As mentioned yesterday, Nifty is close to bullish breakout from a pattern having resistance at 5900-5910 & breakout can target 6025-6050 in next couple of sessions. On the other hand, if Nifty is unable to cross this level corrective decline to 5840-5800 can be expected. On larger time frames crucial support exists at 5700 & 5480 whereas important resistance is held at 6250.
Nifty opened with a negative gap of few points despite the fact that most of the global markets were up by 0.5%-1% on the previous day & in the morning session. Nifty remained extremely range bound with intra day high & low as 5906 & 5857 thus giving practically no opportunity to traders because of the narrow range. Select few scrip like banking, metal & IT did make some positive moves but the range was very restricted. Intraday Nifty finally closed at 5874 about 10 points above the previous close.
As far as, extreme short term charts are concerned, Nifty, after rising sharply by more than 600 points i.e. from 5350 to 5945 has tested the resistance zone of 5900-5925 more than 6 times in last 10-11 trading sessions without breaching it successfully. Now this level of 5925 has becme extremely important & if Nifty gives bullish breakout from this level it would be heading for 6025-6050 in coming days. On the other hand, failure to cross this level can invite heavy profit booking due to unwinding of long positions by bulls. At this juncture Nifty can swing in any direction although the odds are in favor of bears.
As far as bar reversal in Daily charts are concerned, stocks like Cairn India, JSW Steel, IRB Infra, Kotak Bank, Aurobindo Pharma, Central Bank of India, Nag Fert., Rashtriya Chem, IOC, Mcleod Russel have given "Upward Bar Reversal" while ICICI Bank, HDFC Bank, Tata Steel, Hindalco, HDFC Ltd., JP Associates, ONGC, Gitanjali, Alok Ind., SAIL etc. have given "Downward Bar Reversal". Stocks like FAG Precicion, TTRF, GATI, Welspun India, Thomas Cook, Vikash Metal, 3 I Infotech, Astra Micro, JHS Svend Gaard, Alembic Lab. have shown spurt during the day with unusually high volumes.
Sector wise, most of the stocks like Welspun India, Astramicro, 3I Infotech, Jubiliant Food, OBC, Amaraja, Tricom, Pipavavyard, Pidilite, Zee News, Amtek India etc. were among the top gainers of the day, to close in positive territory whereas stocks like Atlanta, Balaji Tele, Fame India, Axis Bank. Suzlon, Rain Commodity, Brandhouse, Dewan Housing Finance, DCM, Noida Toll Bridge etc. attracted profit booking at higher levels & closed in red territory. As far as, A/D data is concerned it was in favor of bears in the ratio of 3:4 with 628 advances & 813 declines during the day.
In nutshell, Nifty has tested the resistance of 5900-5925 by more than 6-7 times in last 10-11 trading sessions making it an important resistance zone. Bullish breakout above this level with volumes can target 6025-6050 in couple of sessions whereas failure to cross this resistance can initiate heavy profit booking & termination of EST uptrend which is in force since 21st March 2011. The bias is slightly negative due to the fact that Nifty is overbought with negative divergences & present F&O settlement on 28th can initiate unwinding of long positions. The best strategy is to look for opportunity to book profit in stocks which are overbought & also avoid fresh buying at higher levels.
SENSEX (Close - 19584.30)
Sensex has traded in a very narrow range in the last trading session. It has come down from a level near to 19700 marks. Well, Sensex seems to be tired now but as long as it sustain above 19500 I will not consider any remarkable weakness. Even if market goes below 19500 we will get support at 19300 levels.
On the higher side we need to see the cross of 19810. We are just few days away from derivative expiry for this month series. We may not travel much higher from current levels before expiry. Market may be volatile but trading range remains narrow compared to recent months. I will focus on technology stock to buy from lower levels.
SKFINDIA (Close - 632.15)
This stock is trading with very low volume normally. It has seen a breakout on price chart. As long as it sustain above 628 we can expect a further gain of 4-5% from current levels. We may get initial dip. Buy in fall near 625 with stop loss below 618.
INFOSYSTCH (Close - 2941.30)
It has saved 2880 support levels in a post result fall. Now it has come comfortably higher. It is giving a sense for some rise in coming days. Buy in intraday fall near 2920 with stop loss below 2900. On higher side it will knock 3000 sooner than expected time.
DLF (Close - 241.70)
I have never been the big fan of reality stocks from real long time. Technically this stock has trading support at 240. If trades sustain below 240 then we can expect a move towards 236 to 234 levels once again. First watch out for 240 then think to trade short.
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