DSIJ's Technical Picks: Nifty Struggling At Higher Levels

The NSE Nifty has been rather volatile, with a recovery followed by a downward key reversal. This, in turn, was followed by an upward bar reversal, which has been nothing short of a couple of complete flip-flops. The bounce of the last fortnight did not sustain and ended prematurely, while the current recovery also seems to be getting heavy. A significant amount of resistance can be expected at the 5155-5182 levels. A deeply oversold situation has seen the Nifty change its direction in a jiffy, making it a rather difficult market to trade in. However, it has been rather clearly established that the 4768-4800 level has been a tough nut to crack. Only a weekly close below this level could reverse the current up-move, which has been in motion for six trading sessions. Needless to say, the short-term trend has turned up, but sustainability remains elusive at the higher levels.

Mid- and Small-Caps too have been reflecting a similar sentiment, but once again, the former have fared marginally better than the latter. Banks have been at the forefront and Capital Goods too have caught up on lost time. Consumer Durables, however, have remained shaky and subdued. FMCG has been one of the better sectors, while Pharma continues to face incessant selling. IT continues to amble. Metals have been tardy but are moving up, and Realty has also recovered.

The Nifty has regained some ground after a false start, and could remain choppy and volatile, making it a difficult market to participate in.It would be prudent to wait on the sidelines until the picture clears.

[PAGE BREAK]

BATA INDIA | Sell | CMP - Rs 832.95
1st Target: 753 (4-6 weeks) | 2nd Target: 730 (12-14 weeks) | Stoploss: 873 (cls)

Bata India bottomed out by posting an intra-week low of Rs 171 during the week ended 29th January, 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 740 during the week ended 26th August, 2011. It couldn’t sustain these levels for long, and declined to post an intraweek low of Rs 492 during the week ended 23rd December, 2011. The scrip commenced its uptrend from here, and rallied to peak at an intra-week high of Rs 921.90 during the week ended 1st June, 2012.

Currently, Bata India seems set to stage a down-move after a minor weekly distribution. With even the daily picture looking weak, a further downside from these levels cannot be ruled out.

Trading Pointers:
Indicators: MACD-Sell | RMI-Buy | Stochastic-Sell | ROC-Sell | RSI-Sell
Support: 801, 767 | Resistance: 851, 874
BSE Code - 500043 | 55-Week EMA: 677.71

[PAGE BREAK]

GAIL | Buy | CMP - Rs 336.85
1st Target: 367 (4-6 weeks) | 2nd Target: 383 (12-14 weeks) | Stoploss: 322 (cls)

GAIL peaked at an intra-week high of Rs 224.90 during the week ended 13th February, 2009, and declined to post an intra-week low of Rs 194.50 during the week ended 6th March, 2009. The scrip launched into an intermediate uptrend, peaked at an intra-week high of  Rs 387.50 during the week ended 17th October, 2009, only to enter a corrective phase, and declined to post an intra-week low of Rs 330.60 during the week ended 30th October, 2009. It staged a rally to peak at an intra-week high of Rs 535.85 during the week ended 7th January, 2011, and entered a corrective phase. Currently, GAIL has reversed its direction after receiving significant support at the Rs 310 level. A weekly close above the Rs 340 level would mean the possibility of a further upside from here.

[PAGE BREAK]

GE SHIPPING | Buy | CMP - Rs 259.35
1st Target: 289 (4-6 weeks) | 2nd Target: 301 (12-14 weeks) | Stoploss: 244 (cls)

GE Shipping bottomed out by posting an intra-week low of Rs 142.60 during the week ended 13th March, 2009, commenced a short-term uptrend, and rallied to peak at an intra-week high of Rs 315.90 during the week ended 5th June, 2009. The scrip entered a corrective phase to actually bottom out by posting an intra-week low of Rs 211.95 during the week ended 17th July, 2009. It moved sideways before recovering to peak at an intra-week high of Rs 393 during the week ended 12th November, 2010, only to decline from here.

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

Trading Pointers:

Indicators: MACD-Buy | RMI-Sell | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 254, 241 | Resistance: 269, 286
BSE Code - 500620 | 55-Week EMA: 249.79

[PAGE BREAK]

LUPIN | Sell | CMP - Rs 524.45
1st Target: 464 (4-6 weeks) | 2nd Target: 436 (12-14 weeks) | Stoploss: 554 (cls)

Lupin bottomed out by posting an intra-week low of  Rs 107.40 during the week ended 30th January, 2009, took support at the Rs 110 (support) level, recovered smartly, and peaked by posting an intra-week high of Rs 312.80 during the week ended 31st December, 2009. It declined from here, struggled a bit, and finally overcame its recently-posted high. The scrip then entered a mediumterm uptrend, appreciated to peak at an intra-week high of Rs 574.05 during the week ended 20th April, 2012, and entered a corrective phase.

Currently, Lupin could be commencing its short-term downtrend. With the oscillators looking negative, a further downside from these levels cannot be ruled out.

Trading Pointers:
Indicators: MACD-Sell | RMI-Sell | Stochastic-Buy | ROC-Sell | RSI-Sell
Support: 493, 465 | Resistance: 532, 559
BSE Code - 500257 | 55-Week EMA: 482.35