Tuesday, October 02, 2012

Nifty Faces Resistance at 5726 & 5740

Dear All,

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Nifty facing a Resistance on 5726 & 5740. If breaks Support at 5690 then possible fall upto 5645 to fill the gap left.

Auto Sales - Golmaal

In both 2010-11 and 2011-12, the government appears to have been juggling export figures to paper over what looks more and more like an unexplained overinvoicing scam.

The story begins in October 2011, when three smart cookies at Kotak Securities smelt something fishy in the government’s export data for 2010-11. The three – Sanjeev Prasad, Sunita Baldawa and Amit Kumar – said: “Our study of exports data of major engineering companies (including automobiles and metals) shows that the increase in their exports does not reconcile with the steep increase in official exports data. In fact, the gap is quite substantial.”

According to them the official export data showed a 79 percent year-on-year export growth in 2010-11. Exports by engineering companies in the BSE 500 (the cream of India Inc) showed just 11 percent growth. In dollars, the engineering export jump accounts for $30 billion (up from $38 billion to $68 billion), while the figures for the BSE 500 showed a rise of just around $1.38 billion. (All approximate figures due to rupee-dollar conversion at fixed rates).

The government woke up in December 2011, and put it all down to a system crash in the commerce ministry and mistakes in data classification and data entry.

The then Commerce Secretary announced that exports in April-October 2011 had been overstated by $9.4 billion. The real goof-up was bigger, with engineering exports being overstated by $15 billion and a $12 billion underestimation in the case of petroleum and gems and jewellery exports, apart from other goofups.

Kotak also brings back the question of car exports. India, it seems, managed to export more cars for less in 2011-12: a six percent fall in earnings despite a 14 percent rise in the number of cars exported. This is, of course, possible if smaller cars are being exported (or discounted) as against larger ones before, but was that what happened?

According to the Kotak report, “exports of cars as per government data declined to Rs 18,200 crore in FY2012 from Rs 19,200 crore in FY2011 despite the number of exported cars as per Society of Indian Automobile Manufacturers (SIAM) rising to 5,07,318 from 4,44,326 in FY2011.”

The commerce ministry is tying itself up in knots over export data when there may be a simpler explanation at hand: overinvoicing by exporters in 2010-11. That would also mean some of the black money held abroad may have come back into India as export earnings – on partially fictitious exports.

Nothing less than an investigation by the Comptroller and Auditor General and the Central Bureau of Investigation will unravel the real truth behind these dubious numbers.


Tata Motors reported 3.82 percent decline in its total vehicle sales to 75,773 units in September.

Tata Motors had sold 78,783 units in the same month last year, Tata Motors said in a statement. The total passenger vehicle sales in the domestic market stood at 21,652 units in September, down 17.73 percent from 26,319 units in the same month last year.

The company’s exports decreased by 12.48 percent to 5,441 units last month from 6,217 units in the same month last year

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A Bullish Flag Like Pattern emerges on 5 mins chart shown above. But it seems that EW counts looks bearish as it has completed an correction upmove wave B and started wave C on the downside. If breaks the Trend Line and Channel (flag) then Tata Motor may try to fill the gap left on the bottom of the Chart.

Also we have discussed earlier that Tata Motors is forming a H&S on Daily Chart. A Break below 250 shall confirm that.