Techcheck Daily

Emkay Global Financial Services Ltd.

Dharmesh Patel Technical Analyst +91 22 6612 1242 dharmesh.patel@emkayglobal.com 1 Feb 2012 1

Techcheck Daily

Key take away

Nifty 5 day AD Line: Weve been quite positive on the Indian outlook for some weeks now. But a glance at the 5-day breadth oscillator for the broader Nifty index is not giving encouraging signals. This indicator shows a bearish divergence. So, we think it is best to move to neutral stance on the Indian equity market as a corrective decline (a contra trend move) to 4979 and below that to 4905 is likely in coming days Nifty At 200-DSMA: The index is still under the radar of 200-DSMA with 14-day RSI in the overbought zone. So the ball is in the court of the bears and a short term pull back upto 4979 and below that upto 4905 (which are 38.2% and 50% retracement levels), cannot be ruled out S&P 500 Momentum rolls over: The daily momentum for S&P 500 has rolled over, which indicates that a short term correction is on the cards. Expect initial fall upto 1283-mark, which is the 38.2% retracement level. If prices fail to find support around 1283-mark, then the next level in the array is 1267-mark, which is 50% retracement level CBOE VIX Momentum turns bullish: Its the MACD of CBOE VIX that we would like to stress on. Right now it has turned bullish after a stark positive divergence. In such a scenario probability of a short term correction in equity markets is quite high Gold Break above the falling trendline: The gold prices have given a break above the falling trendline and a vital move back above the 200-DSMA. Also the short term KST has turned bullish, indicating upsides upto 1800mark in the near future

Techcheck Daily

1 Feb 2012

Nifty: 5-day AD Line

22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 11 11 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 11 11 22 22 11 11 22 22 22 22 22 22 * S& CN NIFTY ( , P X 2 2, 2.2 2 2 , 2 2 2 22 )2 2 .2 2 2 2, 2.2 , 2.2 + . 2 2 , , 2 , 2 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22

Nifty Daily

NS AD (- 2 2, -22 2, -22 2- 2. 2 , 2 2 2 2 E . 2 2 22 2 22 , 2 2 2- 2. 2 )2 . . 22 22 22 2 2 -2 2 2 -2 2 2 2 -1 1 1 1 February M arch April M ay June July August S eptem ber O ctober N ovem ber Decem ber 22 22 February

2 -day AD Line

22 22 22 2 2 -2 2 2 -2 2 2 2 -2 2 2 2

22 22

Weve been quite positive on the Indian outlook for some weeks now. But a glance at the 5-day breadth oscillator for the broader Nifty index is not giving encouraging signals. This indicator shows a bearish divergence. So, we think it is best to move to neutral stance on the Indian equity market as a corrective decline (a contra trend move) to 4979 and below that to 4905 is likely in coming days. Techcheck Daily
1 Feb 2012 3

Nifty: At 200-DSMA
Relative Strength Index22. ( 2222 ) 2 2 2 2

22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 11 11 22 22 22 22 22 22 11 11 11 11 11 11 11 11 22 22 September November 22 22

- NSE22 [NIFTY] (2222 2 , , .2 , 2222 2 , .2 , 22222 , .2 , 22222+22222 .2 , .2 )

22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22

February

April

May

June

July

August September

November

22 22

February

The index is still under the radar of 200-DSMA with 14-day RSI in the overbought zone. So the ball is in the court of the bears and a short term pull back upto 4979 and below that upto 4905 (which are 38.2% and 50% retracement levels), cannot be ruled out. Techcheck Daily
1 Feb 2012 4

S&P 500: Momentum rolls over

2 2 2 2 2 -22 -22 -22 -22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 2 March 2 2 1 2 2 2 1 2 2 2 2 1 2 2 1 April May 1 1 2 2 1 1 2 June 2 1 2 2 2 2 2 2 2 2 1 2 2 2 2 July August 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 September October November 2 2 2 2 2 2 2 2 2 December 22 22 2 2 2 2 2 2 2 2 2 February MACD ( 22 . 2222 ) 2 2 2 2 2 -22 -22 -22 -22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22

S&P 222 INDEX ( 22222 , , . 2 , 22222 , . 2 , 22222 , . 2 , 22222222222 .2 , - . )

