11:50 June 21, 2010
The Nifty closed at 5262 on Friday facing pressure on the downward side after continuous gains. Week-on-week almost 3% up and month-on-month Nifty has gained 7 %. Obviously the indices looked overbought for the last couple of days and some consolidation/correction was the call of the day. Shorts have been trying to bring the market down however and had not been successful till Friday- that too only a whisker.
Well this is settlement week. The immediate support for the nifty is now 5215. The upper extremity still remains 5330 as the first target and beyond that the previous high 5400. If one were to look at the ratio of buy/sell signals coming up after Friday’s close, the sell signals are higher than buy signals. Given the Yuan news commodities are expected to open up no clear sectoral leadership is visible. Individual stocks are looking strong or weak and the sectors are giving mixed signals. This can change sharply and significantly during the week. If this happens, I will write another piece then. For today R2 -5390, R1-5365, S1-5295, S2-5265.
I have to write about the ADAG/RIL pack which after a stupendous two weeks performance has taken a breather by some sharp profit taking on Friday. RNRL closed at 62.8 and has supports around 58.6. It gains in strength over 64. It has shown a monthly gain of 35% despite the 7% fall on Friday. RCOM has a bearish candlestick formation and has support at 180, again a gain of 35% post 3.7 % fall on Friday, resistance is just below 200. Reliance Infra touched close to resistance of 1198 and rebounded back to 1163. It has support around 1132-1144 zone. Reliance Capital also went close to its 780 resistance and retraced nearly 4% on Friday. It has broken out from 702 levels and that should be a stop loss for traders/short term players. Reliance Industrial Infra also retraced from 1023 resistance though it crossed it shortly. Reliance Industries itself fell on Friday to 1054 after trading at 1080. That move is bearish for Monday morning. For the market to show strength, reliance will have to trade above 1065 zone.
Since there are no sectoral signals, I am giving stocks which are technically looking good to buy and good to sell. Buys- Cummins is giving a breakout, Siemens for 765, L&T from last week will gun for 1840 and beyond that closer to 2000, United phosphorous for around 213, GE Shipping for 316, Financial Technologies for 1415, the whole of FMCG pack is looking good, Exide has given a breakout and any dip looks good to buy for 144, Lanco gaining in strength for 74, SBI will gain strength above 2350 where it is managing to hold, metals should give an up move of ten percent . In the metals pack, it seems the best move will come will be in Sterlite Industries.
Stocks to watch with a positive bias and good to buy on dips technically are BHEL, HCL tech, Infosys, IOB, the ADAG pack, Tata motors, IDFC and TCS.
Stocks which look ready to fall sharply in market weakness are HDIL, Educomp, Bharti and Idea.
Play safe and buy on dips and sell on rallies. Don’t fall in love with stocks when trading. If an investor wants to fall in love with your stocks and hold them dearly for a long time, as with a long term partner have the prudence to choose the right one. Knowledge is strength. Cheers.
JSPL - CMP: 672, SL: 662, TGT: 720
Cummins – CMP: 599, SL: 586, TGT: 640 (2nd TGT 700)
Sintex – CMP: 301, SL: 292, TGT: 315
Exide – CMP: 128, SL:125, TGT: 144
Sterlite – CMP: 678, SL:665, TGT: 720