Nifty Surprises With Gains, Faces Major Hurdle

The NSE index witnessed an unexpected up-move from the lower end. The index has surged more than 500 points in the second week of September 2013. The confidence mainly sprang from the currency segment, which saw some good relief rallies in the last few sessions. The INR managed to break a vital resistance of 65 against the USD. After this, the Nifty broke its key technical levels around 5685 and 5730, its 50-day EMA and 200-day EMA levels respectively. On the other hand, the WPI numbers upset the market sentiment. Going ahead, the markets are eyeing further global and domestic cues, including the RBI’s regulatory policy meet.

Most of the sectors rose by over two to three per cent. The Bankex and Auto indices saw excellent up-moves. Capital Goods and Metals also pulled the index higher. Mid-Caps and Small-Caps also provided good support. Consumer Durables, FMCG and Health Care witnessed some sideways movement. The IT index, though, saw some profit booking at the higher levels.

Going ahead, the index is expected to consolidate in a wide range between the technical levels of 5970 on the higher side and 5730 on the lower side. The weekly chart also shows a downward sloping pattern, indicating that the index could see profit booking on highs. On the other side, if the market sustains above the 6050 level, it may be a fresh bullish crossover for further up-move.
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United Spirits | CMP – Rs 2553 | Sell

United Spirits bottomed out by posting an intraday low of Rs 890 as on September 17, 2012, and these levels have been rarely seen since. The stock launched into an intermediate uptrend and registered its 52-week high of Rs 2810 as on July 18, 2013 and topped out by forming a dark cloud cover candlestick pattern. It then entered into a correction phase and touched a low of Rs 1993 as on August 28, 2013. Post correction, it saw a minor pullback, touched a downward sloping trendline and formed a bearish candlestick pattern, which suggests that the stock may fall in the near term. It has recently touched its resistance, as defined by the trendline, and has formed a reversal pattern around this resistance zone.

With the oscillators looking negative, we expect that the stock will be under selling pressure going ahead and may move lower in the coming trading sessions. Therefore, one can initiate a short position in the counter for a downside target of Rs 2350-2250, with a stoploss of Rs 2650.

Trading Pointers:

Indicators: MACD-Buy | RMI-Sell | Stochastic-Sell | ROC-Buy | RSI-Sell
Support: 2530, 2360 | Resistance: 2600, 2650
Targets: 1st Target: 2360 (4-6 weeks) | 2nd Target: 2250 (12-14 weeks)  
BSE Code – 532432 | Stoploss: 2650 (cls)
55 Day EMA: 2384
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Dr Reddy Laboratories | CMP - Rs 2224 | Buy

Dr Reddy Laboratories bottomed out by posting an intraday low of Rs 1616 as on September 27, 2012, commenced an uptrend, and rallied to peak at an intraday high of Rs 1970 on January 25, 2013. The scrip entered into a corrective phase and posted a higher low of Rs 1720 as on March 1, 2013. It resumed its uptrend post correction and made a new high of Rs 2207 as on June 10, 2013, making multiple tops around the Rs 2205-2207 level. However, the stock could not sustain this level and saw a minor correction. Post correction, it resumed its uptrend and made a fresh high of Rs 2405 as on July 15, 2013. The stock is taking support around its previous breakout point and has a minor resistance around Rs 2350. Once it closes above this mark, it may see a fresh breakout and could touch the Rs 2400-2550 levels.

Currently, the stock seems set to continue its upward journey for the 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: 2200, 2150 | Resistance: 2290, 2350
Targets: 1st Target: 2400 (4-6 weeks) | 2nd Target: 2500 (12-14 weeks)  
BSE Code – 500124 | Stoploss: 2100 (cls)  
55 Day EMA: 2213
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Axis Bank | CMP - Rs 1088 | Sell

Axis Bank topped out with an intraday high of Rs 1550 as on May 20, 2013, and posted a Doji reversal pattern. This level has been rarely seen since. The stock entered into a downtrend and registered an intraday low of Rs 1208 as on June 25, 2013. Following this, it entered into a minor pullback rally and registered a double top around the Rs 1355 level as on July 2, 2013. The stock then launched into a downtrend and registered a low of Rs 763.40 as on September 4, 2013. It saw another pullback rally, touched the downward sloping line and formed a Doji reversal pattern, which suggests that this rally is losing momentum.

With the oscillators looking negative, a further downside from these levels cannot be ruled out Therefore, one can initiate a short position for a downside target of Rs 1000-950, with a stoploss of Rs 1160.

Trading Pointers:

Indicators: MACD-Buy | RMI-Sell | Stochastic-Sell | ROC-Buy | RSI-Sell
Support: 1040, 955 | Resistance: 1112, 1160
Targets: 1st Target: 1000 (4-6 weeks) | 2nd Target: 950 (12-14 weeks)  
BSE Code – 532215 | Stoploss: 1160 (cls)
55 Day EMA: 1075.10
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KPIT Cummins Infosystems | CMP – Rs 135 | Buy

KPIT Cummins Infosystems bottomed out by posting an intraday low of Rs 92 as on March 28, 2013. Following this, it entered into a strong uptrend, forming a higher top, higher bottom. The stock hit a fresh 52-week high of Rs 158 as on September 12, 2013, saw a minor correction, and took support at the upward sloping trendline. Going ahead, it may continue its uptrend and may go on to touch a fresh high. One can initiate a long position in the stock with a stoploss of Rs 123 on a closing basis, for a possible up-move to levels of Rs 148-165.

Currently, the stock seems set to continue its uptrend for the 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-Sell | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 131, 123 | Resistance: 143, 147
Targets: 1st Target: 148 (4-6 weeks) | 2nd Target: 165 (12-14 weeks)  
BSE Code – 532400 | Stoploss: 123(cls)
55 Day EMA: 129.80