Todays sentence

To truly master trading, an individual must be open to evaluation and change, and to adjustment if necessary, based on the observations and recommendations of those who have been successful over time. – Jake Bernstein

Stock To trade 18 02 2011

• PIRHEALTH :- Piramal Health stops the decline. Ready for an up move.
• Reliance Inds :- Reliance is coming out for a trading range. keep stop loss at 930.
• Sesa Goa :- Sesa Goa is consolidating for last 3 days ready for an upmove. TA Insync is showing over sold, ready for an up move.

Market rallies towards resistance

Nifty Watch:- The Nifty opened at 5496. The Index made a low at 5460 with a 36 point decline, and then moved up to its day high at 5550 and finally closed at 5550 with a gain of 54 points to its open. As we have discussed yesterday about a big move, that move did come about today due to yeterday's NR 7. This 90 point up move rally from its Intraday low to high shows, there is enough bullishness in the market. However, all markets correct. The Nifty has retraced 100% of its down move that started from 5550. It is quite possible that the market may now face resistance at current levels. A pullback could see a correction of 100 to 125 points.

Trend:- The short term trend is up. The Intermediate trend remains down, with the Nifty trading below its 200 days and 50 days moving average but these averages are coming closer with every advance. The 200 DMA is at 4637 therefore, it is now within strking distance of the current close. The average should act as resistance, at least initially. There will be many funds that are probably wanting to sell out, having missed the previous opportunity. These funds may step in to liquidate. If the Nifty continues to move up, crossing the 200 DMA, then we will have a strong buy signal. Let us wait and see. Meanwhile, buy on dips. TA Insync(55-5) is now above the level of -45 and still facing up. This shows us that the up move continues for few days more.

Level:- Looking for support at 5460. Major resistance comes at 5550. Today 4 times Nifty touches this level but could not able to break it and at last nifty closed at this level. So this is a significant resistance for nifty.

Summary:- Today Nifty recovered all the losses of previous downside decline which started from 5550 to 5175. Traders should take partial profit in their long position. 5550 is a resistance for the nifty. If Nifty strongly breaks it tomorrow then we can see a new high also.

Market Outlook for 18 02 2011

After hesitating around 5500 for couple of days and even in the early part of session Nifty finally moved decisively past 5500 and shut shop around 5550. Banks and Capital Goods heavyweight helped the bullish cause as stocks like HDFC bank and L&T pushed for higher levels. IDFC, Suzlon, Bharti, HDFC, Tata Steel and M&M were other significant index gainers. The breadth was positive as more sectors and stocks participated in the rally. Some of the prominent gainers were Sobha, Tata Global, Patel Eng, Jain irrigation, Century, IOB, Educomp, Escorts, Tech Mah, Mphasis, LICHsg, IVRCL, Al Bnk and REC. Few that missed the list and ended up on losers’ list were Unitech, Sun TV, IBReal, Fortis, Auro Pharma, GMR Infra, HCL Tech, Gail and Wipro. Nifty managed to stay above 5450 and finally moved higher to close just around 5550. We have seen around 7% rise in 5 sessions. There is likely to be some resistance around current levels of 5550-75. But, the fact that market held the levels of 5450 and consolidated around 5500 for couple of sessions suggests that after a brief correction/resistance Nifty could move higher to challenge the next crucial levels of around 5625-40. Banks continue to lead and that is good news for bulls. HDFC bank has seen a nice up move and could move further to around 2220-30 before experiencing some resistance. SBI has more headroom as it could target 2830-40 and then 2910-30 in coming sessions. It finds significant support at lower levels around 2730 and then 2685-90. LIC has given a breakout on daily charts and could be headed higher to Rs 215 and even Rs 240. Rs 188-193 becomes a strong support level in the short term. Others that are looking good are HDFC( above 653), Indusind Bank, Allahabad Bank, Andhra bank( above
152), ABG ship and L&T.

Nifty has immediate support around 5470-85 while immediate resistance is just around 5560-75 and then around 5620-30.