Technical picks for your portfolio

Nifty Update - Nifty Preparing To Tank Again

The NSE Nifty has moved along expected lines, but almost out of habit, has staged a sharp recovery due to an oversold situation coupled with extreme bearishness (read: sentiment) – not to mention the 10 trading session 568 point fall. Low volumes have seen extreme swings in the market, but the inherent weakness in the Nifty (read: a clear lower top, lower bottom scenario on even the monthly chart continues unabated) remains omnipresent. A 250-point Nifty rebound in a matter of five trading sessions has seen a short-term bounce gain some ground, with a 50 per cent retracement of the aforesaid decline coming in at 4817, while traditional resistance at the 4835 could limit the upside for the time being.

The Mid- and Small-Caps (distinct weak spots) have staged a (feeble) recovery in line with the market. Banks have been market performers, while Capital Goods have struggled to recover. Consumer Durables have staged a decent recovery and FMCG has been amongst the brightest spots in the market, though Pharma has been rather lacklustre. IT has been very solid but Metals has been one of the weaker spots. Realty has clawed back. The Nifty has recovered due to a cocktail of all these factors and a further upside cannot be ruled out. It is still too early to expect a trend reversal, but sustainability above the 4835 level is crucial for the short term.

AMBUJA CEMENTS Buy CMP - Rs160.05
1st Target: 180 (4-6 weeks) 2nd Target: 190 (12-14 weeks) Stoploss: 150 (cls)
Trading Pointers:
Indicators: MACD-Buy | RMI-Sell | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 154, 142 | Resistance: 166, 178
BSE Code - 500425 | 55-Week EMA: 141.00

Ambuja Cements bottomed out by posting an intraweek low of Rs81.80 during the week ended 13th November, 2009, and these levels have rarely been seen since. The scrip launched into an intermediate uptrend to peak at an intra-week high of Rs125.60 during the week ended 30th April, 2010. The stock could not sustain these levels for long, and declined to post an intra-week low of Rs107.55 during the week ended 23rd July, 2010. It commenced its uptrend from here, and rallied to peak at an intra-week high of Rs166.50 during the week ended 12th November, 2010. Currently, the stock seems set to stage an upmove after a decent weekly consolidation. With even the daily picture looking better, a further upside from these levels cannot be ruled out.

DIVI´S LABORATORIES Buy CMP - Rs761.15
1st Target: 820 (4-6 weeks) 2nd Target: 840 (12-14 weeks) Stoploss: 730 (cls)
Trading Pointers:
Indicators: MACD-Buy | RMI-Buy | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 728, 686 | Resistance: 782, 818
BSE Code -532488 | 55-Week EMA: 725.06

Divi’s Laboratories peaked at an intra-week high of Rs481.50 during the week ended 6th February, 2009, and declined to post an intra-week low of Rs382.52 during the week ended 6th March, 2009. The scrip launched into an intermediate uptrend and peaked at an intra-week high of Rs659.40 during the week ended 12th June, 2009, only to enter a corrective phase and declined to post an intra-week low of Rs452 during the week ended 14th August, 2009. It staged a rally to peak at an intra-week high of Rs842.50 during the week ended 29th July, 2011, and entered a corrective phase. Currently, the stock has reversed direction after receiving significant support from the Rs724 level. A weekly close above the Rs771 level would mean the possibility of a further upside from here.

TATA COMMUNICATIONS Buy CMP - Rs214.25
1st Target: 234 (4-6 weeks) 2nd Target: 249 (12-14 weeks) Stoploss: 204 (cls)
Trading Pointers:
Indicators: MACD-Buy | RMI-Buy | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 202, 173 | Resistance: 228, 245
BSE Code - 500483 | 55-Week EMA: 221.13

Tata Communications bottomed out by posting an intra-week low of Rs320 during the week ended 31st October, 2008, commenced a short-term uptrend, and rallied to peak at an intra-week high of Rs521.10 during the week ended 19th December, 2008. The scrip entered a corrective phase to actually bottom out by posting an intra-week low of Rs382 during the week ended 27th February, 2009. It moved sideways before recovering to peak at an intra-week high of Rs651 during the week ended 22nd May, 2009, only to decline from here.

Currently, the scrip seems to be on the verge of forming a higher top, higher bottom formation on the weekly chart, indicating the possibility of a further upside from these levels.

TCS Buy CMP - Rs1187.90
1 st Target: 1288 (4-6 weeks) 2nd Target: 1325 (12-14 weeks) Stoploss: 1138 (cls)
Trading Pointers:
Indicators: MACD-Buy | RMI-Buy | Stochastic-Sell | ROC-Buy | RSI-Buy
Support: 1170, 1122 | Resistance: 1225, 1264
BSE Code - 532540 55-Week EMA: 1070.86

Tata Consultancy Services (TCS) bottomed out by posting an intra-week low of Rs435.55 during the week ended 21st August, 2009, took support at the Rs438 (support) level, recovered smartly and peaked by posting an intra-week high of Rs844 during the week ended 19th March, 2010. It declined from here, struggled a bit, finally overcame its recently-posted high and entered a mediumterm uptrend. The scrip appreciated to peak at an intraweek high of Rs1247 during the week ended 8th April, 2011, and entered a corrective phase.

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