Unlucky 13 but Lucky for some

At 1 pm on 23rd Nov we have exited all our short and now we have zero position in Indian Market.

J2K has always vested in learn n earn method by continuously reminding of how traders get trapped and smart investors make money.

RBI made a precarious statement of halt in interest rate hike after 13 rate hikes in a row .... OCT 2011 we witnessed the biggest rally in US market and what next .....in the month of NOV 2011 we witness a fall of approx 13.13% in nifty from monthly high of 5360.3 to monthly low of 4654.7.

Ask this question ..when US market are gaining so much ..why will FII stay in India ...so was this a crafted strategy to make ourself cheapest growing economy so that FII find it much more attractive to invest in India..ad may be then you will understand why our currency also depreciated so much.

We one day to go and the penultimate day of the EXPIRY ...will this monthly low of 4654 ...hold out ...is this what we were talking about one expiry below 4800 is eminent.

Subscribers enjoy the full report.

Regards,

J2K

Nifty Futures for Monday 14 Nov 2011

Mostly Nifty Traders (Almost 85-90%) end up in losses and this lost amount is transferred to other 10% who make profit. So, you can imagine, the market is not generating any new money, its the money lost by 90% investor that gets distributed to those 10% winning traders. Stock market is just facilitating the transfer of money from indiscipline speculators to disciplined and systematic traders. This is the only reason, why you will find most of the traders/ investors (90%) always complaining about the market and their losses. It is up to you now think and decide which side you want to be.

Technical view for Nifty Fut on Monday:
No trade between 5221 to 5188 (to avoid Traps)
Buy Above 5221 for tgt of 5242 - 5266 - 5288 - 5311
Sell below 5188 for tgt of 5168 - 5151 - 5127 - 5098

For Free Trial please email us at j2k_matrix@yahoo.com

Nifty Futures for Friday 11-11-11

11-11-11 that to on a Friday ...yup its 11th of November 2011 and the time to watch out is 11:11am/pm (to be precise 11 sec as well) history in making ...such an opportunity comes only once a millennium ....enjoy the moment.

Back to business; we have the most important IIP data, weekly closing & top of it global weakness It A Ly

Lets just re-vist 1st Nov 2011 (1-11-11) when Greek PM announced referendum and immediately next day J2K gave following views:

Technical view on Nifty Futures for 2/11/2011:
No trade between 5235 and 5268(to avoid whipsaws)
Buy above 5268 with SL of 5256 for targets of 5294-5312-5331-5349Sell below 5235 with SL of 5260 for targets of 5222-5204-5186-5168

Guess what....the range was test for 10 days and we are back to the same point....it's all magic trading.

We have to adapted to our surrounding and the need of the hour demands a good swing trader and cherry picking style of investments.

Subscribers stay tuned for in-depth analysis.

Regards

The new begining 11-11-11        



Nifty Futures for Wednesday 9th Nov 2011

First Greek now Italy... I mean one decade we talked about African nations, then for one decade we dragged the 9/11 issues of U.S. and now one decade for EURO Problem ....Just pause for a second and think.... what's next - ASIA !!!!

Today Nifty will open flat or gap up and may stay that way through out the session.

Technical View on Nifty Fut for 9/11/11

No Trade between 5301 and 5327 (to avoid traps)

Buy Nifty Fut above 5327 with SL of 5311 for targets of 5349-5388-5404-5451

Sell Nifty Fut below 5301 with SL of 5316 for targets of 5281-5266-5248-5222

Nifty Futures for Tuesday 8th Nov 2011

The global trends will continue to dictate Indian markets.  Possibility of gap down opening is high and the rest of the day could be highly volatile.

Technical view on Nifty Futures for 8/11/2011:

No trade between 5312 and 5288 (to avoid traps)
Buy above 5312 with SL of 5294 for targets of 5331-5349-5404
Sell below 5288 with SL of 5301 for targets of 5264-5222-5190-5151

Nifty Futures for Wednesday 2nd Nov 2011

Greeks referendum plan can be termed a modern "blackmail".

