DSIJ's Technical Picks: Nifty Still Twiddling Its Thumbs

The NSE Nifty has been in suspended animation, so to speak, and despite multiple events out of the way and multiple attempts at a breakout on either side, the range-bound movement continues in an unbroken fashion. The outlook hasn’t changed much, and remains more or less the same. However, what has happened is that the Nifty’s range has become even narrower, as it is moving within converging trendlines. Needless to say, the 5300 level needs to be taken out first before the Nifty makes an attempt at taking out the 5410 level, while support comes in at the 5155-5182 level and the trendline support (Trendline 6 – refer to chart) comes in slightly below the 5100 mark.

Mid- and Small-Caps too have been reflecting a similar sentiment in a rangebound manner. However, the former are clearly stronger than the latter. Banks continue to hold on, while Capital Goods have been one of the weaker sectors. Consumer Durables have been distinctly better over the last fortnight. FMCG has reflected strength to post a fresh all-time high, while Pharma has been one of the better sectors. IT has staged a delayed comeback, and Metals have been subdued but seem to be stabilising. Realty continues to sink further.

The Nifty continues to remain in hibernation mode. While a breakout could come on either side, the current resilience seems to be pointing towards one on the upside. Banks would need to perform in the event of such a scenario unfolding.

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ARVIND | Buy CMP - Rs 86.95
1st Target: 98 (4-6 weeks) | 2nd Target: 105 (12-14 weeks) | Stoploss: 80 (cls)

Arvind bottomed out by posting an intra-week low of Rs 30.15 during the week ended 11th June, 2010, and these levels have rarely been seen since. The scrip launched into an intermediate uptrend to peak at an intra-week high of Rs 74.50 during the week ended 7th January, 2011. It couldn’t sustain these levels for long, and declined to post an intra-week low of Rs 51.50 during the week ended 18th March, 2011. The scrip commenced its uptrend from here, and rallied to peak at an intra-week high of Rs 111.15 during the week ended 4th November, 2011.

Currently, Arvind seems set to stage an up-move after a decent weekly consolidation. With even the daily picture looking better, a further upside from these levels cannot be ruled out.

Trading Pointers:
Indicators: MACD-Sell | RMI-Sell | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 81, 73 | Resistance: 92, 106
BSE Code - 500101 | 55-Week EMA: 81.33

PANTALOON RETAIL | Buy CMP - Rs 187.75
1st Target: 217 (4-6 weeks) | 2nd Target: 229 (12-14 weeks) | Stoploss: 172 (cls)

Pantaloon Retail peaked at an intra-week high of Rs 207 during the week ended 13th February, 2009, and declined to post an intra-week low of Rs 105.30 during the week ended 13th March, 2010. The scrip launched into an intermediate uptrend, peaked at an intra-week high of Rs 360 during the week ended 5th June, 2009, only to enter a corrective phase, and declined to post an intra-week low of Rs 252.05 during the week ended 17th July, 2009. It staged a rally to peak at an intra-week high of Rs 527.90 during the week ended 8th October, 2010, and entered a corrective phase.

Currently, Pantaloon Retail has reversed its direction after receiving a significant support from the Rs 160 level. A weekly close above the Rs 190 level would mean the possibility of a further upside from here.

Trading Pointers:
Indicators: MACD-Buy | RMI-Buy | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 175, 160 | Resistance: 195, 218
BSE Code -523574 | 55-Week EMA: 217.74

TVS MOTOR | Buy CMP - Rs 41.00
1st Target: 47 (4-6 weeks) | 2nd Target: 50 (12-14 weeks) | Stoploss: 38 (cls)

TVS Motor bottomed out by posting an intra-week low of Rs 19.60 during the week ended 17th July, 2009. It commenced a short-term uptrend, and rallied to peak at an intra-week high of Rs 40.88 during the week ended 22nd January, 2010. The scrip entered a corrective phase to actually bottom out by posting an intra-week low of Rs 29.40 during the week ended 26th February, 2010. It moved sideways before recovering to peak at an intra-week high of Rs 87.45 during the week ended 26th November, 2010, only to decline from here.

Currently, the scrip seems to be on the verge of commencing a higher top, higher bottom formation on the daily charts, indicating the possibility of a further upside from these levels.

Trading Pointers:
Indicators: MACD-Sell | RMI-Sell | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 38, 34 | Resistance: 43, 48
BSE Code - 532343 | 55-Week EMA: 51.61

PIPAVAV DEFENCE | Buy CMP - Rs 83.40
1st Target: 93 (4-6 weeks) | 2nd Target: 97 (12-14 weeks) | Stoploss: 78 (cls)

Pipavav Defence bottomed out by posting an intraweek low of Rs 51.85 during the week ended 11th February, 2010. It took support at the Rs 82 (support) level, recovered smartly, and peaked by posting an intra-week high of Rs 88.70 during the week ended 9th April, 2010. The scrip declined from here, struggled a bit, finally overcame its recently-posted high, and entered a mediumterm uptrend. It appreciated to peak at an intra-week high of Rs 119.95 during the week ended 3rd September, 2010, and entered a corrective phase.

Currently, Pipavav Defence could be continuing its short-term uptrend. With the oscillators looking positive, a further upside from these levels cannot be ruled out.

Trading Pointers:
Indicators: MACD-Buy | RMI-Buy | Stochastic-Buy | ROC-Sell | RSI-Buy
Support: 80, 74 | Resistance: 88, 96
BSE Code - 533107 | 55-Week EMA: 76.64