Stock To Trade on 21-01-2011

1. Godrej Inds :- TA Turtle upside breakout in Godrej Industries 30 min chart. Buy with stop loss below 170.
2. HUL :- Oversold TA Insync in HUL. Buy with stop loss below 295.
3. SAIL :- NR7 pattern in SAIL. Buy above 170, Sell below 165.

CHOPPY, VOLATILE INTRA DAY ACTION FINALLY LEADS TO GAINS

The markets continue to be choppy - this means that prices move up and down without making any head away in either direction.

Beyond this choppiness is the trading range which has developed for the Nifty - between 5650 and 5750. The Index has spend five trading days inside this range. A breakout above 5750 or a breakdown below 5650 will give a directional move. I cannot forecast the direction in which the Index will finally move. Suffice to say, once the Nifty moves out of this range we should get on board.

The Bank Nifty has seen gains for the past four days, however small. Since the Bank Nifty had fallen a lot, these small gains could easily be considered as a counter trend move before the main down move resumes. The last pivot high in banks was 11160. If and when the Banks move above this pivot, buying will be justified. Till then, trade on the intraday charts with the purpose of capturing small moves.

DERIVATIVE Stock

• IFCI ( CASH – Rs.58.70) : The stock has given some indications of bottoming out. Buying is advised above Rs.59.25 for a target of Rs.60.50 and Rs.62. Higher target of Rs.64-65 is also possible. Stop Loss of Rs.55.25 should be kept. The time frame of the trade would be around 7-8 trading sessions.
• ALLAHABAD BANK ( CASH – Rs.211.80 ) : Buying is advised above Rs.212 for a target of Rs.216 and Rs.220. Higher target of Rs.223-224 is also possible. Stop Loss of Rs.204 should be kept. The time frame of the trade would be around 5-6 trading sessions.

Market Outlook for 21-01-2011

Nifty moved up sharply in the latter part of the session to close above 5700. For greater part of the sessionmarket traded in the red as yet again a few heavyweights like RIL put pressure on indices. Nifty slipped below 5650 mid session before short covering coupled with some value buying in banking counters improved the sentiments. Banking heavyweights like ICICI bank and HDFC bank were amongst the prominent gainers and that boosted the sagging indices. Even SBI that made a new recent low at 2463 recovered sharply to claw its way back above 2500. Other mid cap banking counters too continued to move up. Some of the prominent gainers for the day were Orchid, Indian Bank, Dena Bank, IDBI, Syndicate bank, IFCI, IOB, Al Bank, Can bank and Central Bank. RIL was bogged down yet again by various rumors as it slipped to around Rs 950. It recovered a great part of its intraday loss towards the close but still ended the day in red. Some other losers were Crompton, United Spirits, Gail, PTC, Jain irrigation, Petronet, ITC and ONGC.
Nifty bounced back from just around the previous recent low at 5628 and recovered smartly to close above
5700. It seems that market is finding support around 5630-5650 and could again try to move past 5740-50. Banks are finding some buying around current levels as most of the banking results have been good so far. That is perhaps leading to some kind of short covering ahead of credit policy on 25th Jan. Even a reasonable technical rebound in banking counters could support indices. Allahabad Bank, Indusind Bank, Central bank (above 174), IOB, Syndicate Bank, Can Bank ( 602) and Yes Bank( above 278) could see reasonable upside from current levels.
Nifty has immediate support around 5650 and then around 5610 while resistance is at 5740-50.