This is a Special Edition of Discover Kapital: Nifty PLUS Opportunity Newsletter which talks about the state of the

Indian Equities at the arrival of 2012. With the most important economic event Union Budget 2012 for the country just few weeks away, we would like express our views for an informed decision making on trading & investments. The dawn of 2012 has been pleasant for all market participants across the board. However, the magnitude & extent of the rise has left more questions than answers. Markets are & would continue to be the greatest puzzle for the mankind but with a rational approach, things could be simplified & it turns easier to understand.

Even an ardent Indian bull market believer would not have imagined the performance of the Indian Equities over the past two months. Upon screening we found out the ace factor which resulted in such a meteoric rise in benchmark indices: Liquidity. However, the Source of this liquidity is diverse, comprising of both national & international origin. Firstly, the most preemptive central bank in Asia, RBI announced a CRR cut of 50 basis points, hinting towards end of monetary tightening & peak of interest rate cycle. Secondly, the surprise comeback of INR after being battered down in the past two quarters on account of revised flow in the emerging markets as reflected in the USDINR chart. Markets are inherently cyclical in nature. The vicious cycle of outperformance & underperformance is valid on each underlying across all segments & markets. In order to refresh memories, the correction in the Indian equities started in Jan 11 & after completing a cycle of 12 months charts are pointing towards the return of strength.

For A Machine, The Market Is Always Right, Without Exception! Sunday, 26 February 2012 Contact Info: info@discoverkapital.com Cell No: 9810341389/9008806734

S&P DEFTY Benchmark Index Outlook for Intermediate Time Frame (3-6 Months): Outperform Bullish for upcoming twelve months. 5835/6010/6230

Cyclical Duration: Key Market Levels

Whats Next to be Expected? Culmination of Buy Signal & Performance Cycle: Buy Signal: Bases on our proprietary indicators, after an interval of twelve months, we have a Buy Signal on the S&P Defty Monthly chart. This enables us to contest for further upside in the markets & actively looking for pockets of strength. Aggressive shorting is no more the flavour & constitutes the lowest level of our priority list.

Performance Cycle: Taking into account the cyclical nature of markets & underlyings, the Performance cycle for the Indian equities represented by S&P Defty is returning towards the positive territory. We believe that markets will find a reason to rise irrespective of the multiplicity & complexity of news & events across the world. With a possible confirmation of the Performance Cycle on the intermediate time frame, we expect outperformance of Indian Equities to continue for the next 12-18 months cycle. What's better than paying less for something and saving cash? Conversely, what's as frustrating as waiting around for a sale that never comes? For A Machine, The Market Is Always Right, Without Exception! Sunday, 26 February 2012 Contact Info: info@discoverkapital.com Cell No: 9810341389/9008806734

The USDINR & Indian Equities Correlation:

Currency of a country represents the strength of its economy, belief of investors & health of the corporate structure. The INR suffered a blow as investors flee for safety towards the US greenback on account of poor management of domestic finances & overall grim economic outlook due to liquidity tightening by RBI. Inflationary concerns were present, Risk aversion by the Institutional investors lead to INR shredding its purchasing power. The USDINR pair has a technical inverse relation with the Indian equities for the above mentioned reason. Conducive economic & business climate attracts funds & enhances liquidity, resulting in compounded corporate profits & bullish equities. USDINR Currency Pair Outlook for Intermediate Time Frame (3-6 Months): Underperform

Cyclical Duration:

Bearish for upcoming ten months.

Key Market Levels

47.20/45.35/43.10

For A Machine, The Market Is Always Right, Without Exception! Sunday, 26 February 2012 Contact Info: info@discoverkapital.com Cell No: 9810341389/9008806734

Whats Next to be Expected? Culmination of Buy Signal & Performance Cycle: Sell Signal: Bases on our proprietary indicators, after an interval of six months, we have a Sell Signal on the USDINR currency pair. This would further attract foreign funds through different investment vehicles, lowering the Cost of Borrowing & hence better corporate profits.

Performance Cycle: Taking into account the cyclical nature of markets & underlying, the Performance cycle for the USDINR pair re-entering in the negative territory. This would catalyse further downside on intermediate time frame & logical domino effect would result in continued outperformance Indian equities for the aforesaid period.

