Nifty In A Short-Term Uptrend

The NSE Nifty has moved exactly along the expected lines to stage a brilliant turnaround after taking support at the 5050 level, to enter a short-term uptrend now. A higher top, higher bottom scenario has unfolded on the daily charts, indicating the possibility of a near-term upside. There seems be a virtual roadblock at the 5330-5410 level, and it remains to be seen whether the anticipated supply from this level can be absorbed or not. Multiple gaps have appeared on the daily charts, which just seem to have complicated matters as they provide support or resistance as the case may be.

The Mid-Caps and Small-Caps too have participated in the ongoing up-move, but have been relatively lazy vis-à-vis the Nifty in terms of the upside quantum. Banks have just about participated. Capital Goods have reversed direction to recover again, and Consumer Durables have also remained market performers to move up. FMCG has once again posted a fresh all-time high, as has Healthcare. IT has posted a modest recovery. Metals have been rather lacklustre, and Realty too has struggled but recovered.

The Nifty has been on a strong rebound, and has gained almost 270 points in merely seven trading sessions. However, the speed of the rise remains a bit disconcerting, indicating the need to observe caution at the higher levels.

[PAGE BREAK]

Adani Ports | CMP - Rs 104.65 | Buy

Adani Ports bottomed out by posting an intra-week low of Rs 93.62 during the week ended 6th November, 2009, and these levels have rarely been seen since. The scrip launched into an intermediate uptrend to peak at an intra-week high of Rs 159.88 during the week ended 1st April, 2010. It couldn’t sustain these levels for long, and declined to post an intra-week low of Rs 124.42 during the week ended 21st May, 2010. The scrip commenced its uptrend from here, and rallied to peak at an intra-week high of Rs 185.25 during the week ended 8th October, 2010.

Currently, Adani Ports 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-Buy | RMI-Buy | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 119, 110 | Resistance: 130, 141
Targets: 1st Target: 140 (4-6 weeks) | 2nd Target: 146 (12-14 weeks)
BSE Code – 532921  | Stoploss: 96 (cls)
55 Week EMA: 131.34

Bajaj Hindusthan | CMP - Rs 34.50 | Buy

Bajaj Hindusthan peaked at an intra-week high of Rs 76.65 during the week ended 2nd January, 2009, and declined to post an intra-week low of Rs 39 during the week ended 13th March, 2009. The scrip launched into an intermediate uptrend, peaked at an intra-week high of Rs 80.10 during the week ended 17th April, 2009, only to enter a corrective phase, and declined to post an intra-week low of Rs 69.05 during the week ended 29th April, 2009. It staged a rally to peak at an intra-week high of Rs 242.90 during the week ended 8th January, 2010, and entered a corrective phase.

Currently, Bajaj Hindusthan has reversed direction after receiving significant support at the Rs 29 level. A weekly close above the Rs 38 level would mean the possibility of a further upside from here.

Trading Pointers:

Indicators: MACD-Buy | RMI-Buy | Stochastic-Sell | ROC-Buy | RSI-Buy
Support: 29, 26 | Resistance: 38, 44
Targets: 1st Target: 44 (4-6 weeks) | 2nd Target: 49 (12-14 weeks)   
BSE Code – 500032 | Stoploss: 30 (cls)
55 Week EMA: 40.65

[PAGE BREAK]

Ranbay Laboratories | CMP - Rs 513.10 | Buy

Ranbaxy Laboratories bottomed out by posting an intra-week low of Rs 364.20 during the week ended 7th May, 2010, commenced a short-term uptrend, and rallied to peak at an intra-week high of Rs 467.95 during the week ended 2nd July, 2010. The scrip entered a corrective phase to actually bottom out by posting an intra-week low of Rs 434.55 during the week ended 13th August, 2010. It moved sideways before recovering to peak at an intra-week high of Rs 624.90 during the week ended 12th November, 2010, only to decline from here.

Currently, Ranbaxy Laboratories 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-Buy | RMI-Buy | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 499, 472 | Resistance: 528, 563
Targets: 1st Target: 553 (4-6 weeks) | 2nd Target: 572 (12-14 weeks)   
BSE Code – 500359 | Stoploss: 493 (cls)
55 Week EMA: 480.47

REC | CMP - Rs 206.35 | Buy

Rural Electrification Corporation (REC) bottomed out by posting an intra-week low of Rs 83 during the week ended 20th March, 2009, took support at the Rs 85 (support) level, recovered smartly, and peaked by posting an intra-week high of Rs 225 during the week ended 4th September, 2009. The scrip declined from here, struggled a bit, and finally overcame its recently-posted high. It entered a medium-term uptrend, appreciated to peak at an intra-week high of Rs 409.50 during the week ended 15th October, 2010, and entered a corrective phase.

Currently, REC could be commencing 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-Buy | RSI-Buy
Support: 195, 178 | Resistance: 213, 231
Targets: 1st Target: 236 (4-6 weeks)  | 2nd Target: 251 (12-14 weeks)   
BSE Code – 532955 | Stoploss: 191 (cls)
55 Week EMA: 198.69

Sebi Disclosure: The author is an active market participant and could not only be having positions but could even be having contrary positions in the stocks mentioned above.  
*LEGEND:
•    EMA – Exponential Moving Average.
•    MACD – Moving Average Convergence Divergence
•    RMI – Relative Momentum Index
•    ROC – Rate of Change
•    RSI – Relative Strength Index

*It would be pertinent to note that these are just tools to arrive at a buy or sell decision. There are no absolutes in this sphere, so the best one can do is to minimise losses and let the profits run.

*In the event of a sharp movement materialising in the scrips recommended - both upwards or downwards (the analysis is done on Monday evening based on the week's price movements while market action can only be taken on Thursday) investors would do well to stay away. Despite an active movement in the scrip, if a need arises to trade - investors can use the support/resistance levels as stoploss and/or entry/exit for taking a position in the market.  In spite of the above-mentioned statement, investors are advised to use their own discretion.