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DSIJ's technical picks

| 2/23/2012 9:35 PM Thursday

Nifty At 5600!

The NSE Nifty has moved on expected lines, while the anticipated correction has refused to oblige. Despite an almost nine week perpendicular rise, amazing resilience by the Nifty has denied any erosion though individual scrips have corrected from time to time. The Nifty is moving in an upward sloping channel on the daily chart (refer to chart), and as long as it continues to remain within the confines of this channel, a decline doesn’t seem to be on the horizon yet. A decisive breach of Trendline 3 (lower boundary and support line of the aforesaid channel) is a must if a correction has to set in, but the market seems to be in no mood to oblige.

The Mid-Caps and Small-Caps have put in scintillating performances and have been market performers (if not ouperformers) over the past few weeks. Banks continue to sizzle positively, while Capital Goods have also staged a strong comeback. Consumer Durables have played catch up to stage a smart rally and FMCG has been rather staid but has held. Pharma has witnessed some profit taking but IT has staged a brilliant comeback. Metals too have continued their steady progress, while Realty has been a surprise mover.

The Nifty has continued to gain further ground, brushing aside all concerns of a correction. While a further upside cannot be ruled out (the aforementioned channel is crucial in the scheme of things) a scrip specific approach is advocated.

CMC LTD. | Buy CMP - Rs 953.25
1st Target: 1050 (4-6 weeks) 2nd Target: 1120 (12-14 weeks) Stoploss: 900 (cls)
Trading Pointers:
Indicators: MACD-Buy | RMI-Buy | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 927, 873 | Resistance: 991, 1045
BSE Code - 517326 | 55-Week EMA: 933.35

CMC bottomed out by posting an intra-week low of Rs 523.50 during the week ended 6th February, 2010 and these levels have rarely been seen since. The scrip launched into an intermediate uptrend to peak at an intra-week high of Rs 762.50 during the week ended 16th April, 2010. It couldn’t sustain these levels for long, and declined to post an intra-week low of Rs 663.50 during the week ended 11th June, 2010. The scrip commenced its uptrend from here and rallied to peak at an intra-week high of Rs 1390 during the week ended 13th May, 2011.

Currently, the stock seems set to stage an upmove after a decent weekly correction. With even the daily picture looking better, a further upside from these levels cannot be ruled out.

CORE EDUCATION | Buy CMP - Rs 279
1st Target: 307 (4-6 weeks) 2nd Target: 322 (12-14 weeks) Stoploss: 265 (cls)
Trading Pointers:
Indicators: MACD-Buy | RMI-Buy | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 274, 256 | Resistance: 299, 322
BSE Code - 512199 | 55-Week EMA: 277.82

Core Education peaked at an intra-week high of Rs 165 during the week ended 12th June, 2009, and declined to post an intra-week low of Rs 91.50 during the week ended 17th July, 2009. The scrip launched into an intermediate uptrend, peaked at an intra-week high of Rs 280 during the week ended 30th April, 2010, only to enter a corrective phase, and declined to post an intra-week low of Rs 192.50 during the week ended 11th June, 2010. It staged a rally to peak at an intra-week high of Rs 350.60 during the week ended 8th April, 2011, and entered a corrective phase.

Currently, the stock has reversed direction after receiving significant support at the Rs 245 level. A weekly close above the Rs 285 level would mean the possibility of a further upside from here.

GODREJ PROPERTIES | Buy CMP - Rs 667.05
1st Target: 747 (4-6 weeks) 2nd Target: 772 (12-14 weeks) Stoploss: 627 (cls)
Trading Pointers:
Indicators: MACD-Buy | RMI-Buy | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 640, 601 | Resistance: 697, 736
BSE Code - 533150 | 55-Week EMA: 662.10

Godrej Properties bottomed out by posting an intra-week low of Rs 446.90 during the week ended 8th January, 2010, commenced a short-term uptrend, and rallied to peak at an intra-week high of Rs 591 during the week ended 28th May, 2010. The scrip entered a corrective phase to actually bottom out by posting an intra-week low of Rs 545.05 during the week ended 4th February, 2011. It moved sideways before recovering to peak at an intra-week high of Rs 845 during the week ended 15th July, 2011, only to decline from here.

Currently, the scrip seems to be on the verge of continuing its higher top, higher bottom formation on the daily charts, indicating the possibility of a further upside from these levels.

M&M FINANCIAL SERVICES | Buy CMP - Rs 722.80
1st Target: 800 (4-6 weeks) 2nd Target: 830 (12-14 weeks) Stoploss: 680 (cls)
Trading Pointers:
Indicators: MACD-Buy | RMI-Buy | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 699, 671 | Resistance: 742, 780
BSE Code - 532720 | 55-Week EMA: 652.22

M&M Financial Services bottomed out by posting an intra-week low of Rs 235.50 during the week ended 6th November, 2009, took support at the Rs 235 (support) level, recovered smartly, and peaked by posting an intra-week high of Rs 472.70 during the week ended 30th April, 2010. The stock declined from here, struggled a bit, finally overcame its recently-posted high, entered a medium-term uptrend, appreciated to peak at an intra-week high of Rs 913.45 during the week ended 19th November, 2010, and entered a corrective phase.

Currently, the scrip could be continuing its medium-term uptrend. With the oscillators looking positive, a further upside from these levels cannot be ruled out.

 

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