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| 3/8/2012 9:03 PM Thursday

Nifty In Corrective Phase

The NSE Nifty has finally stagnated, and has moved into a corrective phase after breaching the upward sloping channel on the daily chart by closing below the lower boundary of the aforesaid channel. The Nifty has reflected some amount of resilience even despite this corrective phase, as an 1100 point upmove has been retraced by only 300 points (the retracement might not be over yet). Despite a brief flutter, the 5300 level has held firm, which would lead to a more obvious inference that a close below the 5300 level could finally drag the market lower. A 10-week move has seen just a two-week correction, indicating the possibility of some more time correction. However, since the current month is choc-a-bloc with events, it would be difficult to comprehend the anticipated movement of the Nifty.

The Mid- and Small-Caps too have taken a backseat, and have cooled off with the market to become market performers over the last few weeks. Banks have led the correction, while Capital Goods too have been under pressure. Consumer Durables have been better off, though still in a decline. FMCG has been marginally negative but has held on, and Pharma has been the strongest of the lot. IT too has been rather solid, while Metals have contributed to the decline. Realty has remained a distinct weak spot.

The Nifty has entered a much overdue corrective phase. While a further time/price retracement cannot be ruled out, support from the 5274 and 5182 levels could limit the downside, while the volatility is expected to remain omnipresent.

IOC LTD. | Buy CMP - Rs 284.15

1st Target: 312 (4-6 weeks) 2nd Target: 320 (12-14 weeks) Stoploss: 270 (cls)
Trading Pointers:
Indicators: MACD-Buy | RMI-Buy | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 272, 257 | Resistance: 290, 303
BSE Code - 530965 | 55-Week EMA: 301.07

IOC bottomed out by posting an intra-week low of Rs 205.50 during the week ended 22nd May, 2009, and these levels have rarely been seen since. The scrip launched into an intermediate uptrend to peak at an intra-week high of Rs 305.45 during the week ended 11th September, 2010. It couldn’t sustain these levels for long, and declined to post an intra-week low of Rs 274 during the week ended 30th April, 2010. The scrip commenced its uptrend from here, and rallied to peak at an intra-week high of Rs 458.90 during the week ended 24th September, 2010.

Currently, IOC 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.

PFIZER | Buy CMP - Rs 1240.55

1st Target: 1360 (4-6 weeks) 2nd Target: 1410 (12-14 weeks) Stoploss: 1180 (cls)
Trading Pointers:
Indicators: MACD-Buy | RMI-Buy | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 1200, 1151 | Resistance: 1266, 1329
BSE Code - 500680 | 55-Week EMA: 1237.30

Pfizer peaked at an intra-week high of Rs 864 during the week ended 19th June, 2009, and declined to post an intra-week low of Rs 711.05 during the week ended 17th July, 2009. The scrip launched into an intermediate uptrend, peaked at an intra-week high of Rs 1310 during the week ended 23rd July, 2010, only to enter a corrective phase, and declined to post an intra-week low of Rs 1030 during the week ended 3rd December, 2010. It staged a rally to peak at an intra-week high of Rs 1636.20 during the week ended 29th July, 2011, and entered a corrective phase.

Currently, Pfizer has reversed its direction after receiving significant support from the Rs 1150 level. A weekly close above the Rs 1639 level would mean the possibility of a further upside from here.

 

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