DSIJ Mindshare

Nifty Pulls Back, May Take A U-Turn

The NSE Nifty has moved as per our expectations and has given a breakout from the 5970 levels to enter a bullish zone. After the breakout, the Nifty continued to make gradual progress and finally consolidated at around the 6100 mark. The best part is that the index has crossed the aforesaid levels with good volumes. However, one should apply caution hereon, as if the index fails to sustain the current levels, it may take a U-turn. If that happens, a crucial support would be around 5950-5900. At the current levels, the outlook is quite dicey with no clear vision on the Nifty going ahead.

After a strong rally, the broader markets along with the Mid-Caps and Small-Caps have continued to make gradual progress. The FMCG and Heathcare indices were outperformers and led the rally. Banks and Capital Goods were in a consolidation phase. Metals showed some strength, but could not hold on to their gains. Realty and IT have both broken their respective support levels.

In the preceding week, the Nifty managed to close above its crucial hurdle at the 5970 level. Going ahead, we expect to see range-bound trades. As regards the expected move of the index, the lower-end range is around the 5950 level and the higher end is at 6150. Once we see a breakout or breakdown of the above mentioned range, one can take a call on either side.
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Gujarat Alkalies and Chemicals | CMP – Rs 182 | Buy

Gujarat Alkalies and Chemicals bottomed out on the daily charts by posting an intraday low of Rs 115.45 as on June 1, 2012. The scrip saw some good consolidation for three months, post which it entered into an uptrend. The stock then went into a corrective phase and bottomed out by posting an intraday low of Rs 131.55 as on February 26, 2013. It entered into an uptrend and peaked out by posting an intraday high of Rs 222.50 as on April 1, 2013. The stock couldn’t sustain these levels for long, and declined to post an intraday low of Rs 163.50 as on May 3, 2013. On May 9, 2013, it gave a breakout of a strong resistance and a broken narrow trading range.

Currently, Gujarat Alkalies and Chemicals seem set to stage an up-move. With even the medium-term 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: 177, 165 | Resistance: 185, 197
Targets: 1st Target: 197 (4-6 weeks) | 2nd Target: 210 (10-11 weeks)  
BSE Code – 530001 | Stoploss: 168 (cls)
55 Day EMA: 166.84
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Amara Raja Batteries | CMP - Rs 283.80 | Buy

Amara Raja Batteries bottomed out on the daily charts by posting an intraday low of Rs 134.05 as on May 18, 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 327.75 as on January 20, 2013. After a strong up-move, it entered into a corrective phase to actually bottom out by posting an intraday low of Rs 237.95 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. It has seen a breakout of a downward sloping trendline as on May 8, 2013. The stock has sustained this breakout for more than two trading sessions, which is a sign that it has entered into an uptrend.

Therefore, one can initiate a long position for an upside target of Rs 305-320, with a stoploss of Rs 268.

Trading Pointers:

Indicators: MACD-Buy | RMI- Buy | | Stochastic-Sell | | ROC-Buy | | RSI-Sell |
Support: 281, 275 | Resistance: 298, 318
Targets: 1st Target: 305 (4-6 weeks) | 2nd Target: 318 (10-11 weeks)   
BSE Code – 500008 | Stoploss: 268 (cls)  
55 Day EMA: 269.07
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Titan Industries | CMP - Rs 288 | Buy

Titan Industries bottomed out by posting an intraday low of Rs 204.15 as on June 5, 2012, commenced a short-term uptrend, and rallied to peak at an intraday high of Rs 239.25 as on July 3, 2012. It then entered into a consolidation phase to actually bottom out by posting an intraday low of Rs 214.75 as on August 13, 2012. The stock launched into an intermediate uptrend to peak at an intraday high of Rs 313.35 as on November 30, 2012, and made a double top around the Rs 313.50 level. It couldn’t sustain these levels for long, and entered into a corrective phase to post an intraday low of Rs 225 as on March 14, 2013.

Titan Industries entered into an uptrend and has seen a breakout along with a rise in volumes, which indicates the strength of the uptrend. One can initiate a long position in the stock for a possible target of Rs 305-315.

Trading Pointers:

Indicators: MACD-Buy | RMI-Buy | | Stochastic-Sell | | ROC-Buy | | RSI-Sell |
Support: 282, 275 | Resistance: 296, 314
Targets: 1st Target: 305 (4-6 weeks) | 2nd Target: 315 (12-14 weeks)   
BSE Code – 500114 | Stoploss: 275 (cls)
55 Day EMA: 263.75
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Grasim Industries | CMP - Rs 3018 | Buy

Grasim Industries has bottomed out by posting an intraday low of Rs 2210 as on June 4, 2012, and these levels have rarely been seen since. The stock launched into an intermediate uptrend, made higher tops and higher bottoms, and registered a high of Rs 53510 as on October 17, 2012. However, it could not sustain this level for very long and entered into a corrective phase. The stock registered a low of Rs 2667 as on April 11, 2013, and then entered into an uptrend.

Recently, it has given a breakout of a downward sloping trendline, which is a positive signal for the stock. Investors can take long positions in the counter for an upside target of Rs 3120-3200, with a stoploss of Rs 2930.

Trading Pointers:

Indicators: MACD-Buy | RMI-Buy | | Stochastic-Sell | | ROC-Buy | | RSI-Sell |
Support: 2990, 2920 | Resistance: 3065, 3120
Targets: 1st Target: 3120 (4-6 weeks) | 2nd Target: 3200 (12-14 weeks)   
BSE Code – 500300 | Stoploss: 2930 (cls)
55 Day EMA: 2935.92

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