22 . % 2. % 22 1. % 11 2. % 22 1. % 11

2 22 2. %

2 22 2. %

22 22 22 22 22 22 22 22 22 22 22 22 22 22

The daily momentum for S&P 500 has rolled over, which indicates that a short term correction is on the cards. Expect initial fall upto 1283-mark, which is the 38.2% retracement level. If prices fail to find support around 1283-mark, then the next level in the array is 1267-mark, which is 50% retracement level. Techcheck Daily
1 Feb 2012 5

CBOE VIX: Momentum turns bullish

CBOE VOLATILITY INDEX ( . 1 1 .1 1 1 1 1 .1 1+ .1 1 )1 1 1 1 1 1 .1 1 1 1 1 , 1, 1, 1 , 1 11 1 1 2 2 2 2

2 2

2 2

2 2

2 2

2 2

2 2

MACD (- . 2 2 2 2 2) 2

2 2 2 2 2 2 -2 -2 22 Feb 22 Mar Apr May Jun Jul Aug Sep Oct Nov Dec 22 Feb 22 Mar

Jun

Jul

Aug

Sep

Oct

Nov

Dec

22 Feb 22

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Now we see the VIX and its MACD. Its the MACD that we would like to stress on. Right now it has turned bullish after a stark positive divergence. In such a scenario probability of a short term correction in equity markets is quite high. Techcheck Daily
1 Feb 2012 6

Gold: Break above the falling trendline

GOLD [CASH] ( 2 . 22 2222 2222 2222 2 , 222 2 . 2 2 . 2 2 . 2 + . 22222 , , , , , , , ) 22 22 11 11 22 22 11 11 22 22 22 22 22 22 11 11 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22

22 22

22 22

22 22

22 22

22 22

22 22

Short KST Simple Moving Average ( 22 2 2 2 2 -22 -222 February March April May June July August

22 ) . 2222 22 2 2 2 2 -22 -222

September

October

November

December

22 22

February

The gold prices have given a break above the falling trendline and a vital move back above the 200-DSMA. Also the short term KST has turned bullish, indicating upsides upto 1800-mark in the near future. Techcheck Daily
1 Feb 2012 7

Recommendations:
Trading Calls
Date Stocks Action Buy Buy Reco. Price 11 1 11 1 Stop-loss 11 1 22 2 Target 11 1 22 2 Current price 11 1 22 2 % change Com m ent 2 . 22 22 . 2 LIC Hsg Fin 2 . 22 22 . 2 Tata steel

22 % . 2 11 % . 1

Techcheck Daily

1 Feb 2012

DISCLAIMER: Emkay Global Financial Services Limited and its affiliates are a full-service, brokerage, investment banking, investment management, and financing group. We along with our affiliates are participants in virtually all securities trading markets in India. Our research professionals provide important input into our investment banking and other business selection processes. Investors may assume that Emkay Global Financial Services Limited and/or its affiliates may seek investment banking or other business from the company or companies that are the subject of this material and that the research professionals who were involved in preparing this material may participate in the solicitation of such business. Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest. Additionally, other important information regarding our relationships with the company or companies that are the subject of this material is provided herein. This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject Emkay Global Financial Limited or its group companies to any registration or licensing requirement within such jurisdiction. Specifically, this document does not constitute an offer to or solicitation to any U.S. person for the purchase or sale of any financial instrument or as an official confirmation of any transaction to any U.S. person unless otherwise stated, this message should not be construed as official confirmation of any transaction. No part of this document may be distributed in Canada or used by private customers in United Kingdom. All material presented in this report, unless specifically indicated otherwise, is under copyright to Emkay. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of Emkay. All trademarks, service marks and logos used in this report are trademarks or registered trademarks of Emkay or its Group Companies. The information contained herein is not intended for publication or distribution or circulation in any manner whatsoever and any unauthorized reading, dissemination, distribution or copying of this communication is prohibited unless otherwise expressly authorized. Please ensure that you have read Risk Disclosure Document for Capital Market and Derivatives Segments as prescribed by Securities and Exchange Board of India before investing in Indian Securities Market. In so far as this report includes current or historic information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed. Emkay Global Financial Services Ltd. 7th Floor, The Ruby, Senapati Bapat Marg, Dadar (W), Mumbai 400 028. India. Tel no. 6612 1212. Fax: 6612 1299

Techcheck Daily

1 Feb 2012