Todays Sentence

Good money management alone isn’t going to increase your edge at all. If your system isn’t any good, you’re still going to lose money, no matter how effective your money management rules are. But if you have an approach that makes money, then money management can make the difference between success and failure. – Monroe Trout

Stock To Trade 08 02 2011

• Tata Power :- Tata Power may be ready to make a short term low. Consider buying with stop loss below 1150.
• Balrampur Chin :- Balrampur chini has an NR7. Consider buying above 73.50, stop loss below 70.50.

NIFTY FINDS SUPPORT AT 5380

Nifty Watch:- On Monday, the first day of the week, the Nifty opened at 5400. Right from the start, the Nifty showed some efforts for a base building process. The Index moved in a narrow range, probably getting ready for a big move which ultimately did not come about today. In the process, the Index made an NR7 today – the narrowest range in seven days. We can expect a breakout / breakdown tomorrow. The Nifty closed at 5406 with a high at 5444 and a low at 5378. The good news is that the Nifty finds its support at 5380. We have to wait and watch to find out if the support holds..

Trend:- Today’s market shows us an intermediate downtrend. Market is trading below its 200 days and 50 days moving average. TA Insync(55-5) is now oversold. It is possible for this oversold condition to persist with the Index making new lows. But, sooner or later, we can expect a relief rally / consolidation.

Level:- Looking for support first at 5380 and then at 5130. The resistance comes at 5460, then 5500. Summary:- Nifty finds a strong support at 5380 in a bearish market. The trading range of the nifty is 5380 to 5500. If it breaks below 5380 then the decline will continue and a strong breakout at 5500 may see a big rally also.

Market Outlook for 08 02 2011

Market did not do much as indices stayed almost unchanged in the end. But there was volatility during the session. Nifty struggled to sustain above 5400 and the GDP numbers also didn’t help much. Nifty did find some rebound after the GDP announcement but late selling in key heavyweights again pushed it back to around 5400. It was a mixed session as some stocks did find some value picking at lower levels. Heavyweights like Hero Honda, ITC, NTPC, RIL and OMCs were amongst those attracting buyers. But, on the other hand there was selling in banking counters, infra counters, ABB, Jet Airways, Lupin, Cipla, Ranbaxy, Wipro, HDFC, TCS and L&T. Uncertainty about the governance still seems to be the topmost issue and the meeting scheduled for tomorrow to discuss parliament imbroglio might play a crucial role in deciding the short term direction of the market. Anything that favors a smooth functioning of parliament could trigger a sharp rebound in the markets as we are already trading in an oversold zone. But anything that prolongs the uncertainty could be a big negative in the short term. Technically, we are in an oversold market and there is crucial support at 5350. Immediate resistance is likely around 5450-70 and then a crucial one is placed at 5550-60.