Stock To WAtch 28 03 2011

• PFC :- Bullish reversal 3 white solders pattern in PFC daily chart. Buy with stop loss below 240.
• GTOFFSHORE :- NR7 pattern in Great Offshore from last 3 days. Buy above 248.50, Sell below 241.50

BIG UP MOVE IN NIFTY BRINGS INDEX ABOVE 5600 RESISTANCE

On Thursday, the Nifty made an NR7 day. In our letter we suggested that Friday may see a trending move and traders should follow the intra day trend. Friday’s big rally in the Nifty has taken the Index above 5600. It has also changed the trend of TA-Insync which we track to identify the intermediate trend. Now, the Nifty has broken out of the 5400 – 5600 range, this time on the upside. On Monday, the Index was trading below the range support of 5400. The Market has given two moves out of the range, first down, then upside break on Friday.

Will this breakout be sustained? The Nifty has rallied from 5350 to 5650 in just five trading days. After such strong moves, markets are likely to consolidate. We will wait for the process of consolidation. If the Nifty moves up after the soon-to-come consolidation, then the trend certainly changes to up.

DERIVATIVE PICK 28 03 2011

• AXIS BANK (CASH – Rs.1364.95) : The stock has closed on a very strong note and after a very long timehas given a bullish breakout by piercing and closing above the crucial resistance line. The 14 day RSI toohas broken out of an ascending triangle pattern and has crossed the crucial 60 level giving strength to theprice pattern breakout. Buying is advised above Rs.1371 for a target of Rs.1394 and Rs.1412. Higher targetof Rs.1435 and Rs.1452 is also possible. Stop Loss of Rs.1334 should be kept. The time frame of the tradefor the final target would be around 8-10 trading sessions.
  

• JINDAL SOUTHWEST HOLDINGS (CASH – Rs.944) : The stock has closed on a strong note and we areof the view that the worst for the stock is over. Buying is advised above Rs.958 for a target of Rs.982 andRs.999. Higher target of Rs.1029 and Rs.1062 is also possible. The explosive move would come only aboveRs.982. Stop Loss of Rs.919 should be kept.
  

Market Outlook FOR 28 03 2011

Markets opened with a huge positive gap primarily on account of positive global cues and the best past of Friday’s trading was that bulls maintained a firm grip on the whole day’s proceedings and managed to closed on a very strong note. Stock markets mimicked Indian cricket team's all round performance as bulls went on rampage sending stocks across sectors rallying. Heavyweight stocks like Infosys, ICICI Bank and Reliance Industries anchored the BSE Sensex and the S&P CNX Nifty to two-month closing highs. The market breadth was strong. All the sectoral indices on BSE logged gains. Auto stocks were in demand on renewed buying. Banking stocks extended recent gains after the government tabled banking sector amendment bill in parliament. Metals stocks extended Thursday's gain on hopes of higher demand as Japan begins redevelopment after a devastating earthquake and tsunami on 11 March 2011. Software stocks were in demand on encouraging US tech earnings overnight. Fertiliser shares edged higher on reports of higher demand for fertilizer in the upcoming monsoon season.

Nifty will now have to cross the crucial resistance of 200 DMA of Spot Nifty which lies at 5688. There could be a small pause at this level which is just 30 odd points from the current level. We would advise investors and traders to watch this crucial level closely as one can expect short term reaction from this level.

However, any short term correction should be used as a buying opportunity The immediate resistance for Nifty future lies at 5725 and 5765 levels whereas it has short term supports at
5645 and 5610 levels.