Nifty Trying To Overcome 5410 Level

NSE Nifty:

The NSE Nifty has moved exactly along the expected lines to stagnate in the near term. Despite multiple attempts, it has not been able to take out the 5330-5410 level. The medium-term outlook remains positive as the Nifty has posted a higher top, higher bottom scenario on the weekly charts. However, it is rather apparent that it needs to close above the 5410 level before any significant progress can be made. This observation also brings us to the reality that a small correction cannot be ruled out, but since the bigger picture seems to be improving, a deep decline (the 5224 level needs to hold) does not seem to visible at the moment.

The Mid-Caps and Small-Caps have remained distinct laggards, and though they have participated in the move, the mainline stocks have clearly stolen a march over them. Banks have not made much headway but Capital Goods have been slightly better this time around. Consumer Durables have remained relatively range-bound, while FMCG has once again posted a fresh all-time high, as has Healthcare. IT has gone from strength to strength. Metals have been one of the weakest sectors around, and Realty too has been at the bottom rung of the ladder.

The Nifty is taking a breather, as was expected. While the outlook remains positive, some near-term turbulence cannot be ruled out. A lot depends on the Nifty overcoming the 5410 level and sustaining above it.

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Alstom India | CMP - Rs 382.35 | Buy

Alstom India bottomed out by posting an intra-week low of Rs 223.70 during the week ended 2nd April, 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 610 during the week ended 23rd October, 2009. It couldn’t sustain these levels for long, and declined to post an intra-week low of Rs 530.05 during the week ended 28th May, 2010. The scrip commenced its uptrend from here, and rallied to peak at an intra-week high of Rs 874.85 during the week ended 8th October, 2010.

Currently, Alstom India seems set to stage an upmove 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: 367, 349 | Resistance: 386, 423
Targets: 1st Target: 412 (4-6 weeks) | 2nd Target: 429 (12-14 weeks)
BSE Code – 532309 | Stoploss: 367 (cls)
55 Week EMA: 417.21

Reliance Capital | CMP - Rs 352.10 | Buy

Reliance Capital peaked at an intra-week high of Rs 437 during the week ended 20th February, 2009, and declined to post an intra-week low of Rs 274.20 during the week ended 13th March, 2009. The scrip launched into an intermediate uptrend, peaked at an intra-week high of Rs 478.70 during the week ended 9th April, 2009, only to enter a corrective phase, and declined to post an intra-week low of Rs 488.35 during the week ended 29th April, 2009. It staged a rally to peak at an intra-week high of Rs 1066 during the week ended 5th June, 2009, and entered a corrective phase.

Currently, Reliance Capital has reversed direction after receiving significant support from the Rs 320 level. A weekly close above the Rs 369 level would mean the possibility of a further upside from here.

Trading Pointers:

Indicators: MACD-Buy | RMI-Buy | Stochastic-Buy | ROC-Sell | RSI-Buy
Support: 346, 322 | Resistance: 369, 386
Targets: 1st Target: 402 (4-6 weeks)  | 2nd Target: 441 (12-14 weeks)   
BSE Code – 500111 | Stoploss: 327 (cls)
55 Week EMA: 384.17

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Tata Chemicals | CMP - Rs 316.60 | Buy

Tata Chemicals bottomed out by posting an intra-week low of Rs 249.10 during the week ended 30th October, 2009, commenced a short-term uptrend, and rallied to peak at an intra-week high of Rs 356.35 during the week ended 7th May, 2010. The scrip entered a corrective phase to actually bottom out by posting an intra-week low of Rs 295 during the week ended 28th May, 2010. It moved sideways before recovering to peak at an intra-week high of Rs 446.30 during the week ended 29th October, 2010, only to decline from here.

Currently, Tata Chemicals 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: 305, 280 | Resistance: 331, 359
Targets: 1st Target: 340 (4-6 weeks) | 2nd Target: 361 (12-14 weeks)
BSE Code – 500770 | Stoploss: 304 (cls)
55 Week EMA: 330.36

Voltas | CMP - Rs 112.50 | Buy

Voltas bottomed out by posting an intra-week low of Rs 40.10 during the week ended 27th March, 2009, took support at the Rs 40 (support) level, recovered smartly, and peaked by posting an intra-week high of Rs 145.80 during the week ended 12th June, 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 262.50 during the week ended 12th November, 2010, and entered a corrective phase.

Currently, Voltas could be commencing its short-term uptrend, and 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: 111, 098 | Resistance: 127, 137
Targets: 1st Target: 128 (4-6 weeks) | 2nd Target: 137 (12-14 weeks)
BSE Code – 500575  | Stoploss: 104 (cls)
55 Week EMA: 115.34

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.