India Stock Market

Free India ADR Stock Picks Updated Weekly Every Monday

Week of March 08, 2010

I'm seeing a potential bottom on my short sell trade plan on Tata Communications Ticker TCL. This has been a very successful short sell trade on Tata so far. I see possibly 12.47 and even better 11 to 10 as a price area to start accumulating some shares, with the 10.72 to 10.03 as a potential nice sweet spot support to take long positions. Last Fridays close was 12.40. If TCL heads lower than 10, I would be looking for 9.79 to 7.18 as the next major support area and potential next buy in point level. If and when I see more clear indication of a low-risk high-reward buy long entry into Tata I'll update it here. For now I will leave the short sell trade plan below from Jan 18 for reference.

March 01, 2010
Sell Position: Rediff.com India Ticker REDF
Sell Entry: 2.36 to 2.62
Stop-Loss: 2.65
Take Profit Areas: 2.04 to 1.91, 1.45 to 1.35,

January 22, 2010
Sell Position: HDFC Bank Ltd Ticker HDB
Sell Entry: 123.89
Stop-Loss: 138.92
Take Profit Areas: 109.74 to 108.01, 91.03 to 89.60, 66.32 to 65.28

January 18, 2010
Sell Position: Tata Communications Ticker TCL
Sell Entry: 15.76
Stop-Loss: 16.26 or Higher
Take Profit Areas: 15.26 to 14.26, 14.03 to 13.01, 13.01 to 12.70, 10.88 to 10.63, 8.10 to 7.91

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India's Stock Market: Is the Recent Selloff Here To Stay? - November 03, 2009

This Halloween, one grisly (or, grizzly) creature went door-to-door down Dalal Street, scaring the sweet gains out of every financial market that came in its path -- a giant, raging Bear.

Check it: In the last five days of October 2009, India's Sensex suffered its longest losing streak in 11 months. The massive selloff then culminated in the November 3 event widely known as the Bombay "Bloodbath." That day, the Sensex plummeted nearly 500 points, alongside a 147-point plunge in the National Stock Exchange Nifty to its lowest level in two months.

In the words of one November 3 news source:

"Anyone who thought the holiday on Monday would save the bulls was in for a rude shock. It was absolute carnage; an outright bear assault. All hopes of a rebound after last week's declines were completely shattered." (India Infoline.com)

"Hope". rapidly followed by "Shock." And who could blame them? Just two weeks earlier, India's bellwether stock market was the best performing equity in Asia.

And, according to the mainstream experts, those boarding the bullish Bombay bandwagon were in for a long, uninterrupted ride to new heights. On this, the following news items from mid October say plenty:

* "Indian Shares End Near 17-Month High. Excellent liquidity across emerging markets is driving Indian markets up. The Sensex will reach 18,000 over the next month" at which point, investors should begin to exercise caution and prepare for a correction. (Wall Street Journal) * "Nifty On Firm Foot. We've got over a nightmare of sorts." (Economic Times) * "Sensex & Nifty Soar To New 52-week Highs. There is a lot of optimism in the markets and Indian markets are in a long-term bull phase..." (NDTV)

Yet -- soon after, boom turned bust as the Sensex AND Nifty kissed their yearly highs goodbye in a sharp, synchronized selloff.

The Road Ahead For India: EWI's Asian-Pacific Financial Forecast Service presents unparalleled insight into the near-, and long-term trend changes in store for India's stock market. Get the complete story today.

As for seeing the bear's arrival BEFORE it came knocking on Dalal Street -- here, EWI's October 22 Asian-Pacific Short Term Update set the stage for the coming carnage with the following insight:

"The past two trading days have seen what looks like completed tops. Thus, the potential for declines is increasing. Increased caution toward equities is warranted at this time. India looks to be breaking down following the completion of five waves up."

Soon after, the October 25 Asian-Pacific Short Term Update presented the following close-up of India's Nifty Index (on the LEFT hand-side) and raised the urgency of its analysis with this message:

"India looks especially vulnerable to the downside. This market has had a good run higher and now shows signs of momentum loss. With five waves completed at multiple degrees, it's time to step off the bull train in India, if not time to outright explore bearish opportunities."

A Road Map To SENSEX 100,000 - June 15, 2009

This article was originally published as a special Interim Report of EWI's Asian-Pacific Financial Forecast on March 23, 2009. Since then the SENSEX has risen as much as 65%. For a limited time, Elliott Wave International is offering a full 10-page issue of the Asian Pacific Financial Forecast, Discover The Bull Markets You're Missing, free.

Prices in India's SENSEX have just broken above a downtrend line, imitating a pattern from 2004 that led to a strong rally. This interim report updates our wave count for India, since its wave pattern in particular may offer investors a rewarding long-term opportunity.

In the March 2009 issue of The Asian-Pacific Financial Forecast, we showed how pattern, price, time and sentiment considerations were pointing to the end of multi-month, five-wave declines in most major Asian-Pacific indexes by late March. In most cases, those lows have likely been achieved.

Although we have looked for a fifth wave down to below the October low in the SENSEX, it has failed to materialize. That failure plus the recent sharp reversal rally prompts our return to an earlier wave count. The daily SENSEX chart shows how the decline since the 2008 high can be counted as three waves. A three-wave decline opens the possibility of a rally back to near the 2008 highs. But there is reason to set our sights even higher.

Perhaps the best argument for a bull market in Indian stocks is the potential fractal relationship we identified in the November 2008 issue, published just four days after the October low. The weekly chart below is an updated version of the one we showed at that time. Here is our analysis from the November issue:



"The Wave Principle teaches that the stock market is a self-similar fractal. That means that some pieces of its price record-which Ralph Nelson Elliott called waves-resemble other pieces elsewhere in that record. The weekly chart of India's SENSEX shows just such an example.Notice how the up-down sequence labeled Intermediate waves (1) and (2) (in the small red box) is a microcosm of the larger up-down sequence from the 2003 low to the present (i.e., waves and , in the large black box). In both cases, the wave-two correction retraced approximately 50% of the wave-one advance. (We have calculated those retracements using the same logarithmic scale shown in the chart: logarithmic charting displays equal percentage moves proportionally).

"If we have identified this "nested fractal" relationship correctly, it means that Indian stocks are about to begin Primary wave of the bull market that began in 2003. Waves and lasted more than four times the duration of waves (1) and (2). If that same proportion holds going forward, the SENSEX may continue advancing for 15 years before reaching the end of wave ."

Since then, the analogy to the 2004 period ("The 2004 Analog") has become even more interesting.





Just as then, prices have broken down from an apparent triangle, and then reversed and broken out above the downtrend line. In 2004, prices never looked back after the breakout. As long as prices do not fall back below the low of today's breakout bar, we will assume that the 2003-2008 bull market will continue to provide a road map to the future of India's stock market.

For more information emerging opportunities in Asian markets, download Elliott Wave International's Free 10-page issue of the Asian Financial Forecast.

Asia Stock Market Forecast
Investment Opportunities for Asia's Big 6 Markets will give you specific forecasts and valuable commentary and observations for the following markets: India's SENSEX, Japan's Nikkei 225, Hong Kong's Hang Seng & MSCI, China's Shanghai & Shenzen, Singapore's Straights Times, Australia's ASX 200 & All Ordinaries.

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