As indicated in last weeks update nifty has continued its upward journey. Nifty has decisively broken the 3240 barrier during the week without any hitch. It has been indicated in the last weeks update that this time the bulls are having strength and nifty will easily go past the barrier of 3240 and nifty has done the same. Nifty is precariously placed near the 200 day EMA which is at 3401. Nifty just touched it and reversed from those levels. Any body who is short on the markets can continue to hold the same till 3401 is taken out. If 200 day EMA is taken out the long-term bulls will come to the market which will further fuel the upward movement of the market. So in the coming week’s nifty close above the 200 day EMA is the significant event to be watched for. Nifty is also placed at the down ward sloping line drawn from the top of 6357 nifty has just moved above it on Thursday and we have to see whether it sustains there or not. One of the significant events which has taken during the week is that is that the weekly DMI has given a buy signal, it has given a sell signal on 25th January 2008 and you know how nifty has fallen from there. If you see from the low of the bull market in April 2003 DMI has given buy signal five times and this is the sixth time and every time it has given a buy signal nifty bulls have dominated the scene and nifty has risen on an average 800 to 1200 points highest being 2000 points and the lowest being 600 points so considering this we can safely assume that nifty has all the possible chances of raising at-least 600 points from the current levels which give an indication that we might see 4000 in the coming months. With regard to the time periods and the points of rise I will try to furnish the same in the next weeks update.
Another point to be noted is that nifty has been raising continue sly raising for last 5 weeks and 5 is a Fibonacci and we have fair chances of nifty correcting from the current levels, if nifty does not correct then we can see nifty raising continuously for another two weeks means upto first week of may. Nifty has also formed a doji star on daily charts indicating that bears have just finding strength and we might see nifty correcting from the current levels to 3200 to 3100 levels which would be a healthy correction and give necessary fuel to bulls for further rise.
Another point to be noted is that 20 day EMA has moved above the 50 day EMA and is just trying to move above the 100 day EMA Signifying that bulls are back into the business and will try to take nifty further up.
Nifty is in extremely over bought zone in the intraday hourly chart and is showing –ve divergence for nearly two to three days indicating that correction is round the corner. Correction if which happens should be taken as an opportunity to go long as we might see nifty moving up in a big way in the coming weeks to months.
So technically it appears that better days for bulls are coming.
Elliotte wave Analysis: As per Elliotte wave there is nothing new to be indicated what has been indicated in last weeks update holds well as of now. We will update it when ever significant thing happens.
Directional Momentum index
As indicated in my last weeks update bulls have taken firm grip on the market. DMI has moved from 29 to 32.79 levels indicating that bulls have gained upper hand. +D1 line is above –D1 line and is still rising indicating that bulls are slowly and steadily coming into the market and taking control of the market.
Nifty Swing Trade:
As per two day swing trade currently it is in buy mode and the trend will reverse on move above the 3158 level (future). As per swing trade it appears that nifty is on its way up as there is tremendous buying coming whenever it falls. If NF goes below 3158 it has chances of moving towards 2951 and there after 2915 The points being discussed in the swing trade are that of the future.
Current trend – buy ( generated at 3140)
Reversal Value - 3158.
Banknifty
Current Price - 4591(future)
Current Trend – buy
Reversal Value - 4257
It appears the Bankek has formidable support at 4500 any move below 4500 should be taken as an opportunity to short bankek with stop loss at 4550/-
Individual stocks:
IDBI Bank: Rs.55
Tehnically speaking it appears that this is one of the best stocks to buy at this price with very limited down side technically. IDBI has broken out of a three fan principle which has been shown in the above chart. Generally on break out from the three fan principle implies that the stock has reversed trend and it has all the fair chances of making a new high. At this time it appears to be too long( or a foolish) target but technically speaking it should achieve that level. The all time high is around 180 level so nearly 300% rise from the current levels. So just grab the stock with a stop loss at 45/-.
ICSA – Rs.98/-
ICSA has broken out of the eight months trend line and the break was on very very high volumes suggesting that genuing buying has gone into the stock and that upsides for the stock are not ruled out. It is an fundamentally good stock and is technically also showing strength indication that genuine buying has gone into the stock and it might move up from current levels towards 150 and 200. Stop loss of Rs. 80/-
This is one of the fundamentally good stocks which is showing tremendous strength at current levels. Off late volumes has also increase significantly and it has move above the 20/50 and 100 day EMA and is just place above 100 day EMA. It moved above 20 and 50 day EMA only during the aug and sep the then fell viciously . but this time it appears to be different from the last one and it appears that the stock appears to be on a course up as it have started to move up after five months of consolidation. The next resistance appers to be at 320 and there after 500 levels. Stop loss: 175/-Resistances: 3400/3500
Supports: 3300/3250/3150/3100/3000
M.Sri Mahidar
Sunday 12th-April-09, Time 9.00 PM IST
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