The global events could take its toll on indian markets as well. But this is the time we need to step up and like US make sure that our markets emerges as a winner. For that we need retail participation and less of PANIC (mad selling). 

Hence we all make efforts to provide free consultancy and insides to our market so that people dont get panic.

Technical view on Nifty for 2/11/2011:
No trade between 5235 and 5268(to avoid whipsaws)
Buy above 5268 with SL of 5256 for targets of 5294-5312-5331-5349
Sell below 5235 with SL of 5260 for targets of 5222-5204-5186-5168

    

The future of our economy lies on how we handle this global economy hence market could slip to 4700 again or revive till 5600 as well. Just wait and watch

Nifty Futures for Tuesday 1st Nov 2011

Today's session will be full of suspense....and a welcome surprise towards the end (Nifty may close neutral or positive)

Now the most important thing for retail investors is that many midcap stocks are bitten down to penny stock level which can give very high returns in quick time. Smart money should now be all out to buy selected stock in the midcap space. Today Essar ports and LML were the just one of these examples.

Now watch Dolphin Offshore tomorrow as our operator sources indicated some huge buy orders for the stocks. So diwali bumper offer still continues....watch fireworks tomorrow. Buy Dolphin Offshore @ cmp 108 SL of 103 for target of 128++


Nifty Futures for 01/11/11No trade between 5337 and 5355 (to avoid trap)
Buy above 5355 with SL of 5338 for targets of 5384-5401-5422-5451
Sell below 5337 with SL of 5348 for targets of 5301-5282-5251-5222


Out Performers for today
----------------------------------
IT, Auto, Pharma, Infra, Large Caps FMCG

Under performers for today
------------------------------------
PSU and some sort of consolidation in MID-CAPS

Improve Trading Sucess in Formula1 Style

India will be hosting its first ever Formula One (F1) today on sunday at 2:45pm

We wish Force India all the luck...

But for all the investors out there ... F1 is the best sports to learn trading success; like all the F1 team ...traders have got to realize that it’s not the end of the world if you lose one game or more..You should get down to basics and play every point on its merit. The moment you sit down to differentiate the first point from the last, emotions take over.

As F1 teaches us Focus is defined by the three “c”s, Courage, Composure and Consistency. When you need to prepare, there should be no distractions whatsoever. This is not a hobby, this is no child’s play or video game, it is business.

Like F1 has lot of drama and tense moments ... positions changing ever lap/pit stops. Our Stock Market will also give huge movements and the one who has a method, discipline to adhere to that winning strategy will come out as winner. Unlike F1 where we have only few winners our market gives everyone an equal chance to be a winner .... the bottom line is DO YOU HAVE WHAT IT TAKES TO BE A WINNER!!!! >>>

For e.g: We have made an attempt to identify the WINNER of today's Indian Grand Prix (30th Oct 20 11 @ 3pm IST)  based on assumptions of Fundamental and Technical study applied to Formula1 Grand Prix with Present Driver Standings as main Indicator:

F1 driver Sebastian Vettel (Red Bull) could be the potential WINNER ; if he manages to take a lead of 0.02sec in the first lap itself; as he would be a hard man to catch later on; as expert suggest that "DRS can be activated only if the distance between 2 cars is less than 0.01 sec". Thus technically; S.Vettel could lead the F1  from start to finish as no one would be able to catch him... Lets Find out!!! if he has the 3 c's.

Nifty Futures for Frtiday 28 Oct 2011

Wishing everyone a Happy and Prosperous New Year ..... Samvat 2068 !!!!!!!!!

We were celebrating the festival of light and it seems like the entire global market participated in their own way to celebrate with us.

This Friday for us in INDIA, it could be just one way or highly volatile session but close will be in GREEN.

SEBI had made announcement that STOCK bought on Tuesday(25th) and Wednesday(26th) could not be sold till Monday 31st OCT. So Its common sense that Nifty will close in green only. L'n'E methodology 

Hence be very careful in selection your trade, following technical view will be helpful.

No trade between 5201 and 5222 (to avoid trap)

Buy above 5222 with SL of 5201 for targets of 5266-5311-5350
Sell below 5201 with SL of 5222 for targets of 5177-5156-5131

Out Performers for 28/10/2011

----------------------------------
Reality, Banking, OIL, Auto & FMCG.

Under Performers
------------------
Pharma & IT.

DOW creates History

FII ...As most of you know we trade in currency as well and when we had predicted on 4th Oct 2011 that DowJones has made a low of 10330 and ended the same day in green was very significant for this OCT series. We had clearly mentioned to our FII friends that DOW could be the first in global market to show some kind of strength.

I mean it was common sense for us to see ...FII exited Asian mkts, they also exited European markets...Its obvious they would not sit on cash ...they had to invest somewhere and what better then their own market ..US

And look today DOW has made history...OCT 2011 witnessed the biggest monthly gains,since Jan 1987 ...a whooping 15% (approx). 

Subscribers enjoyed most of it and all we have to say...this was just the DIWALI; we are getting warmed up for CHRISTMAS, which is yet to come.....so till then ...continue with our service and enjoy special reports like "Europe debt crisis ...... seals deal....." !!!

Muharat Trading

Last One year has been like a roller-coaster. With the biggest surprise of all was SBI losing more than 47% in less than 1 year.

SO what should be do ...how to protect our money .... Is GOLD a best buy ???

J2k is here to answer all this question for you.

We have identified few companies that are must and one should have them in their portfolio over the next one year. Off course please don't buy all at one go ...buy on dips and as per the  recommendation provided in future in this blog.

Sector	Companies
Automobiles Banking & Financials Agri Input & Chemicals Engineering, Capital Goods and Infrastructure IT Service Others	Bajaj Auto, M&M ICICI Bank, IDFC Coromandel International, GSFC, Rallis India IRB Infrastructure Hexaware Technologies, MindTree Jubilant FoodWorks, Kajaria Ceramics

The above stock are only recommendation in equity.

GOLD & SILVER is always good to buy on Dips as 20% year-on-year appreciation cannot be ruled out.

So All you   people have a safe diwali and enjoy the festival of lights.

Invest wise as its your money.

Nifty Futures for Tuesday 25 Oct 2011

First time i will see an expiry on Tuesday ..coool

All the eyes on RBI Policy meet today. Highly volatile session today.

No trade between 5084 and 5112 (to avoid trap)
Buy above 5112 with SL of 5096 for targets of 5136-5152-5170-5188
Sell below 5081 with SL of 5101 for targets of 5063-5045-5027-5009

Out Performers for today
----------------------------------
LARGE-CAPS, STEEL, OIL, AUTO, AND REALITY.

Under performers for today
------------------------------------
MID-CAPS, FMCG, AND TEXTILES

Nifty Futures for Monday 24 Oct 2011

On Monday we can expect opening in green; but once noon sets in expect profit booking and we could give away initial gains once Euro opens.

Trade with positive Outlook, some upside is still left and the upper resistance seems achievable like 5185 and 5222 in this week.

Intra-day trades can be taken as per levels given below.

Nifty Futures Technical levels for intra-day trade on 24.10.2011

No trade between 5052 and 5080(to avoid Bull v/s Bear trap )
Buy above 5086 with SL of 5050 for targets of 5111-5139-5169
Sell below 5048 with SL of 5062 for targets of 5014-4979-4922

SECTOR TO OUT PERFORMERS
----------------------------------
MINING, STEEL, OIL AND REALITY with AUTO

UNDER PERFORMER
------------------------------------
FMCG, TEXTILE AND PSU


Rain Check on Past calls
1) Bajaj Auto could make a new 52-week high, outlook still +ve accumulate for tgt of 1800++
2) Tata motors before the result season started we had mentioned the boost from Brazilian govt for sale of Nano Cars may take the stock back to 190-200 levels. Today a good opportunity for traders.

Nifty Futures for Aug 2011

Temptation .... Even the first man "ADAM" could not resist the APPLE ...then how can we!!!!

Entire July, I was mentioning only one point, Q1 result will not be good and hence cascading effect will come on the economy. RBI policy was also a turn off for the market and hence nifty has slipped in a down trend.

Major triggers for this month: LOKPAL Bill, Inflation, IIP data and rising QE3 concerns for USA along with debt crises; NIFTY is looking week again in AUG 2011.

To add further last 3-4 trading sessions we can see "DOJI" pattern being created in Nifty Futures which only suggests one thing that Nifty Puts will be active.

Nifty Support and Resistance for this month
Support 1: 5330
Support 2: 5180 (which is also low for 2011 and below this nifty could be heading for 5000 or 4900)

Resistance1: 5630
Resistance2: 5745 (This is the last month high and above this nifty could be heading for 5900 or 6000)

If I have spare Rs10,000/- I would buy 10 LOTS of 5200 Puts at around 20rs and hold for the entire month, this is only for those who are willing to take 100% risk, BECAUSE profit starts ONLY when NIFTY dips below 5330.

Subscribers please ensure your mobile no. is updated with us for daily tips and market round up.

Happy INVESTING...from LEARN n EARN team.
Regards,
J2k

Nifty Futures for Wed 20th July

Smart recovery in Europe and US has given a small boost to the global markets and most of then are in green today morning. 

We can expect nifty to open with a gap up and try and take 5630 as a strong support @ this 1 resistance level mentioned earlier. On the upside the last week high of 5667 is very critical and sustaining above this nifty will test 5700 for sure.

But if consistent buying is not visible in the 2nd half of the day, Nifty may test the new support made at 5584 & 5555 and the only way to ride on both sides is sell if nifty goes below 5602.

Learn to develop a swing trading strategy which can factor in the volatility of the market movement and earn on either side of the movement with ease.

Sector's to watch out and buy on DIPS for today:

Oil & gas, IT Stocks, Banking

Nifty Futures for Monday 18th July

Nifty should open with a gap up and sustain the momentum. Most likely if nifty does not cross 5630 very soon then the BEARS could be more interested in taking the nifty down.

Buy nifty if above 5594 for tgt of 5630 and 5667 (last week high) and on the down side if nifty goes below 5564 then tgt will be 5504 and further support will come at 5480 levels.

Watch out for Europe stress test results and US initial data for the stimulus updates.

18th July '11 - SENSEX

VEDIC MATHS..... Lot of people know about it ...but hardly anyone believes in it.

SO call me a believer, blindfold or one who follows astronomical science for clues.... 18 - 7 - 11.

Yes that's the date on MONDAY 18th July 2011

WHY is this date important:

On 18th Feb 2011, sensex closing was 18211.52 which had a lot of significance. Jan 2011 had 5 weeks and Feb 2011, 2nd week means 7th week of this year 2011 had this date 18/2/11 and now if you relate 18211.52 (5+2=7) you will understand what i am trying to explain.

Similarly, 18/7/11 is the 29th week for this year and in short 2+9 = 11 which means on this monday we may see sensex touching 18711.29 and if it closes above it ....the next prediction would be shocking for most of us.

SO stay tuned for such great analogy of the markets.

AND special bonus for all you lucky readers of this post....Find below an Insight to the Q1 earnings and expectations of various sectors:

Outcome of EGOM meeting

The Empowered Group of Ministers (EGoM) has decided to increase the auto and cooking fuel prices and reduce the custom and excise duty on crude oil and other petroleum products.

• EGOM has decided to hike Rs.3/ltr on diesel, Rs.2/ltr on kerosene and Rs.50/cyl on LPG. However it has considered steep cut in custom duty by 5% in crude oil (from 5% to nil) and in all petroleum products (from 7.5% to 2.5%)
• The total under recovery for FY12E previously was at Rs.1700bn considering the steps taken by the EGOM, the total under recovery will reduce by Rs.490bn to Rs.1200bn in FY12E.
• Reduction in custom and excise duty will lead to revenue loss of ~Rs.490bn to the government.

Comparison of fuel price with other neighbouring countries:

Based on the below mention table the prices of PDS Kerosene in India is the cheapest in the region and is 66% lower than the price in Pakistan, 65% lower than Nepal, 47% lower than Bangladesh and 41% lower than Sri Lanka. The prices of domestic LPG in India is also the cheapest in the region and is 55% lower than
the Sri Lanka, 52% lower than Nepal, 35% lower than Pakistan and 18% lower than Bangladesh.

                        Diesel / Rs. Ltr        Kerosene / Rs. Ltr           LPG / Rs. cyl
India                      37.75                       12.73                             345
Pakistan                 48.89                       43.95                              614
Bangladesh            27.81                       27.81                              484
Sri Lanka               34.53                       25.12                              878
Nepal                    42.61                       42.61                              821
Source:MoPNG

What is the Implication on Government and Companies?
A) Implication on Government
Reduction in Custom and Excise duty will lead to revenue loss of ~Rs.490bn to the government.

Breakup of Revenue loss to the government In billion
Reduction in custom duty                                                                                   Rs.260
Reduction in Excise duty                                                                                    Rs.230
Total Loss                                                                                                       Rs.490


Break up of Revenue loss due to Import Duty cut from 5% to 0% on crude oil
Particulars                                                                                                             Amount
Crude Imported in India (MMT)                                                                                     140
Current Indian Crude oil Basket ($/bbl)                                                                        112.7
Import Duty @ 5% ($/bbl)                                                                                             5.6
Import Duty for the Government (Rs. in bn)                                                                  260.2
Loss for the Govt due to duty cut from 5 % to 0% (Rs.in bn)                                    260.2
Note: Indian basket ($/bbl) as per first fortnight June 1-15


Excise Duty cut on diesel by Rs.2.6/Ltr (from Rs.4.6 to Rs.2/Ltr)
Consumption of Diesel (MMT)                                                                                                       65
Cut in Excise Duty (Rs./Ltr)                                                                                                          2.6
Revenue Loss for the Government (Rs. In bn)                                                                               236.9 
Total Loss for the Government (Rs. In bn)                                                                               496.9


B) Implication on companies
Total under recovery will reduced by 26% to Rs.1200bn for FY12E
The increase in fuel prices and duty cut will help oil marketing companies to cut under recoveries by 29.4% from Rs.1700 bn to Rs.1200bn in FY12E. This is at an assumed Indian crude oil basket at $112/bbl on June, 1-15, 2011 fortnight. However, the subsidy sharing mechanism is not yet decided for remaining under recovery by the EGOM.

Due to lack of clarity we have assumed subsidy sharing mechanism based on Q1 FY12E sharing formula as 52.5% of Government, 33.3% for upstream companies and balance would be provide by OMC’s. After the EGOM meet government indicated that they will see the situation at the end of the year and decide the subsidy sharing formula later part of the year.

Nifty Futures for Monday 27th June

The fight between the bulls and bears was at its best during last week. The BEARS won the first round by hammering down the markets at the start of the week. However, the BULLS turn the tables on the bears and left them in a state of shock with a strong 3.16% gain (AUSTIN Power 3:16) on Friday 24^th June 2011 creating a Bullish Hammer Pattern on weekly basis as recommended to Subscribers on 20^th June 2011 .

Now, there could be two possibilities for Monday/Tuesday. (One), some profit-booking in Nifty would take the Futures lower to 5410 levels, where it could find support and restart its upward journey Monday/Tuesday for possible upside targets in excess of 5504. (Two), which looks more likely, the market rises, and the Nifty faces resistance around its recent high in the range of 5565 - 5604, and then slips again to the lower levels of 5410 - 5360.