For A Machine, The Market Is Always Right, Without Exception! Sunday, 26 February 2012 Contact Info: info@discoverkapital.com Cell No: 9810341389/9008806734

Markets are extremely iterative in nature. There is nothing called This time its different, however its the human nature which make participation into the market interesting. This newsletter is just for informational position as trading & investment requires deeper analysis of data with the discipline always in place. We follow our Proprietary Indicators & System religiously while trading in Nifty Benchmark, BlueChip based derivative products & Mid- Cap scrips. For more information regarding our approach, products & offerings, feel free to contact us at info@discoverkapital.com Or visit us at www.discoverkapital.com. For a Comparative Performance of Discover Kapital: Nifty PLUS Newsletters, browse previous editions. ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------About Us: Discover Kapital is a long term bullish story which believes in constant innovation, integrity & objectivity of the research. We stretch the resources to the limits to gain the slightest edge over the numerous other research participants. Discover Kapital believes in the long term relationship with its esteemed members. We feel that the quality of clients is instrumental in determining the quality of the offerings. We are proud to be associated with our clientele & feel honoured to feel their confidence bestowed upon us. We strongly believe that the key to success in the markets lies in niche research, distinct approach & strict disciple. We never shy away from cutting a losing trade & have developed a system to keep emotions at bay. We are confident that we will make money & thus have eliminated even the slightest involvement of any manual intervention in the research. The whole concept of Exceptional Analysis depends upon the fact that markets are driven by emotions & those who have integrated the Emotional Coefficient into the research framework are bound to stand as winners. For Any Enquiry, Please find the following Contact Info: Research Query: akash@discoverkapital.com Personalized Services: info@discoverkapital.com Or Call Us:: Mr. Akash Singh @ 9810341389 For A Machine, The Market Is Always Right, Without Exception! Sunday, 26 February 2012 Contact Info: info@discoverkapital.com Cell No: 9810341389/9008806734

Disclaimer: The views expressed are based purely on Technical studies. The calls made herein are for information purpose only. The information and views presented here are prepared by Discover Kapital and its associates. The information contained herein is based on their analysis of the Charts and up on sources that are considered reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended on this Website may not be suitable for all investors. Past performance may not be indicative of future performance. Some of the securities/commodities presented herein should be considered speculative with a high degree of volatility and risk. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. You specifically agree to consult with a registered investment advisor, which we are not, prior to making any trading decision of any kind. While acting upon any information or analysis mentioned on this website, investors may please note that neither Discover Kapital nor any person connected with him accepts any liability arising from the use of this information and views mentioned herein. Discover Kapital and his affiliates may hold long or short positions in the securities/commodities discussed herein from time to time The services are intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities/commodities, or any options, futures or other derivatives related to such securities/commodities. You agree that if you do repeat or re-post any of Discoverkapital.com calls by any mean, you will be liable for actual and punitive damages as determined by Discoverkapital.com and additional damages to be determined by a Indian court of Law. You acknowledge that the information provided through Discoverkapital.com is compiled from sources, which are beyond the control of Discoverkapital.com. Though such information is recognized by the parties to be generally reliable, the parties acknowledge that inaccuracies may occur and Discoverkapital.com does not warrant the accuracy or suitability of the information. For this reason, as well as the possibility of human and mechanical errors and other factors, you acknowledge that Discoverkapital.com is provided to you on an "as is, with all faults" basis. Discoverkapital.com expressly disclaims any and all warranties, whether express, oral, implied, statutory or otherwise, of any kind to the users and/or any third party, including any implied warranties of accuracy, timeliness, completeness, merchantability and fitness for a particular purpose, as well as any warranties arising by virtue of custom of trade or course of dealing and any implied warranties of title or noninfringement. In addition, Discoverkapital.com, in providing the information makes no endorsement of any particular security, market participant, or brokerage. Further, Discoverkapital.com does not represent or warrant that it will meet your requirements or is suitable for your needs.

For A Machine, The Market Is Always Right, Without Exception! Sunday, 26 February 2012 Contact Info: info@discoverkapital.com Cell No: 9810341389/9008806734