Is this a time to buy?

As mentioned in our previous post 'Our Current View' , pasted below for reference,

We still maintain that we will see 15000+ before the Wave C begins. Some reasons for our bullishness:

We had a nice day in the DOW with it up abt 150 points. Following suit, we might have an average to good day in most markets tomorrow. Which brings us to 2 very important questions:

1. So has the recent corrective come to an end
   
2. Is it a good time to buy?

We feel the corrective has come to an end. In the end of April, we had posted a likely view of what we expect in the future. In this chart ignore the time dependency and look at only the price behaviour. The invalidating scenario is the break of 13200 in the Dow(leeway of 50-75 points) which will cause us to assume Wave C has begun.

The same holds true for Indian markets as well, with the invalidating scenario being break of 13800(leeway of 100 points). However the crucial difference lies in the individual stocks. While most US stocks are in distribution mode, the Indian stocks look set for a brief breakout. So in short - we can initiate short term buys on some select Indian stocks with a stop loss mentioned above on the sensex. Click here for some of our picks.

The Chart for today:

Has Wave C begun?

Another bad day for the US markets and Asia following suit with the Nikkei down abt 290 points(at one time abt 350 points). Continuing the same trend we should see India following suit. Let's look at some of the charts below for what to expect:

DJI:
The trendline that has served us so well has been broken decisively today. However as we can see from the charts, 13200(give a leeway of abt 50-75 points) offers support. If this is broken, then we can assumed Wave C has begun and short/close positions on the pullback that will follow.



Sensex:
We can expect a bad day today following the Asian markets. Yesterday, it reacted from the trendline and was down abt 75 points. However, as marked on the charts, the Gap up at 13800(leeway of abt 100 points) looks like it will provide support. We will see the action and make our decisions accordingly. The key points to remember during such times are:

1. Don't panic and lose your mind.
2. Be unemotional and if the supports that we track break, then get ready to sell on the pullback. This will provide us with the valuable cash and emotional stability required to profit from the next upswing.
3. Take each day as it comes. Don't expect action too far away. Observe and act.

Will Rain Calcining rain money?

RAICAL: This is a stock which moves in sudden spurts. The idea with this stock is to buy and hold it for a while to take advantage of the spurts. We had issued a buy call on this at 35. During the previous week, there was news of this company doing a 500Million USD buyout of a US firm. Using the classic 'Sell on Good News', we disposed off 50% of our holdings at 49.

We would not issue a buy on this stock. However if you are holding this stock, then you can exit the stock when it spurts up. Ideally we are looking at a target of 55.

Banking on Bank of India

BANIND: This is a stock that we have traded very often. We initially screened then stock around 155 and bought on declines upto 140. Since then the stock has done really well. We exited 50% of our holding when it hit 200 for the first time. Since then it has moved to 215 and is now correcting.

We can initiate a buy on this at about 190-195. The target for this stock is abt 270. What we really like abt this stock is the very high volumes that is traded on a daily basis.

Does USHA MARTIN look like a buy?

USHBEL: This stock was first screened at 185. We then sold off almost 50% of our holdings around 230. The only worry that we have with this stock is the liquidity.

Our current stance is to watch this stock and buy it on declines to 230. The target for this stock is 310.