Monday, September 14, 2009

Trading Idea: Buy IDFC with SL of 136/-

Short Term Trading Call

Charts Courtesy:

Buy: IDFC (Closing Price- Rs.144)
Accumulation Zone: Rs.142-145
Stop Loss (SL): Rs.136/-
Targets: T1 155, T2 170

Stock View: IDFC has been consolidating in a Narrow range of Rs.128 to Rs.135 zone from August 15 to Sept 04 for a period of about 20 days. The stock jumped out of the range at the onset of 2nd week of September only to consolidate lower in the follow up trading sessions until yesterday. However, today the stock seems to have sought an important support around Rs.136 and the stock bounced back from there giving initial signs of stability. The stock also has an important Support at Rs.136 marked by its 50 EMA Trend line.

However, traders should keep in mind that the stock has a minor resistance at Rs.150 mark which is a resistance zone for the stock for past 4 months. On cross over & sustenance above Rs.150 mark backed by strong volumes, this stock seems set for a ride up to Rs.170-180 over next few months.

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Shalu said...

Hi Viral,
I'm 50% invested and sitting on 50% cash.....when should i look at investing for long term. Short term corrections don't bother me, but i'm not sure which stocks to buy with the corrections that everybody keeps talking about on horizon. Your advice will be highly appreciated.

Viral Rajnikant Dholakia said...

Dear Shalu,

These are times of extreme euphoria. Long term investors should have patience & let this extended period of optimism pass-away.

It is better to partially stay in cash & partially in stocks, as is your situation. This euphoria could reach such higher levels where it sucks in investors on the side lines, and than markets opt for a deep correction.

I feel, you're well invested to the extent of 50% and that you can ride the ongoing rally with as much of your portfolio investments.

The time for deploying your money is a bit far away from now, so hold it with patience or use the cash for some other purpose/asset class.

You can as well opt to do Short-term trading with Strict Stop Losses to make temporary use of Cash.