Stock To trade 01 04 2011

• ITC :- TA Turtle upside breakout in ITC 30 mins chart. Buy with stop loss below 176.
• CAIRN INDIA :- NR7 pattern in Cairn daily chart. Buy above 353, Sell below 348.

And then there were Eight!

Wow! The Nifty has recorded eight consecutive days of gains. Yet, as I have written earlier, this is not a record since in the 2009 bull market, there were 14 consecutive days of gains. So, eight and still counting! The Nifty was choppy today, thanks to the F&O expiry which was scheduled for the day. F&O expiry days are not good days for trading. There was an intraday dip of almost 100 points – a buy on dips opportunity. Such opportunities are coming every day, with the Nifty usually falling 40-50 points intraday before recovering. Manage the risk in Long Positions. With every passing day, there is increased risk in long positions. It is possible that markets can keep on going up day after day, but sooner or later we will have a correction, and, a dip. Traders should ensure that they cut their positions when trend indicators on their charts give a sell signal. Trend indicators include change of direction of ZeroLag MA (21 or 34) , MACD with 17,9,12, Ta-Trend crossover of trendline below signal line, TA-Insync 55-5 crossover of insync line from +45 to below, Trix crosses below its

signal line…. The intra day charts should be at least 15 minutes and higher.

DERIVATIVE PICK

• SHRIRAM TRANSPORT FINANCE (CASH – Rs.796): The stock has almost on the verge of breaking out of a bullish pattern in the daily charts. Buying is advised above Rs.805 for a target of Rs.818 and Rs.829. Higher targets of Rs.838 and Rs.849 is also possible. Stop Loss of Rs.789 should be kept.

• JP ASSOCIATES (CASH – Rs.92.80): Buying is advised above Rs.93.50 for a target of Rs.96 and Rs.98. Higher targets of Rs.102 and Rs.105 is also possible. Stop loss of Rs.88.75 should be kept. The time frame of the trade would be around 8-10 trading sessions for the higher target.

Market Outlook 01 04 2011

Markets celebrated India’s march to WC Finals by extending its amazing rally to eighth successive day. The trading session had its ups and downs as did the Semi Finals match against archrivals Pakistan. Nifty zoomed up by more than 80 points before giving up all its gains later in the day. But, short covering and some 31st March buying by institutions lifted the indices once again towards the close. Nifty ended the session as well as the March series of derivatives at 5833. Nifty gained 570 points in the March series, more than 10% rise. In the last 8 days itself Nifty has put on almost 500 points. Again, it was an all round show though IT heavyweights hogged the limelight. IT index was up 2% as strong rally was seen in TCS and Infosys. Banks witnessed some profit taking at higher levels as Bankex finished the day in negative territory. Some of the top gainers for the session were Adani, RPower, Hexaware, Cummins, HDIL, Reliance Infra, Welcorp, Polaris, Sobha, Apollo Tyres, DLF, Bajaj Auto, ITC, FT and Hero Honda. SBI led the list of losers by shedding more than 3% on heavy volumes.

Some other losers were Indusind Bank, Jet Airways, ABB, HCC, Yes Bank, Educomp, Onmobile, IOB, Ambuja Cement and IVRCL. It was an amazingly good series for the bulls as the sharp rally seen over past 8 sessions may not have been comprehended by even the staunchest bulls. Month of March that is notorious for its bearish undertones provided much needed relief to the eleaguered bulls as Nifty gained around 10%. Nifty is now trading above 5800 and the momentum indicators are now in overbought territory. Nifty has moved past the expected resistance zone of 5730-5770 and now this band should provide short term support to any decline. The rally has been extremely sharp and it would be difficult to take a call on resistances but now the immediate threat to the rally is placed around 5900. Banks have been the leaders thus far and today’s behavior of Banking heavyweights suggests some halt in the uptrend. We are entering a new series and new month and would need to take a fresh guard as far as trading is concerned. Some stocks that have seen fresh breakouts are RPower, HDIL, Hexaware, Hero Honda( above 1610), FT( above 890), Exide( above 143) and RIL( above 1055). Nifty is now trading above crucial levels of 5750-70 and this should provide strong short term support while resistance is seen around 5900.