BANK OF BARODA - BUY CMP 575

 

Bank of Baroda has given a breakout of an ascending triangle. Volumes are fairly stable, but if you compare it to volumes of 3 periods ago, there is a strong jump, with nearly 4 times increase. Moving averages have given a positive crossover.

MACD, Stochastics and RSI have all given positive crossovers in our periods under consideration. Moreover MACD crossover is close to the zero (centre) line which makes it more bullish.

Target : 650

Stop Loss : 555

NIFTY - HAMMER AT BOTTOM

 

As can be seen from the attached chart, the Nifty has given a hammer at bottom signal on the daily candlestick chart. Confirmation in the form of a strong light candlestick is awaited on Monday. aggressive traders can trade long on the basis of the hammer on Monday keeping strict and tight stop losses, whereas conservative traders may wait for the confirmation to come in before initiating long positions. Remember, Candlestick patterns are short term patterns and the new patterns which develop after must be closely analysed, and investors must lock in profits/book losses at the sign of trouble ahead

The 4720 - 4750 support zone has held up admirably, preventing the Nifty from falling below it, even in the face of adverse news from RBI on the interest rate front. Let us hope that a strong bounce from this support results and the bullish trend is resumed.

For those investors who would like to go long, they would be well advised to do so only in Large Cap Nifty components. This is so because any bounceback is more likely in the Nifty rather than in mid and small caps and also the windscreen ahead is murky and a clear buy signal has not yet been generated.

NIFTY SUPPORT - FIBONACCI RETRACEMENT

 

Above chart indicates the retracement of the rise in Nifty from its lows in March 2009 upto the recently made high.
This is a retracement of the rise from Nifty 2500 to Nifty 5300 approximately. As readers may observe the first major line of support i.e. the 23.6 % retracement of the entire rise stands at 4670 to 4680 (approximately).

NIFTY - SUPPORT LEVELS

 

Investors will be distressed by the sudden downturn taken by the Markets, but this is the nature of the markets and this is what makes it interesting.

I'll try to analyse some supports for positional trading and the strategy one should adopt in such a scenario.

The first major support for the Nifty exists at 4722. This was as strong resistance zone during July to Sep 09, which took the Nifty nearly 3 months to break.

If 4722 is broken on the downside the next majot support ( a very strong one) is at 4600. This has acted as a resistance as far back as July 2007 and has further acted as either a support or resistance at at least 5 more major points in the past as indicated by up and down arrows in the chart attached.

Ideally positional traders should avoid buying until Nifty bounces back either from 4722 or from 4600. If 4600 is broken then all bets are off. So do not be in a hurry to buy, let the markets tell you when it is buying time.

Most of the stop losses would have been triggered last Thursday or Friday and traders would have done well to book losses at that point. The further fall in the markets would have validated their decision.

MAHINDRA LIFESPACE DEVELOPERS - BUY CMP 358

Mahindra Lifespace Developers is poised to give a breakout of a symmetrical triangle. Breakout has not yet happened on a closing basis, so strictly speaking one should wait for it to happen. But I am sticking my neck out on this one and reccomending it, because all other indcators like Moving Averages, MACD, Stochastics and RSI are showing positive cross over on the daily charts.

Again these days, breakouts happen with huge surge in prices and there is little opportunity left to buy. In this case there is no significant resistance on the upside unlike it would have been in the case of an ascending triangle or rectangle.

SL : 340

Target : 435

GIC HOUSING FINANCE - BUY CMP 95.40

Unable to upload charts due to some technical problem in blogger.

GIC Housing Finance is showing breakout of Symmetrical Triangle continuation pattern on daily charts with strong volumes. Volumes have increased from 464 K shares to 2.1 Mil shares.

RSI MACD, Stochastics and Moving Averages are showing positive crossovers.

SL : 93

Target : 120

SABERO ORGANICS BUY CMP 72.35

Due to some technical problems I am unable to upload charts.

Sabero Organics is showing breakout of ascending triangle continuation pattern.
Volumes have increased from 79 K shares to 1.35 Mil shares.

MACD and Stochastics are showing positive crossovers.

SL : 69

Target : 84

BUY ATLANTA - CMP 193

 

Atlanta has given a breakout of a trendline based channel with volumes increasing from 138 K shares to 1 Mil Shares on breakout. MACD and Stochastics are showing positive crossovers.

SL : 185
Target : 225

THIRUMALAI CHEMICALS - BUY CMP 139

 

Thirumalai Chemical has broken out of a trendline based channel. Volumes have increased from 8.7 K shares to 81 K shares.
Stochastics and MACD have given positive crossovers.

SL : 134
Target : 170

IMP Powers - Buy CMP 136.25

 

IMP Powers has given a strong breakout of ascending triangle continuation pattern.
Volumes have increased significantly from 12K shares to 81 K shares on breakout.
MACD cand Stochastics are showing positive crossovers on daily charts.
RSI is indicating neutral position.

SL : 131
Target : 170

DEEPAK NITRITE - CMP 164.50

 

Deepak Nitrite has shown a breakout of a Symmetrical Triangle Continuation pattern.
Breakout is accompanied by significantly higher volumes. Volumes have increased
from 15K shares on 12.1.10 to 319K shares on 13.1.10.

Price Target : 205

Stop Loss : 158

MARKET DIRECTION

The upward trend in midcap stocks is arrested for the time being.
Short term picture looks weak. This is particularly so because
markets did not rally on yesterdays good news of Infy results
and IIP numbers.Yesterday's fall was on larger volumes,
indicating potential weakness.

Investors should avoid fresh long positions, but not yet
liquidate their holdings. Tight and strict stop losses are
advised as any falls could be sudden and sharp.

ALOK INDUSTRIES - BUY CMP 25

Alok Industries is showing a breakout of a continuation pattern i.e. a Symmetrical Triangle.
The breakout has happened on 30.12.2009 with heavy volumes, but prices have not risen
significantly, therefore, giving investors an opportunity to enter the stock even at current levels.


Stop Loss : Rs. 24
Target : Rs. 40

AGRO DUTCH INDUSTRIES - CMP 16.20

Agro Dutch Industries has given a breakout of an Ascending Triangle pattern on 11.01.2010.
Voulme action is also supportive of the upmove.



Stop Loss : Rs.15.50
Target : Rs. 21

EURO CERAMICS - BUY CMP 60

Euro ceramics is showing a breakout of a long term rectangle consolidation on weekly charts. The consolidation has lasted since May 2009, and breakout has happened on 7th Jan 10. Breakout has occurred with significantly high volumes of 481K shares as compared to 39 K shares on previous day.
Stop Loss - 54
Target - 80