The Budget week lived upto its reputation of being a volatile one. Volatility began on the Budget day itself as Nifty rallied initially, only to give up most of its gains. But, the day after saw a one sided up move of around 200 points as Nifty moved past 5500. Overall, it was a good week for bulls as indices rallied over 4%. This came against the backdrop of higher Crude prices and a lukewarm Budget. But, the fact that there were no expectations whatsoever from the Budget and there were short positions going into the Budget helped the markets. Auto, FMCG and Banking indices were the top three gainers for various reasons associated to Budget. There were no sectoral losers but the least gains were seen in IT and Oil and Gas. Nifty crossed 5600 briefly on Friday before selling set in at higher levels. Markets have seen a decent rally post Budget but now we are placed just around the strong resistance zone of 5550 to 5600. As mentioned
earlier, it may not be easier to take out this resistance in one go. But, we do believe that market has made a sustainable bottom around 5230 and for the first time since November 2010, we have a higher bottom and now higher top( 5608 on Friday). The resistance at 5600 is likely to be taken out eventually maybe over next 5-7 trading sessions. Any correction should find initial support around 5440-60 and then a strong one around 5350-5375.
The second level is unlikely to be breached and positional traders could take long positions on declines in Nifty as well as bullish counters with positional stop loss below 5340. Clear breakout is seen above 5625 with potential targets of 5770 and around 5900. Banks and Autos have been the leaders in the current rally. One needs to be selective in Autos and we see positive bias in Bajaj Auto and Hero Honda (above 1560). Banking is looking to be in a better shape and one can use dips to accumulate stocks like HDFC Bank, SBI, Yes Bank, Indusind Bank, Allahabad bank, OBC, Canara Bank and BOI. Another important thing to note is that once Nifty stabilizes above 5625 short covering could lift the weaker sectors like Infra and Realty too. Certain other counters that are looking positive and are Buy on dips candidates are L&T, IDFC, Havells,
Cairns and Sterlite.
Nifty has immediate support around 5445-60 and then around 5375-5400 while resistance should be seen between 5570-5610.
Sunday, March 6, 2011
Thursday, March 3, 2011
Todays sentence
Individuals who cannot master their emotions are ill-suited to profit from the investment process. - Ben Graham
Stock to Trade on 04 03 2011
- Andhra Bank :- NR7 bar pattern in Andhra bank. Buy above 144, Sell below 141.
- Siemens :- TA Turtle upside breakout in Siemens 30 mins chart. Buy with stop loss below 850.
- Fin. Technology:- Oversold TA Insync in Financial Tech daily chart. Buy with stop loss below 768.
Market in consolidation.
Nifty Watch:- Today Nifty opened at 5495 with a gap down of 60 points to yesterday close. Nifty quickly made a low at 5482 and then move up to its day high at 5597 with an increase of 115 points to its day low. These up and down movements continued for the rest of the day and Nifty finally closed at 5544 with an increase of 49 points to its open and near yesterday’s close.Overall, we are in a process of consolidation. This consolidation may hold for few days more. The trend is up, therefore, within this consolidation; look for dips only to buy.
Trend:- The short term trend is up. The Intermediate trend remains down, with the Nifty trading below its 200 days (5643) and 50 days (5661) moving average. Both the averages are converging in the 5600 to 5700 area. This zone should provide resistance for some time. TA Insync(55-5) is above the level of -45 and moving up. This indicator is suggesting that nifty uptrend is intact. The indicator is now at 7.10, which is about mid way between its low and +45, the overbought zone. This midway position suggests that there is more upside, but within the next week or so, the indicator will begin to reach the overbought zone. A dip will provide an opportunity to enter this uptrend. After some days, the trend will become mature and further buying may not be possible.
Level:- Looking for support at 5450 . Resistance comes at 5700.
Summary:- We are in contraction phase so nifty will take some time for consolidation and then follow up with a trending move. Since we are in an uptrend, we should expect the next move to be up.
