Technotracks for the week beginning 24th May 2010

India Infoline News Service | Mumbai |

Three weeks and a completely topsy turvy market greets me back. Summer breaks and markets never seem to get along. Getting back to business,

THREE WEEKS AND A COMPLETELY TOPSY TURVY MARKET GREETS ME BACK.SUMMER BREAKS AND MARKETS NEVER SEEMTO GET ALONG.GETTING BACK TO BUSINESS, 


FRIDAYWHEN NIFTY WAS CLOSING DOW FUTURES WERE IN THE NEGATIVE,EUROPE AFTER OPENINGMILDLY NEGATIVE HAD ATTEMPTED POSITIVE TERRITORY BUT GAVE UP AND WAS AROUND 1.5PERCENT DOWN.DESPITE ALL THAT MARKETS AFTER OPENING AROUND MID 4800 S PULLEDBACK TO EARLY 4900 ESSENTIALLY ON A PULLBACK IN METAL STOCKS AND SOME RECOVERY INBANKING.THERAFTER SINCE DOW AND S&P CLOSED MORE THAN 1PERCENT POSITIVE ANDSUNDAY THE AMBANI BROTHERS SETTLEMENT BEING ANNOUNCED MARKETS CAN EXPECT A FAIRGAP UP ON MONDAY MORNING.THE CRUX WILL BE HOW WILL THE MARKET HANDLE LEVELSCLOSER TO THE 5000 LEVELS WHICH IS NOW MORE PSYCHOLOGICAL THAN TECHNICAL.


PURELYLOOKING AT NIFTY TECHNICALS, THE OSCILLATOR ARE ALL OVERSOLD-BUT THEN THEY CANBE SO FOR LONGISH PERIODS AS WE HAVE SEEN IN 2008/9. THE TREND SATURATION INDEXAS ON FRIDAY WAS ON CLOSE TO SATURATION BUT NOT ON SATURATION POINT.THE REALTEST TO DISTINGUISH BETWEEN A MERE PULLBACK OR A GENUINE STRENGTH WILL BEESSENTIALLY THE 5000 TEST-THE LONGER IT CAN STAY THERE THE STRONGER THE 4850ARD SUPPORT LEVEL BECOME.WORLD MARKETS WHICH WILL HAVE A MAJOR IMPACT CONTINUETO BE PRECARIOUSLY POISED.VOILATILITY AS PER VARIOUS READINGS CAN CARRY ON FORANOTHER WEEK OR TWO ON CURRENT NEWS IMPACT.EVERY NEWS IMPACT HAS RIPPLES LIKETHAT OF A STONE THROWN INTO A POND AND THE CURRENT GREECE ONE SHOULD HAVE RUNITS COURSE END MAY/BEGINNING JUNE-CAN THERE BE ANOTHER STONE THROWN INTO THEPOND IS ANYBODYS GUESS-HAVE CHECKED MY OWN NIFTY LONG TERM SYSTEMS AND THAT OFOTHER FELLOW SYSTEM TRADERS-IF THE NIFTY FALLS NEXT WEEK AND CLOSES LOWER THANFRIDAY S LOW (BELOW 200DMA TO MAKE IT SIMPLE) AT END OF MONTH MAY THEN LONGERTERM TRADING SYSTEMS WHICH ARE YET POSITIVE MAY TURN NUETRAL TO CLOSEPOSITIONS.THE

MONTHLYCLOSING FOR MAY THEREFORE BECOMES AN IMPORTANT FIGURE TO WATCHOUT FOR.

4950,4970AND5011 WILL BE RESISTANCE LEVELS FOR MONDAY TRADING ANSD 4866 SUPPORT 
ZONE.MONTH ON MONTH THEINDEX HAS LOST NEARLY 6%,WEEK ON WEEK ABOUT 3%.YEAR ON YEAR WE ARE NOW ONLY 17% UP.

THE10DAY SMA IS 5068 AND EMA IS 5037-WHICH WILL BE ACING AS SUPPLY ZONE.THE 20DAYSMA AND EMA ARE ABOVE 5100 AND NEED TO BE LOOKED INTO IF THE 5000 LEVEL HOLDSUP AND THERON THE 50 DMA ARE FURTHER HIGHER.THE 200 DAY SMA IS 4990 AND EMA IS4895 WHICH ARE MORE CRUCIAL IN NATURE.THIS 95 POINT TRADING RANGE IF HELD CANPROMISE STABILITY TO THE MARKETS 

SECTOR WISE NOT REALLY GOING INTO MUCH DEPTH-JUST RUN YOU THROUGH SOME STOCKSFROM EACH SECTOR WHICH LOOK GOOD TO PLAY FOR THE PULLBACK

