- Federal Bank :- TA Turtle upside breakout Federal Bank. Buy with stop loss below 370.
- Sobha :- NR7 bar pattern in Sobha Developers. Buy above 264, Sell below 258.
Thursday, March 17, 2011
Stock To Trade 18 03 2011
Locked in 100 point range, Nifty waits for direction
The Market is alternating between up and down days. After yesterday’s rally, the Nifty confounded all trend traders by actually faling down, closing today at the 5450 level.
The Nifty is now locked in a trading range between 5450 and 5550 – this is just a 100 point range, quite the narrowest range in many months. Traders should stay away, avoid trading inside this range. A close above 5550 will suggest a breakout on theupside while a close below 5450 will gie the signs of a breakdown. Just wait and watch. What about investors? Well, if the idea is to invest for at least 3 years, then the current levels are as good as, say, levels 10% lower. If the purpose is to obtain trading gains over the next few months, then buying is not suggested. The Nifty is in a bear market (the correction for the up move from 2200 to 6300, qualifies as a bear market). Lower levels
should come in, although we cannot say when.
What if we are wrong? There is no need to panic, since a breakout above 5550 will give us signals of buying, at least as a short term trade.
What about Japan, Crude, trouble in Bahrain, political problems in India, ….. ?
Well, the Indian market has withstood all of these issues. Thus, we should ignore the news and go with our charts. The charts tell us to wait for a range breakout, so, patience!
The Nifty is now locked in a trading range between 5450 and 5550 – this is just a 100 point range, quite the narrowest range in many months. Traders should stay away, avoid trading inside this range. A close above 5550 will suggest a breakout on theupside while a close below 5450 will gie the signs of a breakdown. Just wait and watch. What about investors? Well, if the idea is to invest for at least 3 years, then the current levels are as good as, say, levels 10% lower. If the purpose is to obtain trading gains over the next few months, then buying is not suggested. The Nifty is in a bear market (the correction for the up move from 2200 to 6300, qualifies as a bear market). Lower levels
should come in, although we cannot say when.
What if we are wrong? There is no need to panic, since a breakout above 5550 will give us signals of buying, at least as a short term trade.
What about Japan, Crude, trouble in Bahrain, political problems in India, ….. ?
Well, the Indian market has withstood all of these issues. Thus, we should ignore the news and go with our charts. The charts tell us to wait for a range breakout, so, patience!
DERIVATIVE PICK
BHEL ( CASH – Rs.1964) : The stocks has formed a Bullish Engulfing pattern in the daily charts and as the name suggests has strong bullish implications. Buying is advised above Rs.1966 for a target of Rs.1994 and Rs.2010. Higher targets of Rs.2025 and Rs.2042 is also possible. Stop Loss of Rs.1929 should be kept.
Market Outlook for 18 03 2011
Markets opened in the negative territory primarily on account of negative global cues but still managed to show the resilience as the cuts were not deep. Political uncertainity because of the Wikileaks and concerns on rising interest rate environment because of rate hikes of 25 bps both on Repo and Reverse Repo saw some unwinding of positions. Banking majors like SBI, ICICI and Axis Bank saw their share prices drifting lower in a slow manner throughout the day. Other important stocks like Infosys, Maruti, Tata Motors and Dr Reddy also were on the top of losers category. Reliance ADAG group stocks like Reliance Capital and Reliance Infra saw some buying from interested quarters and were marginally up by apprx 2% each. Other stocks like BHEL, Titan and Asian Paints were the gainers primarily because of fund buying.
We are of the clear view that markets here in India have shown strong resilience in spite of several problems both on the domestic front and global arena and hence the bias is clearly on the long side. One should attempt to buy dips and once the Nifty moves past 5550, we could see an easy 100-125 points upmove till 5670 where the 200 DMA lies. Select midcap stocks like VIP Industries, Asian Paints, Tata Elxsi, TTK Prestige, Talwalkars and BF Utilities where fund interest is high could see some decent rise in the coming days because of NAV propping as the financial year end approaches.
Nifty has strong support around 5448 and 5400 levels whereas resistance lies at 5499 and 5525 levels. Trade with a positive bias and buy on dips as long as 5400 level of Nifty is held.
We are of the clear view that markets here in India have shown strong resilience in spite of several problems both on the domestic front and global arena and hence the bias is clearly on the long side. One should attempt to buy dips and once the Nifty moves past 5550, we could see an easy 100-125 points upmove till 5670 where the 200 DMA lies. Select midcap stocks like VIP Industries, Asian Paints, Tata Elxsi, TTK Prestige, Talwalkars and BF Utilities where fund interest is high could see some decent rise in the coming days because of NAV propping as the financial year end approaches.
Nifty has strong support around 5448 and 5400 levels whereas resistance lies at 5499 and 5525 levels. Trade with a positive bias and buy on dips as long as 5400 level of Nifty is held.
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