Nifty At Crossroads, Consolidation Expected

The NSE Nifty has moved as our expectations, with the market witnessing a sell-off over the past few trading sessions. In the week gone by, the Nifty tanked and slipped to the 5930 levels. It took a dip of around 250 points but is still holding on to the support level of 5900 as we had mentioned in our last update. After the sell-off, the index witnessed a pullback to 6200 but did not manage to hold the gains.

At the current levels, the Nifty is expected to consolidate between the 5950-6200. Once we see a breakout and the index manages to sustain at the higher levels for some time, there is a possibility of a further upside from the current levels.

After witnessing much volatility, the broader market has made a marginal up-move. Mid-Caps and Small-Caps continued their positive momentum, though only marginally so. Banks outperformed again to lead the rally. IT was a smart mover and made gradual progress. Auto and Oil & Gas made new highs, but could not hold their gains. Capital Goods, FMCG and Healthcare were in a consolidation phase. Realty and Metals, however, moved sideways.

In the preceding week, the Nifty has crossed the 6200 level but could not sustain the higher levels. Going ahead, 6240 seems to be a crucial hurdle. The 5930 level seems to be a major support as it is also a 50-day EMA for the index.
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Finolex Industries | CMP – Rs 130 | Buy

Finolex Industries bottomed out on the daily charts by posting an intraday low of Rs 50.05 as on May 23, 2012, and these levels have rarely been seen since. The scrip saw some good consolidation and peaked out by posting an intraday high of Rs 73 on July 6, 2012. It couldn’t sustain these levels for long, and declined to post an intraday low of Rs 54.10. The stock went into a six month long period of consolidation, moving in a range of Rs 59-73. Following this, it broke out of this range along with good volumes. The stock rallied to peak at Rs 130.90 on May 7, 2013 and went into a minor correction phase. On May 24, 2013, it saw a breakout along with good volumes, which is a positive signal for the stock.

Currently, Finolex Industries seems set for an up-move after a decent consolidation. With even the medium-term picture looking better, a further upside from these levels cannot be ruled out.

Trading Pointers:

Indicators: MACD-Buy | | RMI-Sell | | Stochastic-Buy | | ROC-Buy | | RSI-Sell |
Support: 125, 120 | Resistance: 135, 143
Targets: 1st Target: 142 (4-6 weeks) | 2nd Target: 150 (10-11 weeks)  
BSE Code – 500940 | Stoploss: 118 (cls)
55 Day EMA: 106.52
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Rallis India | CMP - Rs 137 | Buy

Rallis India bottomed out on the daily charts by posting an intraday low of Rs 117.50 as on June 25, 2012. After registering a low of Rs 117.50, the stock commenced a long-term uptrend and rallied to peak at an intraday high of Rs 169.95 as on December 4, 2012. It entered into a corrective phase after a strong up-move to actually bottom out by posting an intraday low of Rs 109.55 as on April 1, 2013. The stock is currently trading near its resistance line, and if it sustains above the Rs 144-145 levels it may give a fresh breakout.

Therefore, one can initiate a long position in this counter for an upside target of Rs 150-160, with a stoploss of Rs 128.

Trading Pointers:

Indicators: MACD-Buy | | RMI- Buy | | Stochastic-Sell | | ROC-Buy | | RSI-Sell |
Support: 135, 130 | Resistance: 145, 155
Targets: 1st Target: 150 (4-6 weeks) | 2nd Target: 160 (10-11 weeks)  
BSE Code – 500355 | Stoploss: 128 (cls)  
55 Day EMA: 130.77
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United Spirits | CMP - Rs 2568 | Buy

United Spirits bottomed out by posting an intraday low of Rs 505 as on June 6, 2012, commenced a long-term uptrend, and rallied to peak at an intraday high of Rs 2150 as on November 29, 2012. It entered into a corrective phase to actually bottom out by posting an intraday low of Rs 1708 as on April 5, 2013, and these levels have rarely been seen since. The stock launched into an intermediate uptrend to peak at an intraday high of Rs 2386 as on May 7, 2013, and made a double top around the Rs 2365-2896 level. It couldn’t sustain these levels for long, and after a minor consolidation, saw a breakout along with good volumes. It has sustained its breakout for the past four-five trading sessions and went on to make a fresh high, which is a positive signal.

One can initiate a long position in the stock for a possible target of Rs 2700-2850.

Trading Pointers:

Indicators: MACD-Buy | | RMI-Sell | | Stochastic-Buy | | ROC-Buy | | RSI-Sell |
Support: 2400, 2360 | Resistance: 2660, 2752
Targets: 1st Target: 2700 (4-6 weeks) | 2nd Target: 2850 (12-14 weeks)   
BSE Code – 532432 | Stoploss: 2360 (cls)
55 Day EMA: 2138.84
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Tata Chemicals | CMP - Rs 304 | Sell

Tata Chemicals peaked out on the daily charts after registering an intraday high of Rs 381.50 as on January 9, 2013, and these levels have rarely been seen since. The stock launched into an intermediate downtrend, and declined to post an intraday low of Rs 319.10 as on April 4, 2013. It launched into a short-term uptrend and peaked at an intraday high of Rs 333.5 as on May 2, 2013. The stock then entered into a correction phase, and has seen a continuous fall for the past six trading sessions. It has broken all its important support levels, which suggests that the stock may fall further in the coming trading sessions.

We anticipate that the stock may continue its downtrend as of now. With the oscillators looking negative, a further downside from these levels cannot be ruled out.

Trading Pointers:

Indicators: MACD-Sell | | RMI-Buy | | Stochastic-Sell | | ROC-Sell | | RSI-Sell |
Support: 298, 288 | Resistance: 312, 322
Targets: 1st Target: 285 (4-6 weeks) | 2nd Target: 270 (12-14 weeks)   
BSE Code – 500770 | Stoploss: 325 (cls)
55 Day EMA: 323.24