Archives : NIFTY SUPPORT ZONE 5180 - 5152 - 08/01/2010.

NIFTY SUPPORT ZONE : 5180 - 5152 - 08/01/2010.

  • EVERY DIP A BUYING OPPORTUNITY.

The nature of the current Bull rally is such that after giving a fresh breakout, it enters consolidation mode. In doing so, a new or higher base is established for the rally to move forward. In every uptrend there is a small down move or corrective move which is a necessity for the uptrend to continue, but the nature of this rally is such that instead of a small down move, the market chooses to consolidate for a few days before giving a breakout on the higher side and thus resuming the upward rally. These signs are of a strong bull market and hence every dip is a buying opportunity.

 
  • STRONG SUPPPORT AT 5180-5152.
  • RESULTS SEASON TO KICK OFF NEXT WEEK.
  • TECHNICALLY SPEAKING.
  • INDEX LEVELS:
  • LAST WEEK’S RECOMMENDATIONS:
  • THIS WEEK’S RECOMMENDATIONS:
  • WATCH OUT FOR:
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NIFTY SUPPORT ZONE : 5180 - 5152 - 08/01/2010.

 
  • EVERY DIP A BUYING OPPORTUNITY.

The nature of the current Bull rally is such that after giving a fresh breakout, it enters consolidation mode. In doing so, a new or higher base is established for the rally to move forward. In every uptrend there is a small down move or corrective move which is a necessity for the uptrend to continue, but the nature of this rally is such that instead of a small down move, the market chooses to consolidate for a few days before giving a breakout on the higher side and thus resuming the upward rally. These signs are of a strong bull market and hence every dip is a buying opportunity.

 
  • STRONG SUPPPORT AT 5180-5152.

After giving an Ascending Triangle breakout, the current sluggishness can be called a minor break or a resting period for the market. The market is now moving to touch the breakout line of the Ascending Triangle, before continuing with its uptrend. The targets as per Ascending Triangle and Flag pattern breakout still remains. Please note that Strong Support zone exists for the Sensex around 17378-17304 and for the Nifty between 5180-5152 and as long as these supports are intact the short to medium term uptrend will remain intact.

 
  • RESULTS SEASON TO KICK OFF NEXT WEEK.

Result season starts next week. The market will keenly watch the first quarter results, which should propel the rally further. If there are any negative surprises in the results, the market will definitely punish those companies. It is somewhat interesting to note that Infosys has sold off from higher levels just before the results. Stocks like TCS and Wipro also display similar pattern on the technical chart. Infact it is better for the market to enter the Infosys result light and without high expectations.

 
  • TECHNICALLY SPEAKING.
 

The Sensex opened the week at 17493, made a high of 17790 a low of 17378 and closed the week at 17540. The Sensex closed with a weekly gain of 76 points. Similarly Nifty opened the week at 5200, made a high of 5310, a low of 5167 and closed the week at 5244. The Nifty closed with a weekly gain of 43 points. Both Sensex and Nifty formed a small white body candle on the weekly charts with a longer upper shadow which is indicative of the sluggishness witnessed during the week. Volumes too continued to be lower but that was despite the increase in trading hours by an hour.

 

Both Sensex and Nifty are on its way to achieve the target of the Ascending Triangle breakout given two weeks before. Current phase is just a consolidation with a slight negative bias. Hence the target for the Sensex remains 18740 on the lower side and 19299 on the higher side; and for the Nifty 5586 on the lower side and 5717 on higher side.

 

If we consider the entire fall for the Sensex from 21206-7697, then the next retracement target will be at 78.6% of this fall and which is at 18315. Similarly the 78.6% of the entire fall of the Nifty (6357-2252) falls at 5478. In short, both Sensex and Nifty can be expected to move towards 18315 and 5478 respectively.

 

All the major indicators are in Buy mode and are signaling further momentum. Nifty OI PCR is quite healthy at 1.44. Call writing is visible at 5300 strike and Put writing is seen at strike of 5200. Hence one can presume that the market will move between these two levels in the short term.

 

The Trendline support for Sensex is at 17304-17093. Trendline Resistance is at 17807.

The Trendline support for Nifty is at 5180-5089. Trendline Resistance is at 5319.

 

For the week ahead, Sensex will face resistance at 17735-17991-18314 and will find support at 17476-17304-17093.

  

For the week ahead, Nifty will face resistance at 5308-5368-5394 and will find support at 5214-5180-5152.

 
  • INDEX LEVELS:
 
 S3S2S1CLOSER1R2R3
Nifty5152518052145244530853685394
Sensex17093173041747617540177351799118314
  
  • LAST WEEK’S RECOMMENDATIONS:
 

It was an exceptional week which saw Nalco outperforming by a huge margin. It went up a whopping 26%!!! Only Bajaj Auto missed the target while BEL missed by a whisker.

 
STOCKReco. PriceTgt ReachedLot SizeProfit
Buy Bhel240324352455150Rs.7,800
Buy Nalco417443527575Rs.63,250
Buy BEL194119811974276Rs.9,108
Buy Nag Cons1651771782000Rs.26,000
Buy Bajaj A175417921773200Rs.3,800
    TotalRs.1,09,958
  
  • THIS WEEK’S RECOMMENDATIONS:
  
STOCKCMPSLTgt-1Tgt-2
Buy Cairn306301314322
Buy Grasim2757272727952862
Buy LiC Hsg836825858876
Buy HCC157152165176
Buy Aban 1478144315221576
  
  • WATCH OUT FOR:

 

 

 

Disclaimer : The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. No representations can be made that the recommendations contained herein will be profitable or that they will not result in losses. Readers using the information contained herein are solely responsible for their actions. Information is obtained from sources deemed to be reliable but is not guaranteed as to accuracy and completeness.

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