DSIJ's Technical Picks: Nifty In A Rebound
5/31/2012 9:05 PM Thursday
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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