Following are some clips from our Share Letters
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11/12/2006
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Last week broad market saw some selling at higher levels. Friday saw quite a sell off and
market closed on a weak note. Selling can be expected up to Nifty 3911 levels which should
be considered as a good support. The uptrend reversal will be generated if Nifty
breaks 3911 which could lead to panic selling up to 3794, 3630 levels. As we
have been advocating in past stay light and maintain adequate stop loss to all buy positions.
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29/11/2006
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In the above chart it’s clearly visible that in the last few days Nifty has made
Bearish Tweezer Tops and Shaven Head candlestick formations. While
Shaven Head is a bearish signal in an uptrend, Tweezer Top is a reversal
signal. Nifty has support around 3900. Nifty break below 3900 could come down to
3850 which is also the near strong support while the far strong support for Nifty is at 3794.
Panic selling might come if and when Nifty breaks 3794(which shall be considered as the
trend reversal signal for the current Bull Run).
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15/06/2006
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Markets around short term bottom. Short selling is not advised at these levels. Go long in
selective stocks giving bullish indications.
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10/04/2006
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After the strong rise in the last many days and weeks Friday say profit booking which led the
indices to close in red. This has resulted in the formation of a bearish engulfing pattern on
daily charts and a shooting star formation on weekly charts. Both these patterns are
bearish formations and can be viewed as an early reversal signal though
confirmation is required. In past many times we have had a bearish engulfing pattern
which got quickly negated in 2-6 trading sessions and the market resumed its uptrend. But
this time it seems it needs more attention as a shooting star formation has also developed in
weekly charts. To add to the bearish view is the long upper shadow (more than twice the
length of the real body). The shooting star is a bearish reversal pattern that forms
after an advance. It can be seen as a potential trend reversal or resistance
level. To indicate a substantial reversal the upper shadow should be relatively long at least 2
times of the body. Bearish confirmation is required after the shooting star which can take in
the form of a gap or a long black candlestick with heavy volume.
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