Please note: We have to understand what happens on Monday, based on one of the two possibilities; to be able to analyze June 2011 Expiry in conjunction with the recommendations made on 8^th & 20^th June 2011 by me.

Although I see, the short term trend is likely to remain bullish, if Nifty future manages to trade above 5504 level but if Nifty future breaches the strong support level of 5410, trend may be reversal and it may test the lower levels like 5304-5254 levels…

.Just Stay tuned Nifty June Expiry special would be uploaded very soon

Learn n Earn Series brought to you by:

J2k

Nifty on Track as recomended on 8th June

Hi,

Lot of you would be wondering how come we gave a prediction of bottom formation at 5180 once 5304 is broken... the answer is very simple charts.

Over a period of time i have learn that charts are formed once the movement is clear but Fibonacci is the ONLY method which gives direction to the chart and tells us what the chart will do and how it will be formed.

In Simple words Fibonacci is like a fortune teller for the numbers. Hence mastering this strategy to certain extent; i had found some learning whereby I could see a double bottom formation happening at 5180 level for NIFTY and hence I had given a specific date of 16th June as well for a support to watch and the same was tested but no visible support was seen and hence today NIFTY had a INTRADAY low of 5182. 

Thus, the finding of “Fundamental challenge for the Month of June '11” was a great success.

Now remember one thing Nifty has made a weekly low of 5182 and the same should not be broken this week on closing basis or ELSE 4900 for NIFTY will come for sure.

On Upside Nifty expiry should be above 5360.

Watch out for this space for the next big thing ...FY12 Q1 expectation are just round the corner and stay tuned for the Learn n Earn series calls.

Regards

J2k.

Fundamental challenge for the Month of June '11

After the OPEC announcement on not to increase the oil production, crude oil prices have gone up and Global economic recovery remains a big question mark ???


Indian economy overview for June 11

1. Diesel Price Hike V/S Inflation rise also Rs 3-4 per liter in diesel prices and Rs 30 increase in LPG is expected to happen soon. (Meeting was to be held on 09-06-2011 )
2. Monsoon Assumption Unclear 
3. Banking sector interest rates are up 
4. URO Zone Problem
5. Food inflation shot up to 8.55% for the week ended May 14, the highest level in four weeks

Overall in Short for June 2011; I still expect more downside may be upto 5304 or 5180 till 5626 is not broken on closing basis. 5360 should be target till 16th June 2011 and act as a support

Oil jumps as OPEC fails to agree on more output

Please check the post made in the month of March 2011 we had already hinted the crude price could touch all time high and today the OPEC meeting has just confirmed that ..please find below an overview of the OPEC meeting happened on Wednesday 8th June 11

Oil prices jumped by USD 2 on Wednesday after OPEC failed to reach a deal to increase output, raising fears of supply shortages later this year and a price rally that could damage global economic recovery.

OPEC talks broke down without an agreement to raise output after Saudi Arabia failed to convince other members to lift production.

"We were unable to reach an agreement -- this is one of the worst meetings we have ever had," Saudi oil minister Ali al-Naimi said.

By 1355 GMT US light crude was up USD 1.40 dollars at USD 100.50 while Brent added USD 1.08 at USD 117.86.

"It came as a surprise. It is bullish for prices. If you look at demand it will be very robust in the next months and there is a big need for extra OPEC oil," said Amrita Sen from Barclays Capital.

OPEC's Secretary General Abdullah El-Badri said the effective decision was no change in policy and that OPEC hoped to meet again in three months' time.

The US Energy Information Administration will issue its weekly inventory data later on Wednesday.

Analysts expected US crude oil inventories to have fallen 300,000 barrels last week, while gasoline stocks climbed 1 million barrels, according to a Reuters poll.

Fuel price hike on Saturday 14th May 2011

Fuel price hike; inflationary in short term; beneficial in long term.


