- BPCL :- TA Turtle breakout in BPCL 30 min chart. Buy with stop loss below 570.
- LIC Hsg Fin :- NR7 bar pattern in LIC Housing Finance. Buy above 200.50, Sell below 197.
Thursday, March 24, 2011
Stock to watch 25 03 2011
Three days of gains, Nifty is now at point of breakout: will the Index move up?
The Nifty closed at 5522, up another 42 points, giving the index three consecutive days of gains. We can identify the resistance levels for the Index somewhere around 5550. If the Nifty were to close above this resistance, then we will have a breakout on the upside. The market is certainly giving many whipsaws, with periods of sudden optimism and pessimism. This is the nature of the trading range. When prices start moving up in the range, we have an impression that everything is going to be fine, see prices are moving up.
When prices start moving down, we get pessimistic – range will break down. What actually is going on is – just noise inside the range. A decisive trend emerges when prices move out of the range. Now, the Nifty did go below 5400 so we had a decisive breakdown of the range. Then what happened? Well, the index turned back, move above the half way mark at 5500 and is now currently higher than 5500. This raises the question: are we confronted with a false breakdown? With some regret, there is no clear answer to this question. The Market itself will tell us if the earlier breakdown was a false move. We have a pivot high identified earlier – 5535. A close above 5535 will give us a higher high. A close above 5600 will give us a confirmed breakout on the upside, but, then, even this can fail.
What happens if we have two failed breakouts - one on the downside, then one on the upside? Well, this would certainly be a choppy market – we have to accept such movements and hope that the choppiness will end soon.
Nifty Levels: Today (Thursday) was another NR7 day. We can usually expect a trust after NR7 days. Therefore, if the market begins to move up or down, go with the flow, chances are there will be a trending day.
When prices start moving down, we get pessimistic – range will break down. What actually is going on is – just noise inside the range. A decisive trend emerges when prices move out of the range. Now, the Nifty did go below 5400 so we had a decisive breakdown of the range. Then what happened? Well, the index turned back, move above the half way mark at 5500 and is now currently higher than 5500. This raises the question: are we confronted with a false breakdown? With some regret, there is no clear answer to this question. The Market itself will tell us if the earlier breakdown was a false move. We have a pivot high identified earlier – 5535. A close above 5535 will give us a higher high. A close above 5600 will give us a confirmed breakout on the upside, but, then, even this can fail.
What happens if we have two failed breakouts - one on the downside, then one on the upside? Well, this would certainly be a choppy market – we have to accept such movements and hope that the choppiness will end soon.
Nifty Levels: Today (Thursday) was another NR7 day. We can usually expect a trust after NR7 days. Therefore, if the market begins to move up or down, go with the flow, chances are there will be a trending day.
DERIVATIVE PICK
DENA BANK (CASH – Rs.99.50) : The stock is on the verge of an ascending triangle pattern which is bullish by nature. Buying is advised above Rs.101 for a target of Rs.105 and Rs.108. Higher target of Rs.110-112 is also possible. Stop Loss of Rs.93.85 should be kept. The time frame of the trade would be around 12-13 trading days.
Market Outlook 25 03 2011
It was a steady day at the bourses as Nifty traded above 5500 for majority of the session. Decent showing was seen in almost all sectors with Realty and banking leading the way. Unitech was up almost 10% on very good volumes. Many mid caps again hogged the limelight. There was strong buying in stocks like Videocon, Orbit, IBReal, Sobha and Dish TV. Auto and metals also witnessed value buying at lower levels. Ashok Leyland, Hindalco, Welcorp and TVS Motors were the major gainers from these two sectors. Some other prominent gainers were Aban, Karnataka Bank, Pantaloon, IDFC, ABB, Tech mahindra, REC, GVK, Kotak and Yes bank. Some of the yesterday’s gainers met with profit taking and shed some weight. The list includes Tata Com, Lupin, Havells, GAIL and Renuka sugars.
Nifty gained for the third consecutive day which is a rare occurrence in the present volatile scenario. But, that also means that Nifty is now staring at strong resistance zone of around 5540-50. Nifty has not managed a close above 5540 in current month despite few attempts. Nifty has seen base building over last two months and as we did mentioned earlier also, close above 5540 and then a decent follow up could open up 150-200 points upside. Again, banks are the key and Bank Nifty is on the verge of a sharp and strong breakout above 11200. Realty counters are showing interesting patterns and stocks like Sobha, HDIL, Orbit, IB Real and Unitech could see substantial upside once they manage to sustain current levels. Dish TV closed above Rs 64 and could target Rs 71-72 over next few sessions. Ambuja Cement managed to close above 133-135 resistance zone after a gap of about 10 weeks and likely to target 146-149. Banks that have bullish patterns are Kotak, Indusind and Yes Bank.
Nifty now has support around 5460-70 and then around 5420 while strong momentum is likely once Nifty sustains above 5550-65.
Nifty gained for the third consecutive day which is a rare occurrence in the present volatile scenario. But, that also means that Nifty is now staring at strong resistance zone of around 5540-50. Nifty has not managed a close above 5540 in current month despite few attempts. Nifty has seen base building over last two months and as we did mentioned earlier also, close above 5540 and then a decent follow up could open up 150-200 points upside. Again, banks are the key and Bank Nifty is on the verge of a sharp and strong breakout above 11200. Realty counters are showing interesting patterns and stocks like Sobha, HDIL, Orbit, IB Real and Unitech could see substantial upside once they manage to sustain current levels. Dish TV closed above Rs 64 and could target Rs 71-72 over next few sessions. Ambuja Cement managed to close above 133-135 resistance zone after a gap of about 10 weeks and likely to target 146-149. Banks that have bullish patterns are Kotak, Indusind and Yes Bank.
Nifty now has support around 5460-70 and then around 5420 while strong momentum is likely once Nifty sustains above 5550-65.
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