Nifty In Pullback Mode

Nifty In Pullback Mode

The NSE Nifty has seen a good pullback from the 5610 level. 5600 has proved to be a short-term bottom for the index as the market came close to the 5610-5630 level several times and despite the strong downward momentum, failed to break through these zones. A relief rally was expected as the risk-reward ratio was not in favour of bears around these levels, and so a small pullback upto 5800-5830 can be seen. The trend for the Nifty remains downward, and this will reverse only if it manages to close above the levels of 5980-6000.

The Mid-Caps and Small-Caps have outperformed their larger counterparts. The pullback in Mid- and Small-Caps was expected as they were in an oversold zone for a long period of time. Realty and Capital Goods have outperformed the markets and maintained good momentum in sluggish conditions. Healthcare and Consumer Durables have provided support to the market and look good for the short term. IT and FMGC have helped the Nifty to recover from its lows. Metal and Auto, though, have maintained their position as the weakest sectors around.

The Nifty has given a breakout from a falling wedge pattern, which is a positive sign. The index may bounce back to the 5800-5830 levels in the coming trading sessions. We feel that the market will remain range-bound. The lower-end range for the Nifty is around the levels of 5600 and the higher end is placed at 5830. Once we see a breakout or a breakdown of the range, there could be a sharp movement.
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Cipla | CMP - Rs 391 | Buy

Cipla has bottomed out on the daily charts by posting an intraday low of Rs 353.10 as on November 26, 2012, and these levels have rarely been seen since. The scrip launched into an intermediate uptrend to peak at an intraday high of Rs 435 as on January 9, 2013. It couldn’t sustain these levels for long, and declined to post an intraday low of Rs 354 as on March 1, 2013. The stock commenced its uptrend from here, and rallied back to register an intraday high of Rs 395.95 as on March 11, 2013.

Currently, Cipla seems to be in a consolidation phase. The stock has multiple resistances around Rs 395-396, and once this zone is cleared, it is set for a strong up-move after a decent consolidation. On April 1, 2013, the stock formed a bullish candlestick, which suggests a positive outlook. Therefore, one can consider buying the stock for an upside target of Rs 410-430, with a stoploss of Rs 370.

Trading Pointers

Indicators: MACD-Buy | RMI-Buy | Stochastic-Buy | ROC-Sell | RSI-Buy
Support: 383, 370 | Resistance: 396, 410
Targets: 1st Target: 410 (4-6 weeks) | 2nd Target: 430 (10-11 weeks)
BSE Code – 500087 | Stoploss: 370 (cls)
55 Day EMA: 388.23
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Jindal Steel & Power | CMP - Rs 351 | Sell

Jindal Steel & Power peaked at an intraday high of Rs 347 as on January 2, 2013, and declined to post an intraday low of Rs 334.50 as on March 20, 2013. The stock was moving in the range of Rs 366-340 for the past few weeks, and on an intraday basis, it has given a breakdown of the same in the last trading day. The stock has been trading below its 200-day EMA for the past two months or so. This suggests that it is in an intermediate downtrend, and every pullback should be used to initiate a short position.

On April 1, 2013, the stock went down 1.52 per cent and formed a bearish candlestick pattern. We anticipate that it can see a further downside rally and continue to record fresh lows. Therefore, one can initiate a short position in the counter for a downside target of Rs 330-318, with a stoploss of Rs 366.

Trading Pointers:

Indicators: MACD-Buy | RMI-Sell | Stochastic-Sell | ROC-Sell | RSI-Buy
Support: 340, 331 | Resistance: 356, 366
Targets: 1st Target: 330 (4-6 weeks) | 2nd Target: 318 (10-11 weeks)
BSE Code – 532286 | Stoploss: 366 (cls)
55 Day EMA: 352.26
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Infosys | CMP - Rs 2969 | Buy

Infosys bottomed out by posting an intraday low of Rs 2205.30 as on July 20, 2012, commenced a short-term uptrend, and rallied to peak at an intraday high of Rs 2650 as on October 21, 2012. The scrip entered a corrective phase to form a higher bottom by posting an intraday low of Rs 2245 as on December 18, 2012, and then entered into a minor consolidation phase. On January 11, 2013, the stock formed a huge bullish gap-up candlestick and crossed all its major resistance levels. This was followed by another bullish candlestick, which confirmed the uptrend. Thereafter, the stock entered into a small consolidation phase. After this, it registered a new 52-week high of Rs 3009 as on March 7, 2013, went into a minor correction phase, and took support around Rs 2850.

As on April 1, 2013, it formed a bullish candlestick along with a jump in volumes, and this suggests that the stock may resume its uptrend. Therefore, one can initiate a long position in the counter for a possible target of Rs 3050-3100, with a stoploss of Rs 2850.

Trading Pointers:

Indicators: MACD-Sell | RMI-Buy | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 2920, 2850 | Resistance: 2995, 3025
Targets: 1st Target: 3050 (4-6 weeks) | 2nd Target: 3100 (12-14 weeks)
BSE Code – 500209 | Stoploss: 2850 (cls)
55 Day EMA: 2801
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Indraprastha Gas | CMP - Rs 290 | Buy

Indraprastha Gas has bottomed out by posting an intraday low of Rs 192.10 as on May 31, 2012, recovered smartly from the low, and peaked by posting an intraday high of Rs 277.30 as on August 14, 2012. The scrip then entered into a consolidation phase, and made a higher bottom. It entered a medium-term uptrend, appreciated to peak at an intraday high of Rs 290.85 as on March 11, 2013.

The stock is resuming its medium-term uptrend as it has given a breakout of a symmetrical triangle pattern, which is a continuation pattern. Going forward, we anticipate that the buying momentum may continue, which suggests an upside target of Rs 300-310 with a stoploss of Rs 270.

Trading Pointers:

Indicators: MACD-Buy | RMI-Buy | Stochastic-Buy | ROC-Sell     RSI-Sell
Support: 283, 272 | Resistance: 292, 300
Targets: 1st Target: 300 (4-6 weeks) | 2nd Target: 310 (12-14 weeks)
BSE Code – 532514 | Stoploss: 270 (cls)
55 Day EMA: 264.68

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.