DSIJ's Technical Picks: Nifty Still Not Making Progress

The NSE Nifty has moved along expected lines to run into a virtual roadblock just shy of the 5200 level. While the 5155-5182 range has held firm, this range now can be expanded just a wee bit to the 5190 level on the upside. In fact, the Nifty has spent the last 12 trading sessions moving sideways between 5020 on the downside and 5190 on the upside, while a continuous supply has prevented it from taking out the aforesaid range decisively. Despite multiple attempts, the highest closing for the Nifty over the last fortnight has been the 5165 level posted on 21st June, 2012. Needless to say, a close above the 5190 level is a must if any upside is to materialise, while a close below the 5020 level could vitiate the technical picture for the time being. Sustainability at the higher levels remains elusive.

The Mid-Caps and Small-Caps too have been reflecting similar sentiments, as both haven’t made much headway and continue to struggle. Banks have gone nowhere, Capital Goods have struggled to gain ground and Consumer Durables too have remained subdued and rangebound. FMCG has been one of the better performers, while Pharma has been a smidge better but has made no real progress. IT has slipped. Metals have also stagnated and Realty has been choppy and in a tight range.

The Nifty has held on without making any progress, and the lack of directional bias will remain until there is a decisive breakout on either side.

CASTROL INDIA | Buy | CMP - Rs 508.35
1st Target: 564 (4-6 weeks) | 2nd Target: 579 (12-14 weeks) | Stoploss: 480 (cls)

Castrol India bottomed out by posting an intra-week low of Rs 232.50 during the week ended 11th September, 2009, and these levels have rarely been seen since. The scrip launched into an intermediate uptrend to peak at an intraweek high of Rs 442.40 during the week ended 11th June, 2010. It couldn’t sustain these levels for long, and declined to post an intra-week low of Rs 403.70 during the week ended 16th July, 2010. The scrip commenced its uptrend from here, and rallied to peak at an intra-week high of Rs 588.35 during the week ended 8th July, 2011.

Currently, Castrol India 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.

Trading Pointers:

Indicators: MACD-Sell | RMI-Sell | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 501, 476 | Resistance: 539, 560
BSE Code - 500870 | 55-Week EMA: 483.49

GSPL | Buy | CMP - Rs 66.30
1st Target: 74 (4-6 weeks) | 2nd Target: 80 (12-14 weeks) | Stoploss: 62 (cls)

GSPL peaked at an intra-week high of Rs 41.85 during the week ended 9th January, 2009, and declined to post an intra-week low of Rs 26 during the week ended 23rd January, 2009. The scrip launched into an intermediate uptrend, peaked at an intra-week high of Rs 104 during the week ended 4th December, 2009, only to enter a corrective phase, and declined to post an intra-week low of Rs 82 during the week ended 26th February, 2010. It staged a rally to peak at an intra-week high of Rs 128.25 during the week ended 22nd October, 2010, and entered a corrective phase.

Currently, GSPL has reversed its direction after receiving significant support from the Rs 63 level. A weekly close above the Rs 69 level would mean the possibility of a further upside from here.

Trading Pointers:
Indicators: MACD-Buy | RMI-Sell | Stochastic-Buy | ROC-Buy | RSI-Buy
Support: 63, 56 | Resistance: 69, 77
BSE Code - 532702 | 55-Week EMA: 81.45

HCL TECH. | Sell | CMP - Rs 464.60
1st Target: 415 (4-6 weeks) | 2nd Target: 390 (12-14 weeks) | Stoploss: 490 (cls)

HCL Tech. bottomed out by posting an intra-week low of Rs 89.10 during the week ended 13th March, 2009, commenced a short-term uptrend, and rallied to peak at an intra-week high of Rs 350.50 during the week ended 18th September, 2009. The scrip entered a corrective phase to actually bottom out by posting an intra-week low of Rs 276.50 during the week ended 6th November, 2009. HCL Tech. moved sideways before recovering to peak at an intra-week high of Rs 528.40 during the week ended 21st April, 2011, only to decline from here.

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

Trading Pointers:
Indicators: MACD-Sell | RMI-Sell | Stochastic-Sell | ROC-Sell | RSI-Sell
Support: 460, 429 | Resistance: 491, 523
BSE Code - 532281 | 55-Week EMA: 460.43

IRB INFRA. | Sell | CMP - Rs 123.65
1st Target: 106 (4-6 weeks) | 2nd Target: 99 (12-14 weeks) | Stoploss: 132 (cls)

IRB Infra. bottomed out by posting an intra-week low of Rs 76.25 during the week ended 27th March, 2009, took support at the Rs 80 (support) level, recovered smartly, and peaked by posting an intra-week high of Rs 154 during the week ended 29th May, 2009. The scrip declined from here, struggled a bit, and finally overcame its recently-posted high. It entered a medium-term uptrend, appreciated to peak at an intra-week high of Rs 312.80 during the week ended 27th August, 2010, and then entered a corrective phase.

Currently, IRB Infra. could be commencing a short-term downtrend. With the oscillators looking negative, a further downside from these levels cannot be ruled out.

Trading Pointers:
Indicators: MACD-Sell | RMI-Sell | Stochastic-Buy | ROC-Sell | RSI-Sell
Support: 118, 130 | Resistance: 107, 95
BSE Code - 532947 | 55-Week EMA: 161.39