DSIJ Mindshare

DSIJ's Technical Picks: Nifty In A Rebound

The NSE Nifty has moved along expected lines to stage a recovery. Though a belated one, the recovery is indicative of some positives in the near term. The short-term trend in the Nifty has turned up. It has posted a higher top, higher bottom scenario on the daily chart, indicating some clarity in the near term, which, needless to say, is bullish. A deeply oversold situation not only on the daily but also on the weekly chart, which was a direct consequence of a protracted decline over 13 weeks, seems to have finally laid the foundation of the current ongoing bounce, which, in technical terms, is a recovery and not a rally. A further upside seems like a distinct possibility. While the sustainability of this move at higher levels (especially around the 5155-5182 levels) seems rather suspect as of now, one would need to review the situation at that point.

Mid- and Small-Caps have also been reflecting similar strength, as they too have recovered, the former slightly better than the latter. Banks have led the rebound and Capital Goods have also staged a delayed recovery. Consumer Durables have been resilient but lacklustre, while FMCG has been docile but relatively solid. Pharma has been one of the better sectors. IT, however, continues to meander. Metals have also moved up, while Realty has finally stabilised.

The Nifty has taken its own sweet time to stage a fledgling recovery, which is expected to make some headway at least. The time has come again to buy first and sell later.

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BHARTI AIRTEL Buy CMP - Rs 302.30
1st Target: 324 (4-6 weeks) | 2nd Target: 333 (12-14 weeks) | Stoploss: 290(cls)

Bharti AirtelBharti Airtel bottomed out by posting an intra-week low of Rs 254.15 during the week ended 14th May, 2010, and these levels have rarely been seen since. It launched into an intermediate uptrend to peak at an intra-week high of Rs 376.50 during the week ended 1st October, 2010. The scrip couldn’t sustain these levels for long, and declined to post an intra-week low of Rs 304 during the week ended 12th November, 2010. It commenced its uptrend from here, and rallied to peak at an intra-week high of Rs 444.70 during the week ended 5th August, 2011.

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

Trading Pointers:
Indicators: MACD-Sell | RMI-Sell | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 297, 280 | Resistance: 318, 334
BSE Code - 532454 | 55-Week EMA: 345.37

BHEL Buy CMP - Rs 217.10
1st Target: 237 (4-6 weeks) | 2nd Target: 245 (12-14 weeks) | Stoploss: 207 (cls)

BHELBHEL peaked at an intra-week high of Rs 297.60 during the week ended 13th February, 2009, and then declined to post an intra-week low of Rs 250.20 during the week ended 6th March, 2009. The scrip launched into an intermediate uptrend, peaked at an intra-week high of Rs 477.10 during the week ended 12th June, 2009, only to enter a corrective phase, and declined to post an intra-week low of Rs 388 during the week ended 17th July, 2009. It staged a rally to peak at an intra-week high of Rs 539 during the week ended 8th October, 2010, and entered a corrective phase.

Currently, BHEL has reversed its direction after receiving significant support at the Rs 200 level. A weekly close above the Rs 220 level would mean the possibility of a further upside from here.

Trading Pointers:
Indicators: MACD-Sell | RMI-Sell Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 200, 184 | Resistance: 220, 237
BSE Code - 500103 | 55-Week EMA: 299.16

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CENTURY TEXTILES Buy CMP - Rs 280.75
1st Target: 304 (4-6 weeks) | 2nd Target: 315 (12-14 weeks) | Stoploss: 268 (cls)

Century TextilesCentury Textiles bottomed out by posting an intra-week low of Rs 145.55 during the week ended 27th February, 2009, commenced a short-term uptrend, and rallied to peak at an intra-week high of Rs 253.40 during the week ended 17th April, 2009. The scrip entered a corrective phase to actually bottom out by posting an intra-week low of Rs 200.05 during the week ended 24th April, 2009. It moved sideways before recovering to peak at an intra-week high of Rs 595 during the week ended 22nd January, 2010, only to decline from here.

Currently, Century Textiles seems to be on the verge of commencing a higher top, higher bottom formation on the daily chart, indicating the possibility of a further upside from these levels.

Trading Pointers:
Indicators: MACD-Sell | RMI-Sell | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 276, 261 | Resistance: 288, 302
BSE Code - 500040 | 55-Week EMA: 318.25

KARNATAKA BANK Buy CMP - Rs 76.55
1st Target: 86(4-6 weeks) | 2nd Target: 91 (12-14 weeks) Stoploss: 71 (cls)

Karnataka BankKarnataka Bank bottomed out by posting an intraweek low of Rs 54.60 during the week ended 13th March, 2009, took support at the Rs 55 (support) level, recovered smartly, and peaked by posting an intra-week high of Rs 92.57 during the week ended 15th May, 2009. It declined from here, struggled a bit, finally overcame its recently-posted high and entered a medium-term uptrend. The scrip appreciated to peak at an intra-week high of Rs 207.16 during the week ended 12th November, 2010, and entered a corrective phase.

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

Trading Pointers:
Indicators: MACD-Sell | RMI-Sell | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 71, 65 | Resistance: 78, 86
BSE Code - 532652 | 55-Week EMA: 96.35

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