BANKING AND FINANCIALS-BOB@682 WITH SL OF 665 FOR 720.SMALLER BANKS LIKE

DENA,UNITED,VIJAYASHOWED ACTION BUILDING UP TOWARDS THE END AND MAY MOVE FUR THE UP.IFCI CHARTREFLECTS A BULLISH ENGULFING PATTERN WHICH CAN HAVE POSITIVE MANIFESTATIONS ON MONDAY 

METALS-HINDALCO FOR A PULLBACK WITH A SL OF 147.8 FOR 159.JINDAL STEEL ANDPOWER HAD A BULLISH ENGULFING PATTERN ON FRIDAY INDICATING SHORT COVERING ANDSOME FRESH BUYING.HAD GIVEN A BUY CALL ON TATA STEEL, STERLITE AND HIND ZINCTOWARDS END OF FRIDAY TRADING-BTST-SINCE METALS WERE LOOKING POISED FOR A PULLBACK –WILL PROBABLY SEE THE MARKETS FOR THE FIRST HALF HOUR TO DECIDE WHETHERTO BOOK PARTIAL/FULL PROFITS OR TO CONTINUE TO HOLD

JAINIRRIGATION REMAINED STRONG AND LOOKS GOOD AS AN INVESTMENT STOCK-IF ITCONTINUES TO HOLD THE 950 LEVELS THEN IS POISED FOR 1025 IN THE SHORT TERM AND1120 IN THE MEDIUM TERM

OILAND GAS-NOW THIS SHOULD BE BUZZING ON MONDAY-RELIANCE SHOULD REACT POSITIVELYTO THE NEWS-CAN IT DON THE LEADERS HAT? GAIL HAS BEEN AND WAS ON FRIDAYEXHIBITING STRENGTH AT 450+,MRPL,CHENNAI PETRO,HP,GUJ GAS ALL GIVING SHORT TERMBUY SIGNALS

REALESTATE-PRIME PULL BACK CANDIDATE DLF@ 269 SL 263 TGT 286.

PHARMA HAS BEEN THE MOST NEWS DRIVEN SECTOR AND PIRAMAL WAS THE ACTION STORY ONFRIDAY WHICH CLOSED NEGATIVE ON A BUY ON RUMOUR ,SELL ON NEWS STRATEGY.MOSTBROKING HOUSES WILL COME OUT WITH A DETAILED BREAK UP ON MONDAY WHICH WILL NOWLEAD PRICE DIRECTION.OPEN INTEREST FOR JUNE SERIES FOR THIS STOCK WILL ALSO BEAN IMPORTANT INDICATER.THE BIAS SEEMS TO BE POSITIVE POST A DRASTIC SELL OFF ONFRIDAY.LUPIN AT 1814 AND DR REDDY@1310 SEEM TO BE BREAKOUT STOCKS TOO.STRIDESARCOLAB LOOKING GOOD AT 358

THAT BRINGS US TO INFRA/CONSTRUCTION-BADLY BEATEN UP-JP ASSOCIATES SHOWED FIRSTSIGNS OF BOUNCING AFTER THE RELATED LISTING.LANCO@57 LOOKS GOOD FOR 60 WITH ASL OF 55 ITC CLOSED CLOSE TO BREAKOUT LEVELS-273+IS CRUCIAL,UNITED SPIRITS LOOKSGOOD FOR A PULL BACK.

ADAG PACK AS SUCH OVERSOLD AND THE GROUP AS SUCH CAN HAVE A POSITIVE IMPACTFROM THE NEWS -  SERIOSLY OVERSOLD STOCKS-ABAN,BAJAJ HINDUATAN,DLF,HINDALCO,PUNJ

LLOYD,RCOM, STERLITE, SUZLON AND TATA STEEL-THERE ARE MANY MORE OVERSOLD STOCKS BUTTHESE LOOK SAFER FOR A BOUNCE

STOCKS WHICH ARE WEAKER AND IF MARKETS DON’T HOLD UP REMAIN SHORTINGCANDIDATES-SPICE JET,APOLLO TYRES,BALRAMPUR CHINI,JSW GRP,EDUCOMP,HCC,GUJNRE,INDIA CEM,ESSAR OIL,CAIRN,S KUMAR.

FORINVESTMENTS PICK UP STOCKS WHICH SURVIVED THE FALL BETTER-THEY CAN SPRINT ONCETHE STORM IS OVER-THE QUESTION IS –IS IT OVER-WE SHALL KNOW SOON-HAVE A GREATTRADING DAY AND WEEK AHEAD-TRADE SAFE

 

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