Archives : NIFTY TARGET 4767-4569 - 30/05/2008.
NIFTY TARGET 4767-4569 - 30/05/2008.
Last week we said the Sensex had formed a Black Opening Marubuzo on the weekly charts, which will have bearish implications and it did just that. Market started off in a very nervous way and started losing the battle to the bears. Bears started to dominate the proceedings. Now there is a chance that the market may pull back somewhat, but only to fall later. The Nifty has given a diamond breakout and the target for this breakout is 4767 and 4569. So treat every rise as a shorting opportunity. Any rise till 5032 will be termed as a bear rally; where selling will take place and market will not be able to sustain at higher level.
STRONG GDP NUMBER, INFLATION ABOVE 8%.
SENSEX.NIFTY.STRONG GDP NUMBER, INFLATION ABOVE 8%.
The GDP growth for financial year 2008 has been revised to 9% from 8.7% earlier. Strong 8.8% Q4 GDP growth is positive and beat all the street expectations. But the question is can it be maintained? If oil continues its upward journey, then global slowdown will certainly affect growth stories like ours. Inflation figure reported was 8.1% v/s 7.81% last week. Inflation will certainly be giving the FM sleepless nights. The RBI may now hike the interest rates as the GDP growth was quite good. Watch out in the next week.PANIC ROLLOVERS.
The market wide rollover was at 82%. The Nifty Rollover was lower at 66% v/s 71% for the previous month. Nifty Open Interest Put Call Ratio was 2.08% v/s 1.39% at the start of the previous month. High OI PCR indicates bullishness, but there is a very high amount of put writing at the strike of 4800. This has led to very high PCR. Strong Rollovers were witnessed in stocks like Idea, Bharti, IFCI, RPL and Ispat.SENSEX.
Sensex opened the week at 16468, made a high of 16666, made of low 16196 and closed the week at 16415. Weekly loss was 234 points. On the weekly charts, Sensex has formed a morning star pattern, which is bullish, but on confirmation that the low 16196 of this week should not be breached. The Sensex has just managed to close above the 50dma, which is at 16398. The Trendline Resistance is at 17120-17233-17553. The Trendline Support is at 15494-15250. Thus the Resistance for the week ahead is at 16666-16920-17258-17531. Support is at 16196-15845-15494.
Nifty took support at 4801 and rebounded and closed the week at 4870. The weekly loss was 76 points. The Nifty has given a diamond breakout and the targets are 4767 and 4569. The MACD has given a sell signal and is on the verge of turning negative. The ROC is already negative. The Trendline Resistance is at 5032-5111-5133. The Trendline Support is at 4767-4738. For the week ahead Resistance is at 4909-4957-5032-5111. Support is at 4801-4767-4738-4628-4569.
HOW TO TRADE?
One can Buy Divis Lab 1481 for a target of 1527-1549-1620 and hedge with Nifty future. One can also construct a BEAR Spread for RPL 175. The targets are 165-154.
LAST WEEK’S RECOMMENDATIONS:
Once again we were 100%. All our recommendations did extremely well. The star was Tata Chemicals.
TATA CHEMICALS @ 383 TGT WAS 401 REACHED 440.
TATA ELXSI @ 203 TGT WAS 217 REACHED 219.
PSL HOLDING TGT WAS 394 REACHED 394.
SUZLON @ 294 TGT WAS 311 REACHED 311.
GITANJALI @ 306 TGT WAS 320 REACHED 316.
THIS WEEK’S RECOMMENDATIONS:
GUJ ALKALI 196 SL 190=2 TGT 204-208-216.
L&T 2982 SL 2883 TGT 3097-3115-3177.
DIVIS LAB 1481 SL 1450 TGT 1527-1549-1620.
BHUSHAN STEEL 909 SL 867 TGT 970-1004.
MINDTREE 467 SL 455 TGT 480-492.
SELL RPL 173 SL 178 TGT 165-154.
SELL MARUTI 764 SL 782 TGT 751-725.