SATYAM turns NIFTY to Southward

After rallying almost 31 per cent from the October lows, Indian markets saw the biggest drop as National Stock Exchange's 50-share Nifty plunged 6.18 per cent to end at 2920.40 and BSE Sensex tumbled 7.25 per cent to end below the 10,000 mark.

The Technical Indications in the daily EOD charts of SENSEX and NIFTY, both have breached and closed below their closing support line coming from the closing lows of November 2008. Slow stotch having topped out, has started to turn down from the upper zone & most likely will enter the lower zone next week. RSI has gone below the level of the 50 and another day of fall can bring it below the critical level of 45 to give clear bearish signal for further falls. Inability of indices to decisively close above the Fibonacci moving average of 55 EMS followed by clear breach of 21 days EMS on Wednesday, weakens the indices further to see new lower levels in coming days. However since the fall was about 7% induced by big fall in SATYAM & Index heavy Reliance, there could be a pause on Friday to give bears some rest before another onslaught next week.

On options front, call writing was observed from Nifty 3000 to 3200 levels while enormous put buying was seen at 2900 strike. Traders also unwound written puts at 2800 strike fearing more downside for the market. However, put writing at 2700 strike may act as a good support.

Discipline RISK managment:

Risk management is the difference between a successful trader and a sucker.

1. Put stop loss to protect money.

2. Put trial stops to protect profits.

3. This kind of things can happen any day, discipline yourself not to avoid stops.

4. A traders job is not to trade, BUT TRADE WELL.

Satyam's Auditing Firm "Price Waterhouse":

Traders and investors may boldly liquidate not only satyma stocks but also other tech stocks which were audited by Price Waterhouse, that fraudulently audited Satyam accounts. Generally this type of audit firms are highly sought after by fradulantent companies to boost the share holding value of the owners as well as highly placed insiders. Be sure more and more disclosures are likely to surface in coming days after the cooked up quarterly results of those firms.DURING JAN 09.
Price Waterhouse’s clients include big names, such as Maruti Suzuki, United Breweries, United Spirits, GMR Infra, Glenmark Pharma, Piramal Healthcare, among others.