DON'T BE BRAVE – Panic has no Logic. Sit and Research, Focus on Quality

This is just a quick note to investors and traders.

Let not a stock being down 10-20-50% be a reason to buy a stock. Pause and Research. Take your own time. Some times missing a big trade will be better than sitting in a totally damaged stock.

Over the past few sessions have been mentioning on a lot of midcaps/smallcaps under manipulation and warnings FINANCIAL TECHNOLOGIES
was given as a sell at 700
For now there is no point catching falling knives. Let stocks fall down as much and stabilize. In such sentiments stocks may not go up 50% quickly. So you may get an entry maybe at a higher level but in comfort and after research. 

Continue to research and read up on companies as not everyone will go bankrupt and there will be some superb bargains. Do not hurry and sit tight. If you have researched a stock do mail it to us onTRENDZOFMARKET@GMAIL.COM

Although i had posted a positive view on Nifty and large caps a few months back and Nifty did bounce to 6100 and we have still not broken on Nifty supports but Bank Nifty, Midcap and Smallcap Indices have broken down and some have reached 4500 levels of Nifty and in some cases even 2008 levels. So we may even see Nifty holding with index management and stocks collapsing. we have been warning continously on avoiding dud stocks over last few days.

In such scenarios the best thing to do is DO NOTHING in markets and let things stabilize. If you have researched a good company then can sit tight or even accumulate, But do not venture into stocks because of a fall.

Panic has No Logic. Nifty continues to hold the 5600 band keeping the benchmark under control. Mind you even shorting can be risky in such conditions and sharp bear rallies can kill.

Focus only on quality stocks !! Stocks we are looking at to buy NBCC at sub 100 slowly , Rallis India at 120-130, Biocon a short term pick , Ab Nuvo at 1100-1000. Sun Pharma advanced at 100-80 in panics. We will soon be coming out with detailed notes on many stocks where we believe risk-reward and long term opportunity.

WAT TO DO WITH Financial Technologies. NOW?

Todays big news seems to be the 60% fall in Financial Technologies.

The first hint of something being wrong came in technically. I had posted this
http://trendzofmarket.blogspot.in/2013/07/financial-technologies-major-breakdown.html with 600 target.

Unfortunately sticking to the conservative strategy we booked at 600 in 4-5 sessions . 

This is how the chart looks now. 

 

A few days back there was an article showing how Financial technologies was sitting at a huge risk- http://t.co/iM2QwEDALl in economic times 

For last couple of years had been reading about many advisors talking about 14-17% returns through the NSEL products. This did seem unsustainable.

Today when suddenly NSEL contract suspension news came in people are realizing the risk with Financial technologies.
Currently the stock trend remains down and if market rumors of a major payout crisis is to be believed the liability risk can be huge for Financial Technologies. Maybe it will come out with no issues but its not worth the risk.

So if you hold the stock pray that company manages to get out of this mess. If you do no hold it be relaxed and give it a miss unless you are ready for another 20-50% crack risk on the stock.  No need to catch this falling knife.

From the above post its very clear as to why Technical Analysis is a tool which every trader/investor should know of to be able to get out of such risks. Technical Analysis would not have suggested the stock would fall to 200 rupees but it definitely gave an exit signal. Also one of the simplest rules a technical analyst follows is a stoploss which helps to get out in such cases.

 

Lots of Intra-day Drama on Status Quo Fed Policy

 
It was an interesting trading day for S&P500… too much of drama and Up, Down and Nowhere action for a status quo policy.

Here’s S&P500 Emini Futures Intra-day Chart

As you can see in the chart above: the day started with strength and Optimism. S&P500 Futures rallied from 1685 all the way to 1692.5 before Fed’s policy announcement and then drifted down to 1685 just before Fed made the policy announcement. It was a quiet period. Then came the status quo policy
Federal Reserve Announces No New Change To Policy, But Flags Low Inflation As A Risk
The reaction was of the relief and S&P500 did a sharp bounce only to sell off on some tapering talk/risk. Emini futures slipped below 1685 inviting shorts…only to be eaten up.
As it always happens in Bull market – the shorts get squeezed and that’s precisely what happened. S&P500 futures managed a stunning recover from below 1685 all the way to 1694. It was a totally one way move. There was a real panic among shorts. Lots of traders would have covered shorts and gone Long – Hoping for fresh breakout.
Did it happen? – No [Policy days are too volatile to trade. You have to be really lucky]
Just when everyone thought that on spot S&P500: market is about to make new HIGH above 1698: well market sold off

S&P500 sold off from 1698 in a pretty dramatic and linear fashion. The futures slipped dramatically to 1681 before making a minor comeback. On a daily chart: S&P500 has printed a large exhaustion tail on the upside.
How does Chart look now?
S&P500 is trading near all time high. The resistance is now clearly developing at 1698. Despite being in bull market, there are signs of exhaustion at the top and one should not rule out some pullback to make the market healthy for upmove. The next data point market will be keeping an eye on: US Jobs data on Friday. There is nothing wrong Globally and Indian market has more to worry locally than Globally.

INFRASTRUCTURE :Allz is WELL: No It’s not looking good

Have you looked at the infra stocks. They have now been hammered beyond recognition. Just have a look at the charts of major infra companies


GMR Infra Chart

When UPA Government came to power in 2009: GMR Infra stock price was 82. Today it is 12 – down 85%. Stock market is writing off the company

GVK Power

When UPA Government came to power in 2009: GVK Power stock price was 45.8. Today it is 5.8 – down 87%. Can the company survive?

Lanco Infra

When UPA Government came to power in 2009: Lanco Infra stock price was 37. Today it is 5.2 – down 85%. Can the company survive?

JP Associates

When UPA Government came to power in 2009: JP Associates stock price was 138. Today it is 37 – down 73%. The company is leveraged and market is worried about state of finances and completion of projects.

Conclusion
There is very important lesson that these stocks give us. When things start turning bad, never underestimate how bad they can get. That’s the same problem people are making with Indian market as a whole and Indian economy. You cannot imagine how bad or worse things can get. So, better watch from sidelines than be brave.

IDEA: Slow and Steady Breakout delivers 70% returns in CY13

 

Slow and Steady wins the race. That’s what this breakout has delivered – stunning returns in slow and steady fashion.

Idea Breakout happened on 26th December 2012 above 100 with lots of excitement. I DID  COVERED THE STOCK THEN 
But in next 3 months – nothing major happened and stock pulled back to 103 again. Though first 3 months did prove that breakout was decisive. It meant stock was a BUY on pullback. That’s why stock took support at 103 and rallied again – and in next 4 months: stock rallied almost 70% to now at 168+. That’s a major major move in a CY where market has been in complete mess. That’s how Break outs work if they have to. Remember, there are many stocks that have failed in breakout move but when they work – that’s what they do: deliver huge upside gains

COAL INDIA HEADING TOWARDS 250

SELL COAL INDIA  FOR 250 + BROKE MULTIPLE LONG TERM SUPPORT BUY WAIT AND BUY 270 PE TOO

NTPC on its way to 105-110

  SELL NTPC BELOW 136 SL 141 TARGET 110 ( lot size 2000) ALSO RECOMMENDED 130 PE AT 2.45 PS

Disclosure :  Have Sold below 136 today in futures  made 129.8 low till now and 130 pe 4.00 rs