Metal Focus: Copper, STER, SAIL, JSW

In the following post discuss charts with focus on metals.

Firstly, the major metal chart:
1. Copper:
Copper is making divergence of chart. It would be hasty to call a top on copper, but a short tern rising trendline (1) is been broken.  However, line (2) is a major support line. Sub 340, major bearishness shall creep in the commodity. As of now, i see, copper making a topping structure. I am not able to fix up wave count, but would advise caution over longs in copper.

Follwing is EOD chart of Copper:

Coming down to metal stocks:

The following stocks are focussed on:
1. Sterlite
2. SAIL
3. JSW Steel

Sterlite (CMP 837)
The stocks seems to have completed wave 2 upside and is poised for downside of wave 3 been in the range of Rs. 560.

Have posted comments on chart. For any short, i would consider a stop loss of 871. But, until new high is made on Sterlite, i would have a bearish outlook on Sterlite.

Plus, with copper making or been in a topping process, the stock is poised for major downside.


2. SAIL:

Following chart of SAIL is pretty self explanatory. I have posted my commnets.

On EOD basis the stock is bearish. On intraday basis, the stock can give bit of upside.

EOD Bearish target: 150 Current price 228

Intraday short of bull case: target 239

Bear case, target 214

Refer chart for comments:

EOD SAIL

SAIL Intrday 60 min chart:

JSW Steel (cmp: 1288)
JSW Steel is a gravity defying stock. i would say there is a major rising wedge on stock.
Breaking FW(2) line wil be bearish for the stock with Price target in range of Rs. 600. I would not say it will break in this week or not. But, if FW (2) breaks, then targets of Rs. 600 are possible.


JSW Weekly chart:

Disclaimer: The above is my analysis of stocks and not any recommendation. These are my studies and based on which i take my own trading decisions, Nothing above should be construed as trading advice.
Use your own stoploss, protect ur capital else u r screwed.

Metals: Still a Time To Shine

The Wave View: I am labelling the wave structure under ABC scenario for now, since the move is more sideways rather than impulsive.
I consider TATASTEEL to be in wave Y of Double Combination, having its internals as ZigZag, with A completing 5 waves at Oct 2009 at e:585, and now moving in wave C.

Under one of my count, I consider to be making an Extended wave C / 3 where, where are completing wave (iv) on 13 jan 2010, thus moving t wave (v) which can reach to Rs. 700. That would complete wave c / 3 and then one small blip to Rs. 660 levels to complete wave d / 4 and move higher to Rs. 730 to 750. Now, I am giving very broad levels, since, market tends to do its own rather than mine :)

However, considering this is not an Extended Wave for wave c / 3 then we are ready to move last leg been wave e. This is also plausible, since considering that fact that Wave A in wave Y did not have such extention. In that case we could then have a high in the range of Rs. 700 to 720.

Tatasteel:

 SAIL:
Intraday Bouce: Inverted Head and Shoulde - Time Frame 30 minutes

I was rather bearish on SAIL based on my post SAIL: Cup and Handle however, this pattern has been voilated, and there is an Inverted Head & Shoulder. Based on inverse Head and Shoulder the target of stock works out to 250. The current price is Rs. 242 and neckline is Rs. 240. For any one initiation long position, the stop loss can be Rs. 237. The risk:reward ratio is not that favourable, however, i woul not rule out, the stock going more than Rs. 250 with max of Rs. 255 is possible. The range of Rs. 244-246 seems a good resistance for stock.

Chart attached with levels:

STER:
The wave structure, still suggest good upside, with support still held on trendline 1, which connects all major wave point lows and can target trendline 2 which is connecting major wave top. As long as trendline 1 is held on closing basis, i would expect the stock to reach trendline 2 on upside with targets of Rs. 1000 from current price of Rs. 826. The stop loss would be difficult to tell, one could have it as breach of Trendline 1 on closing basis. Rs. 800 seems to be a good support for long. I would prefer cash long on stocks rather than derivatives. The following is wave chart attached for STER

Based on above wave count, it seems we are in last leg up. We are in a double combination structure for now, based on which as on long as trendline 1 is held, we can even move to Triple Combination. However, for now, upside seems capped only to Double Combination with high possible to Rs. 900-950-1000.

The weekly charts of Ster (similar to many stock charts) show, rising wedge, with declining volumes and negative divergence.

STER WEEKLY:

Sesagoa: Refer Chart, CMP 404, as long as trendline 2 is held, target works to 430(resistance line) - 450 - 480 (trend line 1).

 If these metals stocks are for upswing, then midcap metals would do rather better i guess. Adhunik Metaliks (CMP 120 made an inverted hammer at resistance of Rs. 120, and on upside can suggest a Rectangle sort breakout which can take the stock to Rs. 160. Attached charts with possible target zones.

