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The US markets opened weak and the weakness continued for the first 30 minutes. And guess where it took support?
At 13400, which we had previously mentioned as the support to watch out for.The DOW hit 13398 before recovering from there to close at 13545. The support to watch out for is 13400 and if it holds up, we could cross the previous high at 13750.
The Blackstone IPO will debut tomorrow and going by the demand(notwithstanding the bad news surrounding it) it should do well.
India:
Though we closed at 13499, almost up 100points, we might see some weakness today. The support to watch out for is 14300. If 14300 holds, we should be on the way to 15000 over the next couple of weeks. We will continue to monitor the market for any topping signs.
The 2 sectors to watch out for over the next few dats are Reality(DLF IPO) and Banking(ICICI IPO).
In the post Dust off your bear coat!, we said the DLF listing is today. This is incorrect and the listing date is expected to be the 5th of July. The error is regretted.
A bad day for the US markets today. Both the DOW and NAZ down 1% and S&P500 down 1.32%. As said in a previous post, the previous high is acting as resistance. The DOW hit 13741 before reacting from there.
That being said, we feel this is not the start of the correction that we have been anticipating. The volatility that we have seen over the last 2 weeks indicate that the top is close by.
The Blackstone debut tomorrow should make things interesting. 13400 should offer support and only on the breach of that should we get the bear coats out.
The Nikkei, meanwhile, is holding out well.
India:
The weakness in the US today should get us off to a bad start tomorrow. With the listing of the DLF IPO, real estate stocks will see some interesting action. Gapup on Wednesday at 14300 should offer support for any weakness that we might have today. We have nothing to worry right now and we maintain a hold on existing positions. The bravehearts can initiate a buy-on-decline strategy.
The important thing right now is to watch the bounce on the DOW tomorrow.Just dust off your bear coats, don't wear them as yet ;-)
ATHR which has reacted from the resistance trendline at 32.53 can be bought for the short term. The target will be close to the the resistance trendline at 32.50.
We bought it an average price of 30.47.
We have covered ATHR at an average price of 31.12. The stock reacted from the trendline and we used the weakness to cover to give us a net gain of 4.53%
You know you have aced your appraisal when it looks like the ones below:
1.Since my last report, this employee has reached rock bottom and shows signs of starting to dig. 2. His men would follow him anywhere, but only out of morbid curiosity.
3. I would not allow this man to breed.
4. This associate is really not so much of a has-been, but more of a definitely won't be.
5. Works well when under constant supervision and cornered like a rat in a trap.
6. When he opens his mouth, it seems that this is only to change whichever foot was previously in there.
7. He would be out of his depth in a parking lot puddle.
8. This man has delusions of adequacy.
9. He sets low personal standards and the consistently fails to achieve them.
10. This employee should go far the sooner he starts, the better.
11. This employee is depriving a village somewhere of an idiot.
12. Not the sharpest knife in the drawer.
13. Got into the gene pool while the lifeguard wasn't looking.
14. A room temperature IQ
15. Got a full six-pack, but is missing the plastic thingy that holds it together.
16. A gross ignoramus - 144 times worse than an ordinary ignoramus.
17. A photographic memory but with the lens cover glued on.
18. A prime candidate for natural deselection.
19. Bright as Alaska in December.
20. One-celled organisms outscore him in IQ tests.
21. Donated his brain to science before he was quite finished using it.
22. Fell out of his family tree.
23. The gates are down, the lights are flashing, but the trains isn't coming.
24. This man has two brains: one is lost and the other is out looking for it.
25. He's so dense that light bends around him.
26. If brains were taxed, he would get a rebate.
27. Any dumber and he would have to be watered twice a week.
28. If you gave him a penny for his thoughts, you would get change back.
29. If you stand close enough to him, you can hear the ocean.
30. It's hard to believe that he beat out 1,000,000 other sperm.
31. One neuron short of a synapse.
32. Some drink from the fountain of knowledge, he gargled.
33. Was left on the Tilt-A-Whirl a bit too long as a baby.
34. Not the brightest bulb in the chandelier.
Here is a trade that can be entered by the bravehearts. The stock is United Phosphorous(UNIP) . This is a purely a technical call. The expected target is slightly above the previous high at 360. Please note that this is a short term trade and we will not be entering this trade.
This chart is a textbook example of the importance of trendlines which can act as support and resistance. The rising trendline for ATHR, which had been acting as a support, is now acting as resistance. Everytime the stock hits the trendlines and recedes from there. Taking advantage of this behaviour we have initiated a short at the trendline price of 32.53.
We had repeatedly been advocating that the nature of the bounceback will be crucial in determining if the top has been hit and Wave C has started, or, that we will go onto make higher highs. Let's take a look at the charts and see where we stand now.
US:
We had indicated 13200 to be a crucial support. As can be seen from the chart, we hit 13250 but recovered very strongly from there to close at 13640, almost 400 points up. The indices reacted from 2 key areas - crucial support 13200 and also from the 50EMA . The next resistance is obviously the previous high which stands at 13757. We still maintain a view of either closing out all long positions and having short term shorts.
India:
We had indicated 13800 to be the crucial support. The sensex meanwhile came down to 13950 and since reacted from there to abt 14335 before finally closing at 14163. As can be seen from the chart, the support came from the 50EMA. Another interesting support has been 14000. This figure has acted as a support sometimes and a resistance sometimes. The next resistance is at 14500 and then 14700. However we will take this as it comes and not worry too much about it right now. This is line with our previous view of looking at the market behaviour itself instead of worrying abt what it might and could do. The earlier view of short term buy still holds, unless otherwise indicated by the market action.