Government hiked the prices of petrol by Rs5/litre effective Saturday midnight. While the increase in petrol prices may not have much impact on inflation, the expected hike in other fuels liked diesel is likely to have much bigger impact of 0.7% on inflation. The increase in the price of diesel will even have cascading effect due to rise in the power and freight expenses. We expect the cascading effect to the tune of another 0.6%, taking total impact to 1.3%.


                      %               Rs/ltr               % chg              Weighted impact (%)
Petrol           1.09              5                    11.3                               0.1
Diesel           4.67             4                     9.0                                0.4
LPG*            0.91             25                   7.1                                0.1
Kerosene     0.74             3                     6.8                                0.0
Total             7.41                                                                          0.7


Note: Except petrol all other poducts prices are assumed prices;   * Rs/cylinder 


If all price hikes go through, it will help the subsidy burden to reduce by Rs280bn, which we believe is marginally positive in long term for interest rates and liquidity in the system. The government has created provisions of Rs268bn in the budget from subsidies for fuel which we believe are lower by at least Rs500bn at the current fuel prices.


Source: Equity Advisor.

Economic and Market Impact of Japan's Earthquake

The damage from the massive earthquake in Japan will impact the world’s third largest economy, but will it derail the global economic recovery?

While details are slowly emerging in these early hours, we can look back to the Kobe earthquake of 1995 as a guide. The Kobe quake caused $100 billion of damage to the Japanese economy, but it only took days for the Japanese stock market to recover.

The most direct impact is likely to be seen in Japanese exporters, like Honda, Toyota and Sony, whose production facilities will face disruption in the coming days. Additionally, Japanese insurance companies are likely to see large losses as a result of the claims associated with the earthquake.

The timing of the current quake could be more significant, however, because the global recovery is so fragile. Just yesterday, U.S. stocks tumbled nearly 2 percent on continued concerns over Middle East unrest. Today, Japanese stocks were down 10.55 %; other Asian markets were lower; European stocks traded to three-month lows and US stock futures are pointing to a lower opening.

Impact on Crude Oil, Fuel and Nuclear Power

Crude oil saw a pullback breaking the recent uptrend from the Libya and Middle East unrest.  Reuters reported that there were six refineries that account for 31% of Japan's output shut down after the quake and it was unclear when they would reopen.  Some media reports suggested the crude oil price drop is largely due to expectation that these refinery shutdowns could mean less imports of oil. 

Japan Imports = 1.6% of World Demand
Based on the U.S. EIA data, Japan imported 4.7 million barrels a day (bpd) in 2009, with total oil refining capacity of 4.6 million bpd at 29 facilities as of January 2010. According to Reuters, the six refineries that are shut down have a total capacity of 1.40 million barrels per day (bpd).  That's about 1.6% of the 89.3 million bbl/d global 2011 product demand forecast by the International Energy Agency (IEA).

While Japan is the second-largest net importer of oil in the world after the United States in 2009, the estimated import disruptions due to the earthquake does not appear significant enough to sway world’s crude oil market.  

Japan to Increase Energy Imports after the quake 

On the other hand, since about 25% of Japan’s electricity is coming from nuclear, the resulted power shortage due to closures of a dozen nuclear reactors after the quake suggests Japan will likely need to increase its imports of petroleum products and other energy sources (See Chart above).


The country’s power generation relies mostly on coal and natural gas, which means there will be an increase in imports of diesel (to power generators), and other petroleum products (since part of domestic production is offline), along with natural gas/LNG, and coal, just to keep the the entire nation going in the aftermath.

China Trade Deficit - Major Catalyst 
From various indications, the drop of crude price after Japan's earthquake could be partly attributed to the  knee-jerking reaction to a devastating natural disaster, some risk-off profit taking, USO starting its rollover on March 8, and the fizzled “Day of Rage” protest in Saudi Arabia.

