Nifty Remains Volatile, Expect Further Downside
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The NSE witnessed large moves on both ends in the fortnight gone by. The index made a low at the 5120 level and then saw a massive recovery to cross the 5500 mark. The currency index too faced some very choppy sessions and made a new low as it breached the 69 level on August 28, 2013. On another front, the GDP numbers and manufacturing PMI data are also indicating that the IIP figure will be lower than anticipated. The sentiment will continue to remain negative ahead till any of the moves taken by the regulator or the government to stem the rupee’s fall achieve their intent.
Most of the sectoral indices traded along the same lines as the Nifty. Metals and IT were outperformers in this scenario. Bankex, though, was the most volatile. Oil & Gas crashed over the crude oil impact. Mid-Caps and Small-Caps consolidated in a wide range. Consumer Durables, Capital Goods, Healthcare and FMCG struggled to recover from the bottom but were hammered.
The market took a deep dive by more than 3.5 per cent on September 3, 2013. The Nifty index broke its weekly 200-day EMA (5450) with tremendous volumes. This definitely indicates some more down-move going ahead. The index may take vital support at the technical levels of 5200-5100. If it does not manage to hold on to these levels, it may dip below 5000.
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Tata Chemical | CMP: Rs 247 | Sell
Tata Chemicals witnessed an intraday high of Rs 381.50 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 260.25 as on August 25, 2013. The stock took support near its trendline and formed a hammer which is a trend reversal pattern. It managed to bounce back from its support levels and formed a multiple top around the levels of Rs 290-293. Recently the stock has broken its strong support as defined by its trendline and is now facing stiff resistance around the trendline. Going ahead we expect the stock to be under selling pressure and it may touch lower levels in the coming trading sessions. With the oscillators looking negative, a further downside from these levels cannot be ruled out. Therefore, one can initiate short position for a downside target of Rs 1,050-1,000 with stop-loss of Rs 1,200.
Trading Pointers:
Indicators: MACD-Buy | RMI-Sell | Stochastic-Sell | ROC-Sell | RSI-Buy
Support: 238, 220 | Resistance: 253, 260
Targets: 1st Target: 225 (4-6 weeks) | 2nd Target: 210 (12-14 weeks)
BSE Code – 500770 | Stop-loss: 264 (cls)
55-Day EMA: 267.30
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MindTree | CMP: Rs 1,055 | Buy
MindTree bottomed out by posting an intraday low of Rs 600 on November 6, 2013; commenced a major uptrend; and rallied to peak at an intraday high of Rs 929.50 on April 3, 2013. The scrip entered into a corrective phase and posted a low of Rs 782.25 on June 18, 2013. It then resumed its uptrend post the correction. The stock had made multiple tops at around the level of Rs 925-930 and on July 19, 2013 gave a breakout of multiple tops to enter into fresh territory. The stock post that breakout is making a higher tops and higher bottom pattern, which is considered a bullish pattern. It may touch levels of Rs 1,150-1,200 in the short term. Currently the stock seems to continue its upward journey for a long-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-Buy | Stochastic-Buy | ROC-Buy | RSI-Sell
Support: 970,920 | Resistance: 1070,1140
Targets: 1st Target: 1150 (4-6 weeks) | 2nd Target: 1200 (12-14 weeks)
BSE Code – 532819 | Stop-loss: 920 (cls)
55-Day EMA: 946.70
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Bharat Forge | CMP: Rs 242 | Buy
Bharat Forge bottomed and then topped out by posting an intraday high of Rs 314.90 on October 4, 2012, and posted a double top along with a dark cloud cover at a level that has rarely been seen since. The stock entered into intermediate downtrend and registered an intraday low of Rs 195.10 on March 28, 2013. It entered into a minor pull-back rally and registered a high of Rs 248.35 on May 8, 2013. The stock than launched into a downtrend and registered a low of Rs 185.30 on August 6, 2013 and made a double bottom with a bullish engulfing candlestick, following which it entered into an intermediate uptrend. The stock witnessed a breakout of long-term downward sloping trendline along with rise in volume. After this breakout it has entered into a consolidation phase, managing to hold on to trendline support. We expect the stock to resume its northward journey post this consolidation. 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-Sell | ROC-Buy | RSI-Buy
Support: 235,223 | Resistance: 252, 267
Targets: 1st Target: 260 (4-6 weeks) | 2nd Target: 280 (12-14 weeks)
BSE Code – 500493 | Stop-loss: 223 (cls)
55-Day EMA: 223.30
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Lupin | CMP: Rs 819 | Buy
Lupin bottomed out by posting an intraday low of Rs 539 on October 11, 2012. The stock, post registering a low, entered into a consolidation phase for more than six months and traded in a narrow range of 60-70 points. It witnessed a breakout from the trading range in May 2013 and entered into a long-term uptrend, registering an intraday high of Rs 907.95 on July 19, 2013. This level has rarely been seen since then. The stock entered into a short-term correction phase and registered a higher low at Rs 742.55 on August 28, 2013, following which it has resumed its uptrend with correction on declining volumes. Currently the stock seems to be continuing its uptrend for a long 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-Buy | Stochastic-Buy | ROC-Buy | RSI-Sell
Support: 808,740 | Resistance: 860,910
Targets: 1st Target: 880 (4-6 weeks) | 2nd Target: 910 (12-14 weeks)
BSE Code – 500257 | Stop-loss: 740 (cls)
55-Day EMA: 809.80