Trend:- The short term trend is up. The Intermediate trend remains down, with the Nifty trading below its 200 days (5643) and 50 days (5661) moving average. Both the averages are converging in the 5600 to 5700 area. This zone should provide resistance for some time. TA Insync(55-5) is above the level of -45 and moving up. This indicator is suggesting that nifty uptrend is intact. The indicator is now at 7.10, which is about mid way between its low and +45, the overbought zone. This midway position suggests that there is more upside, but within the next week or so, the indicator will begin to reach the overbought zone. A dip will provide an opportunity to enter this uptrend. After some days, the trend will become mature and further buying may not be possible.
Level:- Looking for support at 5450 . Resistance comes at 5700.
Summary:- We are in contraction phase so nifty will take some time for consolidation and then follow up with a trending move. Since we are in an uptrend, we should expect the next move to be up.
Market Outlook FOR 04 03 2011
It was a choppy day for the markets as Nifty see-sawed between 5470 and 5570. Nifty opened on a weak note and traded with negative bias in the morning session. But, sentiments recovered and turned for the better on news that Col. Gaddafi has accepted peace moves. Nifty recovered more than 100 points from the day’s lows. But, expectedly selling came in at above 5550 levels as Nifty closed at 5536. Overall, it was a satisfactory day considering the fact that we had gained around 200 points on Tuesday. DCHL was the biggest gainer amongst the derivatives counters as it gained over 14% on huge volumes. Other significant gainers were Sobha, Triveni, Orbit, Renuka, Karnataka Bank, KFA, Godrej Ind, Indian bank, JP Associates, Tata Power, Bhel, L&T and Apollo Tyres. On the losers’ list were S.Kumar’s, Welcorp, IDFC, Sun Pharma, LITL, Hotel Leela, Adani Power, Aurobindo, Reliance Infra and Jain Irrigation. Nifty managed to sustain
and close above 5500. Markets are showing strength and a close above 5550 would be very positive for the short to medium term trend. It may take some time and Nifty might consolidate between 5400 and 5600 for 3-5 days. But, broadly the trend has turned positive and any declines should be used to accumulate positively biased counters. Sustained trades above 5600 could trigger another wave of short covering and that might benefit the badly mauled counters like IVRCL Infra, DLF, JP Associates, LITL and the likes. As of now the large caps HDFC, HDFC Bank, L&T, SBI, Bhel and Bajaj Auto are looking good and should be accumulated for decent trading gains over next 2-4 weeks. JSW Steel has given a breakout above 940 and is likely to target Rs 1025-1040 in next few sessions. Similarly Bajaj Auto has broken out from an inverted
head & shoulders pattern and is looking bullish. Some others that are looking bullish are Godrej Ind( above 177), Apollo Tyres, IOB( above 140), Havells, LIC Hsg( above 202), Wipro( above 448), Kotak and IRB( above 195). Nifty has immediate support around 5445-60 and then around 5375-5400 while resistance should be seen between 5570-5610.
and close above 5500. Markets are showing strength and a close above 5550 would be very positive for the short to medium term trend. It may take some time and Nifty might consolidate between 5400 and 5600 for 3-5 days. But, broadly the trend has turned positive and any declines should be used to accumulate positively biased counters. Sustained trades above 5600 could trigger another wave of short covering and that might benefit the badly mauled counters like IVRCL Infra, DLF, JP Associates, LITL and the likes. As of now the large caps HDFC, HDFC Bank, L&T, SBI, Bhel and Bajaj Auto are looking good and should be accumulated for decent trading gains over next 2-4 weeks. JSW Steel has given a breakout above 940 and is likely to target Rs 1025-1040 in next few sessions. Similarly Bajaj Auto has broken out from an inverted
head & shoulders pattern and is looking bullish. Some others that are looking bullish are Godrej Ind( above 177), Apollo Tyres, IOB( above 140), Havells, LIC Hsg( above 202), Wipro( above 448), Kotak and IRB( above 195). Nifty has immediate support around 5445-60 and then around 5375-5400 while resistance should be seen between 5570-5610.
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