Technically, Nifty has established a weekly close above 200 DMA levels which is perched around 3450. Though, for a confirmation of this trend of sustenance of Nifty above crucial Resistance of 200 DMA, we will wait to determine a weekly close above 3500 for the upcoming truncated week.
A weekly close above Nifty 3500 levels would mean an uptrend which could stretch as high as 3850-4250 on the upside. On the downside, Nifty has a strong support at 3300 and 3120. In my previous to previous post dated April 10, 2009 following content was posted for readers on Nifty Technicals:
CURRENT MARKET TECHNICALS:
We have successfully crossed crucial levels of Nifty 3240 which acted as a strong resistance for the last 5 and half months. This level of 3240 proved resistance for 4-5 times in the last few months. Now, the next resistance is at Nifty 3450 level which incidentally is an all important 200 DMA levels.
CRUCIAL 200 DMA RESISTANCE:
Now, markets shall take a breather for some time around current levels or within a narrow Nifty range of 200-300 points lower from here as a pull back approach. Then again, markets are likely to re-test Nifty 3450 (for 1 or 2 times) to check its resistance strength. If in final analysis, markets succeed in crossing crucial Nifty 3450 level, we may well be in for a surprise rally towards Nifty 3850-4250. These ultimate targets of Nifty 3850-4250 may well be the highest point of current bear market rally, if we succeed to cross over 3500.
INTERVAL TIME FOR TRADERS:
Traders can remain cautious around Nifty 3400-3500 levels. They can book some gains around 3400 levels and wait for the volatility and pull back to fall out. They can again retain their long position if Nifty 3500 are crossed over which may engulf a new round of short-term rally. Nifty 2900-2950 should be an absolute Stop Loss for all kind of intermediate Long positions for the trading fraternity.
A 'Contra' call for traders would be to short the Nifty around 3400 levels with a Stop Loss of 3500 & book gains with initial target of 3240-3120.
As mentioned above, the markets faced resistance at Nifty 3410 and pulled back to 3310 for couple of days. Again markets have come back to re-test the crucial 200 DMA resistance and almost managed to sustain with a weekly close above it on the back of strong hold from bulls.
Nifty Traders: Traders can go Long on Nifty in around 3450-3500 range (preferably above 3500 closing) with upside Targets of 3850-4250 & observe a Strict Stop Loss of Nifty 3300 levels. Please note that the Stop Loss to be observed on Closing basis.
Stock Specific Trends:
In the same posting, i have made a narration of few more stock specific trends especially large-caps and mid-caps. Most of these stocks were predicted to have been topped out in short-term unless Nifty makes a fresh up move above its 200 DMA resistance.
SIGNS OF TIRING OUT:
These stocks are expected to take a small breather if the current rally is, in deed, to continue forward even from here: Reliance, Grasim, ONGC, Hero Honda, Bajaj Auto, Tata Steel among large-caps.
All the above stocks except Grasim (which inched a bit higher in last 1 week) seemed largely stuck to their ground as most of them had rallied sharply in the recent run up of markets as a whole. RIL continues to remain perched around Rs.1700-1800 levels, ONGC is stuck around Rs.800-900 and Hero Honda remains bound in 1000-1150 range in spite of better than expected results. Tata Steel made a high of around Rs.290 and slipped to Rs.240 odd only to recover around Rs.260.
Though, these stocks are likely to further their winning streak if Nifty manages to sustain and move forward above 3500 levels. These stocks will slowly move to make higher tops but at a slower pace than other markets laggards.
DARK-HORSES FOR SHORT-TERM RALLY:
Stocks to watch out for sharp bounce in the upcoming times are Bajaj Finserv, IDFC, LIC Hsg, Patel Engineering, I.Bull Finance, Videocon Industries, A.B.Nuvo, Thermax, R.Comm, SBI & BHEL. This mix of large-cap & mid-cap stocks have not moved up appreciably as compared to other stocks. And there is every possibility that they move faster to catch-up with their lag against the market on the back of their buoyant fundamentals.
The above writing has presence in my same posting dated April 10, 2009. Bajaj Finserv, LIC Hsg, Thermax, Rcom, SBI and BHEL have moved at a faster clip in the last 15 days of market movement. While SBI has graduated from Rs.1000 to Rs.1300, Bajaj Finserv has rised from Rs.150 levels to Rs.230 levels. LIC Hsg Finance has moved exuberantly from Rs.230 to Rs.340 at yesterday's closing. IDFC has witnessed a sharp run up from Rs.50 to Rs.75 during the period.
In my previous post dated April 15, 2009 on Implication of Satyam Acquisition, a clear cut Sell call was given for Tech Mahindra around Rs.370-380 zone. The stock had slumped to Rs.310 levels before recovering to Rs.340 along with markets.
Trading Ideas for Upcoming 15 sessions:
1) IDFC: This company from NBFC space has run up smartly from Rs.60 to reach Rs.75-78 range. If IDFC manages to conquer Rs.82 levels as a weekly close, it will graduate swiftly to its next target of Rs.95-109 in a quick period of time on the back of break-out on the upside. CMP Rs.75.
2) BHEL: Heavy Engineering major BHEL can be bought around Rs.1550-1630 with a Target of 1800-1950. Strict Stop Loss of 1500 is a must for trading in this Power Equipment major. CMP Rs.1639.
3) Videocon Industries: Buy Videocn in the range of Rs.105-120 with a quick target of Rs.150-160 with in few sessions. Strict Stop loss for this diversified conglomerate should be placed at Rs.90. CMP Rs.122.
4) Power Finance Corporation: If this Power Finance company sustains above Rs.160 for 2 consecutive days it will witness a break out for Targets of Rs.185-195. Stop loss for this stock can be observed around Rs.140-145. CMP Rs.157.
5) Power Grid Corporation: Power Transmission major PGCIL would witness a break out if it manages to sustain above Rs.105 for next week closing. The stock can later on soar to Rs.120-130 without much patience. Stop Loss Rs.90. CMP Rs.100.
6) L&T: This E&C giant is most likely to cross Rs.1000 & touch Rs.1050-1100 if Nifty manages to sustain above 3500 for next week.The stock will lead the rally along with other heavy weights to prop up the markets from here.
7) Investment Idea: Long-term investors can grab Gitanjali Gems if it falls back in the range of Rs.35-55 for some reason. It is a leading mid-cap from Gems & Jewellery space with bright prospects from long-term horizon.
NOTE: Readers are requested to keep any eye on break-out signal levels wherever mentioned specifically in above Trading calls. Like for IDFC, PFC & PGCIL levels to watch out for are Rs.82, Rs.160 & Rs.105 respectively, above which those stocks should witness a break-out. So, short-term trade should be executed only if such signal levels are crossed over.
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