RBI's Credit Policy

The Reserve Bank of India has raised repo and reverse repo rates by 25 basis points each on March 17, 2011. The repo rate is 6.75%, reverse repo rate 5.75% and the CRR has been left unchanged at 6%.

 RBI's monetary policy review:

• GDP growth for 2010-2011 to be 8.6%.
• High commodity prices pose threat to GDP growth.
• IIP is weak, but other indicators like tax, exports, credit point to growth momentum.
• March 2011 whole sale price inflation expected at 8% vs earlier estimate of 7%.
• Increase in oil, fertilizer subsidies could put pressure on expenditure.
• Current Account Deficit (CAD) estimated to be lower, at 2.5% of GDP.
•  Focus on longer term capital inflows to sustain balance of payments.
• Non- food credit growth at 23%, estimate of 20% in Feb (YOY).
• Net liquidity injection through Liquidity Adjustment Facility down on higher govt spending.
• Till March 16: Rs. 68000cr Vs February: Rs. 79000cr Vs January: Rs. 93000cr.
• Temporary pressure on liquidity in second half of March due to advance tax payment.

Mr. Rajiv Kumar ( Director General, FICCI) said:

Below link shows industry experts views on 25 bps rate hike:

http://www.moneycontrol.com/video/economy/howindustry-experts-viewing25-bps-rate-hike_530149.html

Recommendation - ReneSola Ltd ( SOL)

Short term pick : Buy Renesola Ltd., (SOL) @ $ 8.95, Target $ 9.99, Stoploss $ 8.40

SOL with market cap of 777.6M is trading at the support level of 61.8% ( $8.90)  Fibonacci retracement level and corrected  more than 60% in past few days .Below daily chart shows gap down opening on 01st March 2011.
52 week high - $15.34
52 week low - $ 4.72

ReneSola Ltd. (ReneSola) is a manufacturer of solar wafers and producer of solar power products based in China. The Company possess a global network of suppliers and customers that include some of the global manufacturers of solar cells and modules.

Doji Candlestick Pattern

A doji represents an equilibrium between supply and demand, a tug of war that neither the bulls nor bears are winning. All dojis are marked by the fact that opening and closing prices are almost same . There are 4 types of doji.

• Common Doji:
• is sign of indecision or reversal in the market.
• is more significant in up-trending market than in downward moving market.

• Long Legged Doji:
•  has long upper and lower shadow.
• When close below the midpoint of the candle indicates weakness. 

•  Dragonfly Doji:
• occurs when price open at high and closes at high.
• looks like "T" with long lower shadow and no upper shadow.
• indicates that the sellers drove the prices lower, however at the end of session buyers pushed the prices back to the opening level and formed the shape of "T".

•  Gravestone Doji:
• is bearish reversal pattern that mainly occurs in the top of uptrend.
• occurs when open and close near to the bottom of the trading session ( day's low price).

Above patterns are useful in technical analysis, however other indicators such as RSI, Stochastics should be consider while trading.

Apple INC - Target Acheived

Call posted on 23rd Feb 2011- Target acheived of APPL $359.90

short term pick-- buy Apple (APPL) @ 341.05 Stoploss 330.90Target 359.90

Above is daily chart of Apple Inc. Target of $ 359.90 acheived in 8 trading session.

Dark Cloud & Piercing Line Candlestick

Dark Cloud Candlestick:

• is reversal pattern followed by uptrend.
• Stock opens with gap up and closes below the midpoint of previous bullish candle.
• Must have closing price within the price range of the previous day.

 

Piercing line candlestick:

• is opposite to Dark cloud
• is followed by downtrend and is bullish pattern.
• Stocks opens with gap down and closes above the midpoint of previous bearish candle.
• Must have the closing price within the price range of the previous day.

 These patterns are mostly found in daily and weekly charts and are strong candlestick patterns.

Recommendation - APPLE INC.

Short term pick - Buy Apple Inc (APPL) @ $341.50, Target $359.90, Stop-loss $330.90

Apple Inc (APPL) is trading in higher top and higher bottom and formed the channel on daily chart. Below chart shows APPLE Inc is trading at the support level with huge volumes.

 Apple Inc. (Apple) with market cap of 315.6B, designs, manufactures and markets a range of personal computers, mobile communication and media devices, and portable digital music players, and sells a range of related software, services, peripherals, networking solutions, and third-party digital content and applications. It's products and services include Macintosh (Mac) computers, iPhone, iPad, iPod, Apple TV.

Call posted yesterday on twitter @snehalbrid

Marubozu Candlestick Pattern

Marubozu Candlestick: It indicates that the stock has traded in one direction throughout the trading session and closed at the day's high or low price.This candlestick pattern gives strong bull and bear signal.

• Bullish Marubozu Candlestick:
• It is formed when open - low and close - high are equal with huge volumes.
• The buyers control the price of stock from opening to closing session.

• Bearish Marubozu Candlestick:
• It is formed when close - low and open - high are equal with huge volumes.
• The sellers control the price of stock from opening to closing session.

Above charts shows that whenever Marubozu candlestick is formed ( Bullish or bearish) there is sharp rise or fall in the price. Hence it is a strong candlestick pattern and can be use in technical analysis.