIONS IN A BEAR MARKET - NIFTY
TOP	BOTTOM	PEAK	BOTTOM	Value	FALL	Period of
YEAR	YEAR	VALUE	VALUE	Of Fall	%AGE	Correction
APR 1992	APR 1993	1281	600	681	53%	12 Months
FEB 2000	SEP 2001	1818	850	968	53%	20 Months
JAN 2008	So Far	6357	3199	3158	50%	9 Months

 

 

DOW JONES

 

NASDAQ

 

NIFTY LINE CHART

 

 

NIFTY CHANNEL

 

Will these supports (Dow, Nasdaq, Nifty) hold as shown above?

 

Your guess is as good as mine.

 

Best Strategy would be to presume they will hold atleast for the near term and take a call. If breaks then exit.  Risk seems limited.  In extreme panic do exactly opposite of what the herd does. No one can buy at the lowest reversal point of this bear market. Don't try, you will never succeed in it, but try and do strategic planning keeping in mind systemic risk and do take your own decisions with consultation with an investment advisor.