 Bottom Line: Most of metal stocks have bounced off their rising trendline yesterday. That is rather a bullish case. As long as this trendline is held, the target shall be higher for the metal stocks, and i think we still have some shine left. If one is to look at Nifty EOD chart, there is rather alarming Cup and Handle Structure, which itsef can make Nifty reach 5400+ zone. However, i would not be rather adamant on target. Have a trailing stop loss, and trade.

The above studies are based on Technical Analysis, these are not trading ideas. One should take own decision, always use stoploss

Suzlon: Rising Wedge in Place

Back on 22nd Dec 2009: under Post: "Stock Ideas", with this Chart, expecting a price target of 116. The stock is currently at 93.50 (recommended at 84).

There seems the stock is gettin bit cautious, the stock is process of forming a rather Rising Wedge rather than a parallel upward channel. Looks like a good short candidate.The upside for now seems a bit limited. The stock has made intra high of 94.3. But, be cautious, if it reach 116 i would be happy, that been my primary target. However, currently, watch rising wedge, if breaks it can test trendline from top made at 145 in 5th June 2009

Rising Wedge:

These studies are based on technical analysis and the author nor the webpage shall be responsible for the profits or losses. The author may or may not have personal holding.
We are all students

NSEIT: A Top in Place or just a little bit more before the tumble..

NSEIT:
NSE IT: has had a stellar rally from the bottom made in Mar 2009 to current 5923. Since the rally has been parallel the structure has been a corrective type rather than an implusive one. The index has made a top in y2K rally, so i am considering all charts as a corrective pattern rather than impulsive one.

Wave Strucuture: The Index is in WXYXZ, where we are in process of making a Final Z Top, thus making IT index ready for a PLUNGE. Max i think on the upside we may as well see 6100 to 6200 zone, however that would occur, where the Index decides to make an Ending Daigonal for Wave Z. Currently, the wave Z seems to be a ZigZag formation ending with Three Black Soldiers.

Daily Chart Wave Count Comment:
Ideally, a top would be good with Infy results coming out makin it a Blow-Off top wave "e", been a proper Ending Daigonal for wave "Z" Top. This is a typical Triple Combination with:

(1) W been a Zig Zag,

(2) wave Y exhaustion  with another double combination,
   1) with Wave "w" zigzag,
   2) "x" small triangle,
   3) wave "y" been a triangle "abcde". As we know about triangles, "triangles generally appear in wave prior to last actionary wave. As such, it has occured in wave "y" of wave Y.

Now, we are in last leg of upside move for this Index (all IT shares). Currently, the rising X'-b line has been breaches; and on daily charts we see a "Three Black Soldiers" formation. This is proper bearish structure and can suggests a top in place. Plus, on weekly charts, the Insehas made an "Evening Star" candle pattern with surging Volumes.

The Fall from Jan 2008 Wave Count on IT Index:

The rise from Mart 2009 Lows Detailed wave Count:

Weekly Chart: If we look at Weekly chart, there is a Double Top structure, based on which one can be short on Index with Stop Loss of 6000 and target of 3900 (~50% of height from Mar 09 Low of 1992 to Jan 2010 high of 5923). The weekly charts suggest a medium term top in place.

Swing Commentary: Based on Swing Break status (employed by the Turtle Traders and promoted in india by KPL of vfmdirect.co.in). I have analyzed the weekly swing status of NSEIT and observed that the rally was so strong that the lowest low the stock ever maintained was 3 weeks. Meaning since the uptrend has started, the Index has not even fallen to breach the lowest low made in preceding low.
"3 Week Swing Status": The Rally in NSEIT has been so strong, that on weekly charts, the stock had given a Three Week Swing Buy on week ended 20th Mar 2009 at close of 2229.35 from where it has rallied to 5923. As of now, it has not given a sell on 3-Week Swing Basis, which stands at this week's low of 5599.30.

"2 Week Swing Status": Based on two weeks swing, the Index has given a Sell signal. Previously, the stock. Check Chart 3 for Swing Break on Weekly basis.

Future scenarios:
I would not be surprised if there is a short term bounce in place. As of now, if we donot bounce back, I think we have a top that can take the IT Index to at least 4200 mark. Under a bullish scenario, a one more blow off peak cannot be ruled out, targetting 6100 zone. however, i reckon the index has lost steam, and that will only be wave "e" of final "Z" Top.

Verdict: Short with SL of 6000. The stop loss is around 400 points up. So be careful there could be an bounce day and adequately position yourself. On the upside i think 6000 to 6200 is max zone.