DSIJ Mindshare

Nifty Continues Upward Move, Major Hurdles Ahead

The NSE Nifty has moved along expected lines. After registering a low of around 5500, it has continued to make gradual progress and finally consolidated around the 5820-5900 levels. Before registering a low, the index went into a short-term downtrend from the 5970 level, and a couple of times it witnessed some sell-off from here. This level is expected to be a major hurdle for the Nifty again. If it crosses these levels with good volumes and breaks this consolidation phase, it may come into a bullish zone again. If the index does not sustain this level, trades will remain range-bound. In this case, it will have crucial support around the 5790-5740 levels. At the current level, the outlook on the weekly chart remains positive as seen in the rising up trendline.

After a strong rally in the leading indices, the broader market indices like Mid-Caps and the Small-Caps are set for a smart recovery. Banks and Consumer Durables are leading the market uptrend and the indices seem set for an upward breakout. Capital Goods, Oil & Gas and Realty continue to maintain their positive trend. IT and TECk remain in a consolidation phase and are struggling for breakouts. Metals are still moving sideways. Healthcare and FMGC are struggling to make progress, but are expected to enter a positive phase.

In the preceding week, the Nifty managed to close above its 55-day EMA at 5765. Now, it is facing a solid hurdle at the 5970-6000 level. If the index manages to break this level and continues to close above it, one can expect a pullback around the 6140-6200 levels.
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Aditya Birla Nuvo | CMP – Rs 1025 | Buy

Aditya Birla Nuvo bottomed out on the daily charts by posting an intraday low of Rs 710 as on June 29, 2012, and these levels have rarely been seen since. The scrip saw a good consolidation and peaked out by posting an intraday high of Rs 833 as on July 5, 2012. It couldn’t sustain these levels for long, and declined to post an intraday low of Rs 763.90. The stock commenced its uptrend from here, rallied to peak at Rs 1191 as on January 21, 2013, and went into a minor correction phase. It gave a breakout of a downward sloping trendline as on April 26, 2013 along with high volumes, which is a positive signal for the stock.

Currently, Aditya Birla Nuvo seems set to stage an up-move after a decent consolidation. With even the medium-term picture looking better, a further upside from these levels cannot be ruled out.

Trading Pointers:

Indicators: MACD-Sell | RMI-Buy | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 991, 930 | Resistance: 1040, 1085
Targets: 1st Target: 1085 (4-6 weeks) | 2nd Target: 1140 (10-11 weeks)
BSE Code – 500303 | Stoploss: 930 (cls)
55 Day EMA: 1010.30
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Cholamandalam Investment & Finance Co. | CMP - Rs 270 | Buy

Cholamandalam Investment and Finance Co. bottomed out on the daily charts by posting an intraday low of Rs 142.70 as on May 31, 2012, and these levels have rarely been seen since. The stock commenced a long-term uptrend, and rallied to peak at an intraday high of Rs 309.70 as on February 28, 2013. It entered into a corrective phase after a strong up-move to actually bottom out by posting an intraday low of Rs 237 as on April 15, 2013. Currently, the stock has seen a breakout from its resistance line, indicating the possibility of a further upside from these levels.

Therefore, one can initiate a long position for an upside target of Rs 284-300, with a stoploss of Rs 255.

Trading Pointers:

Indicators: MACD-Buy | RMI- Buy | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 258, 240 | Resistance: 276, 284
Targets: 1st Target: 284 (4-6 weeks) | 2nd Target: 300 (10-11 weeks)   
BSE Code – 511243 | Stoploss: 255 (cls)
55 Day EMA: 270.90
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Idea Cellular | CMP - Rs 122 | Buy

Idea Cellular bottomed out by posting an intraday low of Rs 70.30 as on May 23, 2012, commenced a short-term uptrend, and rallied to peak at an intraday high of Rs 87.15 as on July 4, 2012. The stock entered into a corrective phase to actually bottom out by posting an intraday high of Rs 71.50 as on August 24, 2012, and these levels have rarely been seen since. It launched into an intermediate uptrend to peak at an intraday high of Rs 123.50 as on January 15, 2013, and made a double top around the level of Rs 123.50. It couldn’t sustain these levels for long, and declined to post an intraday low of Rs 101.10 as on April 8, 2013. The stock entered into a consolidation phase, and opened gap up on April 26, 2013. It broke the resistance, as defined by the Bollinger band, and the double top which it had made earlier. One can initiate a long position in the stock for a possible target of Rs 131-140.

Trading Pointers:

Indicators: MACD-Buy | RMI- Sell | Stochastic-Sell | ROC-Buy | RSI-Buy
Support: 120, 115 | Resistance: 129, 135
Targets: 1st Target: 131 (4-6 weeks) | 2nd Target: 140 (10-11 weeks)
BSE Code – 532822 | Stoploss: 114 (cls)
55 Day EMA: 111.07
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Cummins India | CMP - Rs 510 | Buy

Cummins India has bottomed out by posting an intraday low of Rs 395.10 as on May 23, 2012, and these levels have rarely been seen since. The stock launched into an intermediate uptrend and made higher tops and a higher bottom. It registered a high of Rs 542.40 as on January 3, 2013, but could not sustain this level for long and went into a corrective phase. The stock formed a good base around the level of Rs 470, and saw some consolidation in the range of Rs 470-490 for over three months. It has seen a breakout of the trading range and is trading above the downward sloping line.

As on April 26, 2013, the stock has formed a bullish harami pattern. Therefore, one can initiate a long position for an upside target of Rs 540-570, with a stoploss of Rs 470.

Trading Pointers:
Indicators: MACD-Buy | RMI- Sell | Stochastic-Sell | ROC-Buy | RSI-Buy
Support: 505, 485 | Resistance: 530, 545
Targets: 1st Target: 540 (4-6 weeks) | 2nd Target: 570 (10-11 weeks)
BSE Code – 500480 | Stoploss: 470 (cls)
55 Day EMA: 497.41

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