Todays Sentence

I think most great traders are no different from great athletes, great musicians or great surgeons. It’s the life-long pursuit of mastering the markets. It means working 10, 12, 18 hours a day – Laurence Connors

DERIVATIVE PICK

JP ASSOCIATES ( CASH – Rs.90.30) : The stock has made a smart rebound and we expect the smallupmove to get converted into a bigger upmove. Buying is advised above Rs.90 for a target of Rs.94 and Rs.96.50. Higher target of Rs.99-101 is also possible. A slightly loose stop loss of Rs.85.75 should be kept. Since it is a positional trade, the time frame would be around 10-12 trading sessions.

STOCK WATCH

LIC HOUSING FINANCE ( LICHF)
Present Price – Rs.193.20, Buy Above – Rs.198, Projected Price – Rs.218-224

LICHF is the fourth-largest mortgage finance company in India. It provides loans for homes, construction activities, and corporate housing schemes. Almost 90% of the company’s loans are to retail customers and the balance 10% to large ticket commercial sector companies. On the technical front, once the stock price crosses the level of Rs.198, it will break out of a bullish pattern and the target of the stock works out to Rs.218-224. The 14 day RSI too after a consolidation between 40 and 60 levels is also ready for a breakout from the 60 levels which once happens will strongly support the pattern breakout.

Stock To Trade 17 02 2011

• GMDC :- GMDC Ltd made a NR7 today looking for a big move. Support at 115, Resistance at 124.
• HUL :- HUL is trading in a range since last 14 days today made a narrow range may lead to a big move.
• IDBI :- IDBI Bank made a narrow range today. May lead a big move. Support at 130.

CONSOLIDATION WITH NR7

Nifty Watch:- The Nifty opened at 5484. The Index made a low at 5458 with a 30 point decline, and then moved up to its day high at 5508 and finally closed at 5493 with a gain of 9 points to its open. Today market consolidates between trading ranges of 50 points. It may lead to a big up move tomorrow. Nifty made a narrow range today which shows us that a big move will come soon, maybe tomorrow. This could be up or down.

Trend:- The short term trend is up. Today’s market is in a process of consolidation. The Intermediate trend remains down, with the Nifty trading below its 200 days and 50 days moving average. TA Insync(55-5) has now crossed above the level of -45 and is moving up. This shows us that the up move which started may continue.

Level:- Looking for minor support at 5450 and major support at 5380. Minor resistance comes at 5500 and major comes at 5550. Nifty made a Narrow range today. This could signal a big move tomorrow.

Market Outlook for 17 02 2011

Markets opened on a flat note and for the whole day Nifty traded in a range of 50 odd points ( 5508 on the higher side and 5463 on the lower side). It oscillated up and down on alternate bouts of buying and selling but could not breakout on the either side of the range. Market response to Tata Steel’s results were positive as the stock closed on a strong note at Rs.641 and it appears that the stock has the potential to cross its previous swing high of Rs.664.50. The other stocks which ended with minor gains were Titan, L& T, Axis Bank, Jindal Steel and Bombay Dyeing. On the other hand stocks which were on the losing side were BHEL, Dr Reddy, HDFC and M&M but the losses were of a very minor nature. A few cash stocks like TTK Prestige, Jindal Polyester and ARSS Infra closed with minor gains with low volumes. As discussed yesterday, we expect the markets to inch up in a slow and steady manner till the presentation of the budget.

Nifty is expected to consolidate between 5450 on the lower side and 5550 on the higher end for some time and once it is able to move beyond 5550, it can move upto a level of 5650-5700. As long as 5450 level is held it would be prudent to trade with a positive bias.