DSIJ Mindshare

Nifty Volatile, Trading Around Crucial Supports

The NSE index has witnessed volatile trades in the last couple of weeks.  After registering a high around the 6100 level, it has taken a U-turn, and finally shrugged off selling pressure around the 5800 level. The index went into a short-term downtrend, though it saw a bullish crossover at the 6050 level. The market could not sustain at the higher levels and came down to the major technical support. The global scenario indicated a mixed sentiment, but the market saw some strength after the Current Account Deficit data. Going ahead, the markets are eyeing the industrial production numbers.

Most of the sectoral indices also came down from the higher levels. The Mid-Caps and Small-Caps were directionless. Consumer Durables, Auto and Health Care provided some strength. However, Capital Goods and Oil & Gas did not manage to hold their gains. Bankex and Metals were the most volatile among the sectors. IT and FMCG both witnessed some sideways movement.

The index consolidated in a wide range between the technical levels of 5970-5750, as we had expected last time round. Going ahead, the index may continue to trade in this range.

It has crucial supports at its 100-day EMA (5770) and the 50-day EMA (5750) levels. The weekly chart is indicating some downward move, and if the index breaks these levels with heavy volumes, it may see a further fall going ahead.
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Tata Communications | CMP – Rs 188 | Buy

Tata Communications topped out by posting an intraday high of Rs 270 on November 6, 2012, and these levels have been rarely seen. The stock commenced a downtrend and formed a bottom at an intraday low of Rs 208 on March 26, 2013. It witnessed a small pullback rally and registered an intraday high of Rs 243.50 on May 15, 2013. It then entered into a corrective phase and posted a fresh 52-week low of Rs 137.15 as on August 5, 2013. Recently, the stock has witnessed a breakout of a triangle pattern along with higher volumes, which suggests that the buying momentum will continue and the stock will continue its upward journey. One can initiate a long position in the stock with a stoploss of Rs 182, for a possible up-move to Rs 218-230.

Currently, the stock has given a fresh breakout, as suggested by the bullish candlestick pattern and an increase in volumes. With the oscillators looking positive, the stock can see a further upside ahead.

Trading Pointers:

Indicators: MACD-Buy | RMI-Buy | Stochastic-Buy | ROC-Buy | RSI-Sell
Support: 181, 174 | Resistance: 200, 215
Targets: 1st Target: 218 (4-6 weeks) | 2nd Target: 230 (12-14 weeks)  
BSE Code – 500483 | Stoploss: 182 (cls)
55 Day EMA: 174.40
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Entertainment Network | CMP - Rs 288 | Buy

Entertainment Network topped out by posting an intraday high of Rs 276.80 on November 16, 2012, commenced a downtrend, and formed a bottom at an intraday low of Rs 203 on February 28, 2013. The scrip witnessed a pullback rally and registered an intraday high of Rs 265 as on May 20, 2013. It entered into a corrective phase and posted a lower low of Rs 191.15 as on August 7, 2013. Following this, it entered into an uptrend and formed multiple tops around the Rs 268-272 levels. The stock witnessed a breakout of this multiple top pattern on September 25, 2013, along with higher-than-average volumes. After this, it is making higher highs, which indicates that this trend has a strong momentum. The stock may see some consolidation as there have been sharp up-moves.

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-Sell | ROC-Buy | RSI-Sell
Support: 278, 264 | Resistance: 300, 320
Targets: 1st Target: 322 (4-6 weeks) | 2nd Target: 340 (12-14 weeks)  
BSE Code – 532700 | Stoploss: 264 (cls)  
55 Day EMA: 244.07
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Pidilite Industries | CMP - Rs 251 | Buy

Pidilite Industries bottomed out by posting an intraday low of Rs 188.60 as on November 5, 2012. Following this, it entered into a strong uptrend, forming a higher top higher bottom. The stock topped out by posting an intraday high of Rs 302.85 on July 19, 2013, and then entered into a downtrend to register a low of Rs 219.40 as on September 4, 2013, forming a round pattern along with good accumulation. It has now resumed its uptrend and is trading near an important resistance level of Rs 260. Once the stock trades above the Rs 260 level, we expect it to breakout and witness a strong rally. One can trade on the long side with a stoploss of Rs 238.

Currently, this stock seems to be in a consolidation phase and is on the verge of commencing a higher bottom formation on the daily charts, indicating the possibility of a further upside.

Trading Pointers:

Indicators: MACD-Buy | RMI-Buy | Stochastic-Sell | ROC-Buy | RSI-Sell
Support: 250, 240 | Resistance: 260, 273
Targets: 1st Target: 270 (4-6 weeks) | 2nd Target: 285 (12-14 weeks)  
BSE Code – 500331 | Stoploss: 238 (cls)
55 Day EMA: 250.39
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Aurobindo Pharma | CMP – Rs 202 | Buy

Aurobindo Pharma bottomed out by posting an intraday low of Rs 129.55 as on September 25, 2012. Following this, it entered into a strong uptrend, forming a higher top, higher bottom. The stock has hit a fresh 52-week high of Rs 204.90 as on January 7, 2013. It then saw a major correction and actually bottomed out by registering an intraday low of Rs 127.15 on March 28, 2013. After this, the stock entered into an uptrend and went to register a high of Rs 202.30 as on May 3, 2013. The stock formed multiple tops around the Rs 198-205 level. Recently, it stock has broken a crucial resistance as defined by the neckline, and has given a breakout of inverse head and shoulder pattern, which is bullish in nature. The breakout has been witnessed along with a rise in volumes. One can initiate a long position in the stock with a stoploss of Rs 174 on a closing basis, for a possible up-move to Rs 225-235.

Currently, the stock has given a fresh breakout and a confirmation for the same is provided by a bullish candlestick pattern and an increase in volumes. With the oscillators looking positive, the stock can see a further upside in the coming trading session.

Trading Pointers:

Indicators: MACD-Buy | RMI-Sell | Stochastic-Sell | ROC-Buy | RSI-Buy
Support: 194, 181 | Resistance: 210, 228
Targets: 1st Target: 225 (4-6 weeks) | 2nd Target: 235 (12-14 weeks)  
BSE Code – 524804 | Stoploss: 174(cls)
55 Day EMA: 182.28

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