However, the major catalyst for the downward pressure on crude oil before and after the Japan earthquake was the surprise trade deficit number--$7.3 billion, the largest in 7 years--coming out of China signaling an possible economic slowdown.
Fuel Prices Could Spike
The oil import disruption at Japan is unlikely to wrangle an upward momentum out of crude oil.  However, the Japanese refinery shutdown happens to coincide with planned shutdowns of crude units led by China and Japan that will cut 2.12 million barrels of output a day, or 6.8% of the region's total, in the April-June quarter, according to Reuters.  
Moreover, the second quarter is the typical refinery turnaround season with a substantial amount of crude processing capacity offline.  As such, there could be a tightening of the global petroleum products market, and spikes in the prices of petroleum products includinggasoil (diesel), gasoline, along with LNG and coal prices.  This will likely benefit other Asian refiners in South Korea, Taiwan, China & India and oil majors such as Shell (RDS), Reliance Indswith refineries in the region.

Meanwhile, construction, engineering and industrial material and equipment companies should also benefit from the massive rebuilding effort in Japan.  And some analysts also see a technology product price spike and supply crunch since Japan is a major high tech center of the world that could impact earnings in the tech sector.  
More Pressure from Triple Expiration 
Now, turning back to the crude market in the week ahead, escalating call option trades (see chart)—the highest since July 2009--suggest the major rollover action is yet to occur.

Since there's not a real physical supply shortage, and Cushing is brimming with crude unable to take delivery, more downside could be expected in the April crude contract from March 15 to March 22 with the triple expiration on ICE and NYMEX, which would further pressure both WTI and Brent.

From a technical perspective, $95 seems a solid target for the WTI, and Brent could come down to $109 or $108 range. 

Japan Nuclear Meltdown Crisis 

Besides crude oil, the biggest story out of this international disaster for the energy sector is the near materialization of the greatest obstacle and fear of the nuclear power – a possible nuclear reactor meltdown.

As of this writing, Japan is still struggling to contain the situation, and has resorted to using salt water to cool two reactors at Fukushima Plant. The reactors were damaged by the earthquakes, and could be at risk of meltdowns and spreading radiation. 
U.S. Nuclear Power - 3 Decades of Void 
The U.S. has 104 nuclear reactors producing 799 billion kWh in 2009, or over 20% of total electrical output, according to World Nuclear Association. Although the US is the world's largest producer of nuclear power, accounting for more than 30% of worldwide nuclear generation of electricity; very few new reactors were built in the past 30 years after the Three-Mile incident in 1979.

However, despite big obstacles like cheap natural gas, high project costs and the Great Recession sapping demand in recent years, nuclear power was staging a comeback when President Obama's 2012 budget proposed $36 billion in loan guarantees to build nuclear power plants. The industry is expecting 4-6 new units to come on line by 2018, a result of 16 license applications to build 24 new nuclear reactors made since mid-2007. 
Fukushima - The Deepwater Horizon of Nuclear Power
Now, the little progress the U.S. nuclear power sector has made in the past three decades could see a major setback, if not completely decimated, by the worst nuclear accident in Japan’s history.  There will likely be a more regulatory scrutiny, and a seismic shift in the global energy mix where more resources will be pouring into natural gas, clean coal and renewable, instead of nuclear.

In a way, Fukushina is the Deepwater Horizon of the nuclear power sector, and it fair to say it might take another 20 years of zero incident to get nuclear power back into the energy fold.
Nuke Write-off?
On that note, future investments in nuclear power could be even harder to come by, and companies like NRG Energy (NRG) and Southern Company (SO) may need to scrap or write off their planned nuclear power projects, which could impact their forward earnings, and stock valuation.

Different Impact on Different Sectors 
While the world is still in shock watching this tragic disaster still unfolding on TV, different sectors will likely experience different impacts from this unprecedented event.

In this case, it is most likely a non-event for the crude oil, and the nuclear power basically has met its Deepwater Horizon.  Likewise, other Asian refiners and companies specializing in infrastructure building could get an unexpected boost in their business, while consumers would likely feel the pinch in the form of higher fuel and technology product prices.

Please Note: - Above points are synopsis of various experts and their articles and blog available on Reuters and Bloomberg. J2k has just tried to present in composed manner.