Saturday, May 9, 2009

The Global Rally Continues !!

Markets the world over have gained substantially in last 30-40 days. Nifty has gained from 2600 to 3600, a whooping 1000 point rise, in such a short span of time. A substantial 40-45% rise in index speaks a lot about where the rally has primarily originated from - the Large cap stocks. Heavy weight stocks like RIL, ICICI, HDFC, SBI, L&T & ONGC have dragged the index to soaring heights. However, even the sectors like rate sensitive Banking, Auto & Real-estate were at the forefront of leading the current rally.

Short-Term Market Strength Signals:

Speaking about market movement in last 1 week, they have largely remained range bound in Nifty 3600-3700 band. The markets looked over-bought around Nifty 3700 levels, which would mean either a consolidation in a narrow range of Nifty 3600-3700 or a pull-back to the nearest support zone i.e., Nifty 3350. Markets have chosen to remain range bound in the narrow range instead of correcting to nearest support zone of Nifty 3350 levels.

This act of consolidation is providing signs of strength & a signal to the fact that bulls are in no mood to let off gains even for a while. Whatever corrections are witnessed are on intra-day basis, giving spurts of opportunities for disciplined traders at the lower end of the narrow band.

On the other hand, markets are showing lots of Resistance on the upside around Nifty 3720 levels. It needs to cross over Nifty 3750 to head upwards for another quick rally. A major hump in the even could have been in the form of Stress test in US for its banking fraternity. The event has passed through without much hiccups and this could act as a trigger to help Nifty move above 3720 in the upcoming week.

Nifty Traders:

Risk-taking Traders can Buy Nifty around 3600-3620 with a SL of 3550 on a closing basis & wait for a break-out from Nifty 3720 for making substantial profits. Risk-averse Traders should wait for a substantial dip to bet for a long position around Nifty 3400-3450 levels with a SL of Nifty 3320 levels on the downside.

Playing within a Narrow Range: Contra Traders who would like to move in opposite trend direction can Short Nifty around 3700 with a SL of 3750 & narrow Target of 3620 on the downside.

Technical Stock Specific Calls:

Before moving forward with fresh calls for traders, first let me update the trading calls provided in my
previous post on this blog for stocks like BHEL, IDFC, PFC, Power Grid, Videocon & L&T.

1) BHEL call stock is active with a buy call in the range of Rs.1550-1630 & SL of Rs.1500.
2) PFC call is also active with 2 consecutive closings above Rs.165 & target of Rs.185.
3) Power Grid call is still not activated as the stocks has not yet managed to close above Rs.105.

4) IDFC call is active as the stock has managed to cross Rs.82 levels for 2 consecutive closing.
5) Videocon call is also active with a SL of Rs.90 & a target of Rs.153.

6) L&T has touched Rs.1000 during a couple of trading sessions & is on its way towards Rs.1050-1100 if markets manage to hold above Nifty 3600 levels.

Fresh Trading Call:

Active Call: Buy Suzlon Energy on every dip in the range of Rs.68-74 with Upside targets of Rs.92 in the short-term & Rs.111 in the medium term. SL for short-term traders to be Rs.66 & that for Medium term traders to be Rs.56 on the downside. The stock has shown unusual strength in the past week by sustaining above Rs.72 with strong volumes. CMP 74/-

Signal Call: Buy Hindustan Construction (HCC) only if it breaks above Rs.65 (SL to be Rs.61) on the upside. Traders with high risk taking capacity can buy the stock even at current price of Rs.61-63 with SL of 55. Targets for all traders to be Rs.72 & Rs.89/- on the upside.

Disclaimer: All data, content and/or reports posted by Viral Rajnikant Dholakia on this site are only for information and educational purpose of visitor/readers of this blog. It does not constitute to be a recommendation/offer/advice to buy or sell assets/securities in any form. Individuals/organizations are requested to take an informed call by consulting their Financial Advisor before acting on any matter/data published on this blog. This blog does not warrant of any kind of accuracy, adequacy and completeness of data, ideas or thoughts published in it. This site and Viral Rajnikant Dholakia assumes no responsibility or liability or loss or damage of any nature for your trading and investment decisions and its consequent results.


equity research said...

The stocks are listed and traded on stock exchanges which are entities a corporation or mutual organization specialized in the business of bringing buyers and sellers of the organizations to a listing of stocks and securities together. The stock market in the United States includes the trading of all securities listed on the NYSE, the NASDAQ, the Amex, as well as on the many regional exchanges, e.g. OTCBB and Pink Sheets. European examples of stock exchanges include the London Stock Exchange, the Deutsche Börse and the Paris Bourse, now part of Euronext.

equity research


hi viral ,

u commented earlier that if nifty has a weekly close of 3550,it may touch 3800-3850 levels.
so do u still recommend that one should ho;d on till 3800.

i have bought the following stocks at these levls.

bhel 1714
idfc 86
india bulss 117
LT 950
sbi 1372
thermax 247
videcon 115

sbi has given magnificent returns .so do u recommened a BUY FOR SHORT TERM.

please help.