Todays Sentence

My goal on Wall Street was never to get rich but to stay in business. There’s a big difference. If you’re out of the business, you can never get rich. That’s why you have to be especially cautious when you’re trading a larger position size – Victor Sperandeo

DERIVATIVE PICK

JP ASSOCIATES (CASH – Rs.87.55) : The stock has made a smart rebound and we expect the small upmove to get converted into a bigger upmove. Buying is advised above Rs.88.50 for a target of Rs.91.25 and Rs.94. Higher target of Rs.96-98 is also possible. A slightly loose stop loss of Rs.83.75 should be kept. Since it is a positional trade, the time frame would be around 10-12 trading sessions.

Stock To Trade 15 02 2011

• BRFL :- Oversold BRFL Insync. Buy with stop loss below 238.
• IDBI :- TA Turtle upside breakout in IDBI 30 min. chart. Buy with stop loss below 135.
• OBC :- NR7 bar pattern in OBC. Buy above 340, Sell below 330.

TWO DAYS OF RALLY, NIFTY AT 5450 RESISTANCE

Nifty Watch:- One more Monday, the first day of the week - the Nifty opened at 5340 approx then rallied throughout the day to close at 5450 with big intraday gains. After today's gains, the Index has added almost 280 points from Friday's intraday low to Monday's close. This means about 280 points in one trading day - momentum that is not likely to be sustained. So, what is the outlook?

1. After almost seven weeks of declines, the Nifty is oversold, ready for a correction on the upside. The current upmove is probably that correction.
2. Time Correction: The up move may last anywhere between three to four weeks, in terms of time.
3. Price Correction: markets have fallen by 1050 points approx. A correction can see the Nifty rally by 400 to 550 points, giving targets of 5580 to 5730 approx. These are only estimates.
4. A two day rally has seen gains of 280 points. We can safely assume that markets will consolidate for a few days before resuming their advance. It is also possible that the Nifty may remain in a trading range fortwo or three weeks, thus completing the time correction, without hitting the price targets.

Level:- Looking for support first at 5410 and then at 5380.. The resistance comes at 5460, then 5500.

Market Outlook for 15 02 2011

After a long time did we see strongly up trending day as Nifty not only managed to sustain the positive gap, it also built on the gains as the day progressed. Nifty galloped more than 150 points and closed at the highest point of the day. All round buying was see as most sectors finished the day with sharp gains. Banks rallied sharply for the second successive and Capital Goods sector too saw solid gains. L&T was the biggest gainer amongst the index heavyweights. Some of the big movers for the day were United Spirits, PTC, TVS Motors, Tech Mah, Educomp, Apollo Tyres, Jet, IVRCL Infra, Balrampur Chini, GMR Infra, HDIL, Opto, Havells, JP Associates, Welcorp, KFA, Bajaj Hind, Suzlon, BGR Energy, Jindal SAW and KTK bank. Breadth was extremely positive and for a change it was difficult to spot losers though some pressure was seen in RIL, DLF and Rcom. Such strong and sharp rebound has been witnessed for the first time since Nifty started its southward journey from the levels of 6180-6200 in the first week of January. In the two days Nifty has bounced back almost 300 points from the intra day lows of Friday. Nifty is likely to face resistance around 5510-25 and could retreat from around these levels. Most of the stocks that have seen sharp rebounds are approaching decent resistance levels and one needs to be a bit cautious in taking long positions in these. Certain stocks that could still see higher levels are Welspun Corp, HDFC bank( to around 2145-2160), Sesa Goa, TCS and REC.

Nifty has immediate support around 5370-80 and then around 5310-25 while key resistance is likely around 5510-25.