Expect range-bound activity. It will be prudent to play stock specific moves and keep a strict stop loss below 4,900 points on longs
S&P Nifty close: 5,084.25
SHORT term: Down MEDIUM term: Down LONG term: Sideways
The Nifty opened lower and declined further, but held above the 61.8% correction (4,891) level of the recent rise from 4,720-5,169 points. A "double bottom" formation in the hourly charts around the 4,900 levels saw buying at lower levels and short covering once the Nifty crossed 5,030 points (giving a target of 5,149 points), then gained sharply to hit a high of 5,143.60 points. Volatility was high as the Nifty corrected after the RBI's credit policy review announcements and the Nifty ended with a marginal gain of 25 points (+0.49%). Volumes were lower as the Nifty traded sideways. The sectoral indices that led the advance were BSE IT (+3.06%), BSE Oil & Gas (+1.51%), BSE Reality (+1.44%), BSE Teck (+1.30%) and BSE PSU (+1.26%), while the ones which underperformed were BSE CGS (-3.11%), BSE CDS (-1.62%) and BSE FCMG (-0.68%).
The histogram MACD continues to be below the median line, implying that the medium-term trend is firmly down and what we are witnessing in a corrective rise. As we mentioned last week, the Nifty remained in a consolidation phase, during which it tested the support of 4,891 (61.8% correction of 4,720-5,169) and subsequently rallied to come very close the R1 level of the week, which was 5,171 points.
Here are some key levels to watch out for this week.
The bulls have succeeded in putting a foot in the door of the bear juggernaut, but they will have to ensure that the 4,850-4,900 area holds in any corrections from here on. The support levels are as follows:
1. The Fibonacci retracement levels of the recent rise from 4,720-5,169 points are 4,944 (50%) and 4,891 (61.8%). These should act as supports in dips.
2. Resistance in any further rise will be provided by the "gap area" between 5,229-5,323 points.
3. Only a close of the above mentioned "gap area" could lead the foundation of a retracement of the entire fall from 6,338-4,720 points, though no confirmation is available as yet despite the last few weeks of recovery.
4. If the Nifty holds above 5,027 (50% retracement of 4,911-5,143 points) and 4,999 (61.8% retracement of 4,911-5,143 points it will be a signal of some strength.
The bulls have to continue to defend the 4,900 points mark. We expect further range-bound activity and in a highly optimistic scenario filling of the gap area between 5,229 points and 5,323 points, provided the above mentioned crucial supports hold.
Volatility is likely to be a bit subdued this week and may jump up once again in the week of the F&O settlement expiry. It will be prudent to play stock specific moves till then and keep a strict stop loss below 4,900 points on longs.
Keep a strict watch on the last day's high/low (5,144/5,068) for a small and swift move of around 76 points in the direction of the break. Preferably, the Nifty has to close above/below these levels for this to happen and it is useful only for very short-term traders.
(Vidur Pendharkar is a consultant technical analyst and chief strategist at www.trend4casting.com.)
Customer complaints about delays and defective products pile up against online group buying sites such as SoSasta and SnapDeal, but these are simply ignored
It wasn't long ago that group buying and discount cards promised to become the next big thing to happen to the Indian consumer.
Almost everybody who was in business, be they banks, mobile phone and credit card companies, travel sites and online retailers, all felt obliged to ply consmers with third-party discount coupons in order to retain loyalty.
Then there were group buyers whose business model was to nudge customers to those products and services that offered hefty discounts. From SoSasta (of Groupon) to Jasper/ Moneysaverprime/Snapdeal (all part of a single business group) and mydala (funded by naukri.com), Dealface (promoted by consumer review site MouthShut.com and the global Groupon- the choice list was long.
All of them were funded by private equity players and venture capitalists, which meant that revenue and profit was never a concern; the name of the game was customer acquisition. Today, the price of a book purchased through these online stores is usually less than the cost of the fancy packaging and courier charges!
However, hardly has the business begun to stabilise and the complaints are seeping through the cracks. Moneylife wrote recently that the issues with SoSasta have become more of a buzz in cyberspace than the deals it is offering. Till three months ago, Jasper was working overtime to woo corporate customers with bulk deals on its MoneySaver card. But now we hear from the company that it is "no longer issuing new MoneySaver cards". The group has also stopped offering coupons and has widened its scope beyond the e-commerce site www.snapdeal.com that offers the biggest deals on spas, salons and restaurants.
Experts argue that the business model of group buying sites is unsustainable and they criticise the poor consumer redressal mechanism. Moneylife's experience with SoSasta is proof of the extent of the callousness of the company to customer complaints about delay in receiving products or about defective products. (Read, 'SoSasta customers complain about delivery delays, defective products; company ignores complaints'.)
While writing the report, we emailed the company on 12th September for its response on the complaints. Two days later, we received an automated reply from one Kavita who said that the "complaint had been forwarded to the concerned department". Clearly, the email wasn't even read and no attempt was made to separate a complaint from a media query.
A couple of days later, we received another email from SoSasta. This one assumed that our "complaint" was redressed and said, "We'd love to hear what you think of our customer service." It also asked us to "rate the support you received : Good, I'm satisfied, or Bad, I'm unsatisfied". We think the customer service falls into another category altogether - bizarre!
SoSasta is backed by Groupon, the world's largest online group buying business, that was recently involved in a controversy after it admitted that its entire database was 'accidentally' leaked over the Internet and indexed by Google. (Read, 'Groupon's SoSasta.com leaks entire database from India'.)
Group buying and discount cards exist around the world and it could well be that the business in India is facing teething troubles and will stabilise. But until it does, customers must learn to treat the offerings like a lottery-if the offer works it is money saved. Otherwise, wait for the next one that comes along. It doesn't really matter so long as you don't make the mistake of forking out an annual fee for a standalone service that may not be standing anymore!
Order says issues raised by petitioner have failed and are therefore not entitled to any reliefs
The Company Law Board (CLB) has dismissed a petition by JC Mansukhani, former vice-chairman and managing director of Man Industries (India) against the company and his brother and chairman RC Mansukhani alleging mismanagement and oppression, siphoning off company funds and pleading for reliefs.
The dispute which has been dragging on for some months was precipitated further in May this year, when the company board led by Ramesh Chandra Mansukhani, withdrew the powers of his younger brother Jagdish Chandra Mansukhani. JC Mansukhani retaliated by complaining to police, alleging misappropriation and diversion of funds.
He alleged that the board meeting that took the decision to withdraw his powers was called at short notice and without any agenda and that he stayed away from the meeting as his queries were rejected. JC Mansukhani said the action taken by the company against him made him suspect that there may have been irregularities.
In an order on Monday, the CLB ruled that JC Mansukhani was not entitled for any relief as the company was not a glorified partnership. It said that the petitioners “cannot allege that they are a minority group and the contention of the petitioners that the company is a glorified partnership and a family-run company cannot be accepted”.
The CLB also dismissed the allegations of siphoning off funds, terming the allegations as baseless. “Since all issues are answered against the petitioners, the petitioners are not entitled to any reliefs as prayed for. The petition is miserably failed and liable to be dismissed,” the CLB said in its order.
The brothers are co-promoters of the Rs1,800 crore Man Industries, which manufacturers pipes, and caters to the oil & gas sector and public sector corporations. The differences have persisted for some time now, but various efforts to mediate have failed.
In May, RC Mansukhani was quoted by a newspaper as saying that the board had decided to withdraw the powers enjoyed by his brother due to several acts committed by him which went against the company. He admitted the ownership issues were being discussed for over two years, but since his brother had decided to take the matter the full distance, “there is no way we can work together now”.