Nifty during the whole week has been in a trading in a range between 3550-3700 it appears mainly due to the electoral results. As is wants to decide on which way to go after the results are over and which government will form. As now stable governments is going to form which will be going to last for next five years we might see the markets trending up at-least for the current week. I may be noted that nifty has completed 10 weeks of continues rise and it appears to be heading for the next target of 13 weeks so wait and watch as the market marches ahead. It may also be noted that nifty is maintaining above the 200 day Moving average for the last one month indicating the bulls are in control of the market and also 20 day EMA has moved above the 200 Day EMA after nearly 15 months indicating that bulls are taking control of the market and we might see further upsides for the market. As the market is above 200 Day EMA firmly and also stable government at center we might see markets heading further upside and it appears that long term investments can be made with a stop loss when ever market fall below the 200 day EMA.
It can be seen from the above that nifty is still maintaining in the upward channel starting from 2500 levels. Till that channel is intact there is no problem for bulls. It may also be noted that there is a healthy divergence between Indices and Elder bull ray and RSI and other oscillators which are pointing that even though market is raising bulls are loosing battle in their course and bears are slowly entering the market. The divergence in the elder bull ray is a very powerful are it is clearly indicating the bulls are loosing ground. The divergence does not indicate that we should short the market no no never go against the trend. Till the upward channel is intact don’t ever try to short the market and it pays to go long the upward channel support line is at 3600 and till market does not go below 3600 no need of worry for bulls. So just follow the trend. It may be noted that nifty might be heading for 3850 which is 61.8% of the fall of the last wave from 4500 to 2500 levels so 3850 is going to be a formidable resistance as far as elliotte wave is considered. It may also be noted that the yearly pivot is at 3856(of Jan to Dec 08) So we might see bulls taking a breather at 3800 to 3850 levels and then make an attempt to move further.
Directional Momentum index
As indicated in my last weeks update bulls have taken firm grip on the market. DMI has moved from 42 to 38 levels indicating that bulls are loosing ground but still in control of the market. As the DMI is near 40 we can see a huge volatility in the market with upward bias in the market.
Turtle Trading: - 20 days phenomenon;
Current Indication – buy Generated at 2850
Longs may be closed on movement below – 3367
Shorts may be initiated on close below 3297
ATR is at 111.
Individual Stocks:
Bharti Shipyard:109
Bharti Ship yard is a fundamentally good stock which has fallen from its high of above 800 to around 50 levels and currently it is at 109. I has moved above the 100 day EMA after nearly 15 months and also 15 day EMA has just moved above the 100 day EMA indicating that bulls are just coming into the stock and also it may be seen in the above chart that the volumes during the last week are so were very huge indicating that good amount of accumulation has gone into the stock and it might be heading further upsides. It may also be noted that for the last one year or so the stock has been making lower highs and lower tops and during the month of may it has made a higher top and higher bottom indicating the trend might has just reversed. So technically an excellent stock and if Fibonacci ratios are applied the stock should at-least reach 170 in next two to three months. Stop Loss: Rs.90/-
M.Sri Mahidar
Sunday 17th May 2009 9.00 PM IST
Trend is friend
No comments:
Post a Comment