What happened last week?
Nifty has put a bottom in place at 200-week moving average. I did mention about this Ultimate support in my Feb 14 2016 post and also on twitter timeline.
In case you missed it - Nifty is right now standing at the ULTIMATE support level https://t.co/ye533VhNMN
— Deepak Singh (@smarket) February 15, 2016
This is Nifty weekly chart
As you can see in the chart above: Nifty now has kind of triple bottom support at 200-week moving average and this support has been there since 2012.
The big change this time: Participation of PSU Banking stocks in the rally on the hope that recapitalization problems can be solved by unlocking hidden assets on PSU Books like real estate.
With just one simple rule change - Govt has solved the recapitalization problem of banks without spending a penny....that's what is required
— Deepak Singh (@smarket) March 1, 2016
Now institutions will start looking at PSU Banking stocks once again and considering the extent of under ownership these stocks have - one can expect a huge surge in these stocks. Stocks like SBI have very interesting charts...with downside support at 145
It's not only SBI but other PSU Bank stocks be it Bank of Baroda, PNB, Union Bank and Canara Bank have seen major comeback
Theme: Normalization process of oversold stocks
Many stocks saw huge panic sell off in Jan Feb for no major fault of theirs and now many of these stocks are making a comeback. Just see the chart of Just Dial
One stock with good structure: Praj Ind
Praj Ind stock made a huge jump in May 2015 but since then stock has not done much but the good news - stock has built a sound bullish structure and in a good market environment - can make huge move. It is one stock to keep an eye on in this move
Here's one stock in strong Bull market with no major pullbacks this year: Vakrangee
Vakrangee Software has seen unprecedented bullishness despite market chaos in Jan and Feb. Something is cooking on this counter
The other theme playing in pretty bullish manner consistently: Sugar
Why everybody is talking about Sugar today? https://t.co/GMUxr6dlPP
— Deepak Singh (@smarket) February 24, 2016
Here's Renuka Sugar Chart
The other big thing that happened last week: Sharp appreciation in INR
Fundamentally, INR cannot appreciate further but with too much bearish pressure on USD, one cannot rule out appreciation back to 200 dma which is 65.8.
The world is turning Bullish on India again.
1. Text book Analysis at work
2. What is Gold Chart trying to tell us?
3. This is one stock I like the most in current market environment
4. Which is the best performing market in Asia in 2016?
5. The story from Last Budget to this Budget
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers