DSIJ Mindshare

Nifty Slips Again

NSE Nifty:

The NSE Nifty has moved exactly along the expected lines. It has not been able to sustain above the 5410 level (gave a three-trading session close above 5410 - 5421, 5413, 5415), but did not close on the weekly charts and the anticipated correction has manifested itself without breaching the 5224 level. The short-term outlook has obviously come under pressure and transformed into a short-term downtrend, which might translate into a further downside, possibly till the 5182-5224 level. An oversold situation seems to be developing, indicating the possibility of a recovery from the aforesaid levels. A weekly close above the 5410 level is an absolute must if any significant appreciation has to unfold.



The Mid-Caps and Small-Caps have remained distinct weak spots and seem to be in a mood to depreciate further, albeit with a small pause. Banks have been at the forefront of the decline, Capital Goods have back-pedalled furiously and Consumer Durables have remained relatively range-bound. FMCG and Healthcare have posted fresh all-time highs, while IT has shown a lot of resilience in a skewed market. Metals have continued their obvious weakness, and Realty too has been one of the weakest sectors.

The Nifty has walked into an expected correction which hasn’t yet run its course. While a late recovery seems to be on the cards, it seems more like a trading market than an investing market. A scrip-specific approach is advocated.

Aurobindo Pharma
CMP - Rs 118.20 | Buy



Aurobindo Pharma bottomed out by posting an intra-week low of Rs 25.30 during the week ended 6th February, 2009, and these levels have rarely been seen since. The scrip launched into an intermediate uptrend to peak at an intra-week high of Rs 198 during the week ended 12th March, 2010. It couldn’t sustain these levels for long, and declined to post an intra-week low of Rs 157.25 during the week ended 14th May, 2010. The scrip commenced its uptrend from here, and rallied to peak at an intra-week high of Rs 275 during the week ended 7th January, 2011.

Currently, Aurobindo Pharma seems set to stage an up-move after a decent weekly consolidation. With even the daily 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-Buy
Support: 114, 101 | Resistance: 126, 141
Targets: 1st Target: 134 (4-6 weeks) | 2nd Target: 141 (12-14 weeks)
BSE Code – 524804 | Stoploss: 110 (cls)
55 Week EMA: 122.10

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G E Shipping
CMP - Rs 247.95 | Sell



G E Shipping peaked at an intra-week high of Rs 222.50 during the week ended 13th February, 2009, and declined to post an intra-week low of Rs 142.60 during the week ended 13th March, 2009. The scrip launched into an intermediate uptrend, peaked at an intra-week high of Rs 294 during the week ended 29th May, 2009, only to enter a corrective phase, and declined to post an intra-week low of Rs 211.95 during the week ended 17th July, 2009. It staged a rally to peak at an intra-week high of Rs 393 during the week ended 12th November, 2010, and entered a corrective phase.

Currently, G E Shipping has reversed direction after receiving significant resistance from the Rs 270 level. A weekly close below the Rs 240 level would mean the possibility of a further downside from here.

Trading Pointers:
Indicators: MACD-Sell | RMI-Sell  | Stochastic-Sell | ROC-Sell | RSI-Sell
Support: 241, 227 | Resistance: 254, 269
Targets: 1st Target: 228 (4-6 weeks) | 2nd Target: 221 (12-14 weeks)   
BSE Code – 500620 | Stoploss: 258 (cls)
55 Week EMA: 252.05

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Indraprastha Gas
CMP - Rs 239.25 | Sell



Indraprastha Gas bottomed out by posting an intra-week low of Rs 113.25 during the week ended 15th May, 2009, commenced a short-term uptrend, and rallied to peak at an intra-week high of Rs 247.75 during the week ended 6th February, 2010. The scrip entered a corrective phase to actually bottom out by posting an intra-week low of Rs 215.50 during the week ended 21st May, 2010. It moved sideways before recovering to peak at an intra-week high of Rs 453.25 during the week ended 9th September, 2011, only to decline from here.

Currently, Indraprastha Gas seems to be on the verge of commencing a lower top, lower bottom formation on the daily charts, indicating the possibility of a further downside from these levels.

Trading Pointers:
Indicators: MACD-Buy | RMI-Buy | Stochastic-Sell  | ROC-Sell | RSI-Sell
Support: 234, 219 | Resistance: 251, 270
Targets: 1st Target: 223 (4-6 weeks)  | 2nd Target: 215 (12-14 weeks)   
BSE Code – 532514  | Stoploss: 247 (cls)
55 Week EMA: 293.49

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IRB Infra
CMP - Rs 128.10 | Buy



IRB Infra bottomed out by posting an intra-week low of Rs 76.65 during the week ended 27th March, 2009, took support at the Rs 77 (support) level, recovered smartly, and peaked by posting an intra-week high of Rs 202.20 during the week ended 7th August, 2009. The scrip declined from here, struggled a bit and finally overcame its recently-posted high. It entered a medium-term uptrend, appreciated to peak at an intra-week high of Rs 312.80 during the week ended 27th August, 2010, and entered a corrective phase.

Currently, IRB Infra could be commencing its short-term uptrend. With the oscillators looking positive, a further upside from these levels cannot be ruled out.

Trading Pointers:
Indicators: MACD-Buy | RMI-Sell | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 120, 111 | Resistance: 129, 141
Targets: 1st Target: 144 (4-6 weeks) | 2nd Target: 151 (12-14 weeks)   
BSE Code – 532947 | Stoploss: 120 (cls)
55 Week EMA: 150.54

Sebi Disclosure: The author is an active market participant and could not only be having positions but could even be having contrary positions in the stocks mentioned above.  

*LEGEND:
•    EMA – Exponential Moving Average.
•    MACD – Moving Average Convergence Divergence
•    RMI – Relative Momentum Index
•    ROC – Rate of Change
•    RSI – Relative Strength Index

*It would be pertinent to note that these are just tools to arrive at a buy or sell decision. There are no absolutes in this sphere, so the best one can do is to minimise losses and let the profits run.

*In the event of a sharp movement materialising in the scrips recommended - both upwards or downwards (the analysis is done on Monday evening based on the week's price movements while market action can only be taken on Thursday) investors would do well to stay away. Despite an active movement in the scrip, if a need arises to trade - investors can use the support/resistance levels as stoploss and/or entry/exit for taking a position in the market.  In spite of the above-mentioned statement, investors are advised to use their own discretion.

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