Nifty Witnesses 6050, May Face Trouble At Higher Levels

The 50-share NSE index broke a bullish crossover after it stuck around the 5900 level in the last couple of weeks. The Nifty not only touched the level of 6050 but also sustained the level. The market moved exactly as per our expectation before its July expiry. In the current market scenario, the index may continue with some positive move and may witness a consolidation phase around 6100. The level of 5970 turns out to be a vital technical support level, which we had mentioned as a bullish crossover in our last update. (Volume 28 Issue # 16)

Among the sectoral indices, IT has outperformed, owing to the good set of Q1FY14 numbers posted by IT companies. It was followed by FMCG and Healthcare, which continued to make a gradual upmove in the fortnight. Oil & Gas and Bankex managed to break their respective hurdles. Mid-Caps and Small-Caps witnessed a small recovery, while most other sectors like Capital Goods, Consumer Durables, Auto and Metals traded sideways, and struggled to break their hurdles during this period.

The overall scenario looks positive from the current level but the index may see trouble at every higher level. For long-term investors, we suggest staying cautious. Going ahead, the level of 6140 level is a major hurdle for the Nifty. If it sustains and closes above this level, we may see a gradual upmove around the 6200 level.
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Tech Mahindra | CMP – Rs 1132 | Buy

Tech Mahindra bottomed out by posting an intraday low of Rs 703.15 as on July 23, 2012 and these levels have rarely been seen since. The stock launched into an intermediate uptrend to peak at an intraday high of Rs 1043 as on October 1, 2012. It couldn’t sustain these levels for long and declined to post an intraday low of Rs 865.5 as on December 7, 2012. The stock entered an uptrend to peak at an intraday high of Rs 1123 as on March 11, 2013 and entered a correction phase. The scrip made a good rounding bottom pattern and a breakout of this rounding pattern was around the levels of Rs 1123-1125 as the stock formed a multiple top around these levels on July 19, 2013 along with a rise in volumes which is a positive sign for the stock.

Currently, the stock seems to continue its uptrend for the medium term. With the daily and weekly 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: 1107, 1095 | Resistance: 1155, 1216
Targets: 1st Target: 1210 (4-6 weeks) | 2nd Target: 1270 (10-11 weeks)  
BSE Code: 532755 | Stoploss: 1070 (cls)
55-Day EMA: 963.09
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Biocon | CMP - Rs 305.65 | Buy

Biocon bottomed out by posting an intraday low of Rs 230.45 as on July 30, 2012 and these levels have rarely been seen since. The stock launched into an intermediate uptrend to peak at an intraday high of Rs 321.8 as on November 16, 2012. It couldn’t sustain these levels for long and declined to post an intraday low of Rs 260.1 as on January 24, 2013. The scrip entered into a trading range and traded in a range of 30-40 for more than six months. On July 16, 2013, it gave a breakout of this narrow range with a big bullish candlestick along with a rise in volumes. After a strong breakout, the stock is now consolidating from the past couple of trading sessions and we may witness a sharp run-up after this minor consolidation phase.

Currently, the stock seems to be into a consolidation phase and a minor hurdle is around Rs 315. Once the stock clears this hurdle and closes above it, a further upside cannot be ruled out.

Trading Pointers:

Indicators: MACD-Buy | RMI-Sell | Stochastic-Buy | ROC-Buy | RSI-Sell
Support: 300, 288 | Resistance: 315, 330
Targets: 1st Target: 330 (4-6 weeks) | 2nd Target: 340 (12-14 weeks)  
BSE Code – 532523 | Stoploss: 288 (cls)
55 Week EMA: 285.51
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Aditya Birla Nuvo | CMP - Rs 1161 | Buy

Aditya Birla Nuvo bottomed out by posting an intraday low of Rs 737.3 as on September 3, 2012 and these levels have rarely been seen since. The stock launched into an intermediate uptrend and made a higher top higher bottom pattern. It topped out by registering an intraday high of Rs 1191 as on January 23, 2013. The scrip couldn’t sustain these levels for long and declined to post an intraday low of Rs 930.15 as on April 8, 2013. The stock entered into a minor consolidation phase and found a strong base around the levels of Rs 930-940. It resumed its uptrend and registered a high of Rs 1132 as on May 20, 2013. The scrip gave a breakout of downward sloping trend line on July 17, 2013 and has continued to sustain above that level, which is a positive sign for the stock.

Currently, the stock seems to continue its uptrend for the medium term. With the oscillators looking positive, a further upside from these levels cannot be ruled out. 

Trading Pointers:

Indicators: MACD-Buy | RMI-Buy | Stochastic-Sell | ROC-Buy | RSI-Buy
Support: 1148, 1110 | Resistance: 1220, 1270
Targets: 1st Target: 1240 (4-6 weeks) | 2nd Target: 1270 (12-14 weeks)  
BSE Code: 500303 | Stoploss: 1110 (cls)
55-Day EMA: 1066.64
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Kajaria Ceramic | CMP - Rs 251.65 | Buy

Kajaria Ceramic has bottomed out by posting an intraday low of Rs 160.6 as on August 31, 2012 and these levels have rarely been seen since. The stock launched into an intermediate uptrend and registered a high of Rs 261 as on December 5, 2012. It could on sustain this level for long and entered into a deep correction to post an intraday low of Rs 175.1 as on March 22, 2013. The scrip made a double bottom around the level of Rs 175-178 and entered into an intermediate uptrend. The stock has made multiple tops in the zone of Rs 257-261. It entered a consolidation mode and has been oscillating between the broad ranges of Rs 230-252.

The recent price action has seen the stock move out of the sideways trading range supported by steady volumes, which signals an end of the consolidation phase. We expect the stock to resume its northward journey once it closes above Rs 261.

Trading Pointers:

Indicators: MACD-Buy | RMI-Buy | Stochastic-Sell | ROC-Buy | RSI-Buy
Support: 250, 243 | Resistance: 261, 279
Targets: 1st Target: 279 (4-6 weeks) | 2nd Target: 295 (12-14 weeks)  
BSE Code: 500233 | Stoploss: 238.5 (cls)
55-Day EMA: 235.09