Technical Check & Outlook 29/9/09
After a long time previous week was an extremely choppy week where Spot Nifty moved within a narrow band of 132 points. During the week Spot Nifty made high of last fifteen months at 5036 and cooled down a bit to end the week at 4958.95 down by 17.10 points or 0.34%. BSE Sensex closed at 16693 with a net loss of 48.30 points or 0.29%,
BSE Midcap index closed at 6226.93 up by 55.70 points or 0.90%, BSE Small cap indices closed at 7450.25 gaining 76.61 points or 1.04%.
The volume was bit lower in comparison to the previous week's volume and the breadth of the market was mostly positive. Technically speaking, if we look to the Spot Nifty weekly candle stick chart, a spinning top formation has emerged which suggests indecision / a probable turn around at the end of the prolonged upmove. Presently the intermediate trend is up and the trend line support exists at 4900-4920. Presently Spot Nifty is moving above all its extreme short, medium and long term moving averages. If we look to the momentum indicators in the weekly chart MACD is in BUY mode, apart from that Stochastic oscillator and 14 weeks RSI is hovering in the overbought zone but there is no sign of any weakness as yet. Previous weeks closing suggests that the situation is still in favour of the bulls. Unless Spot Nifty 4900 is breached there might not be any prolonged weakness, on the contrary if Spot Nifty clears 5050 with volume it may proceed towards 5150/5250 mark. So next week in evidence of moving northward Spot Nifty will face initial resistance around 5050 which is a strong resistance zone , breaching which Spot Nifty may zoom towards 5150 mark followed by 5250 strong resistance zone.
In the downside 4900 will offer initial support followed by 4800 mark and thereafter 4700 will offer very good support which is also a multiple bottom zone from where Spot Nifty has bounced back couple of times in the recent weeks.
Global markets were looking bit corrective after the recent rally.In the commodity space consolidation were witnessed in the early part of the week where Gold (993$) and Silver (16.1$) were in the corrective mode towards the end of the week. Crude (68.2$) tumbled very badly on higher US inventory pile up. During the week US Dollar again made multi month low against its major cross currencies however it was able to recoup some of its lost strength at the fag end of the week. On the other hand Indian Rupee gained some strength against USD and ended the week near 48.03 mark. Stock Trading Ideas 29/9/09 Stock to Watch Wipro Ltd (567.15) Strategy & Target -
Wipro Ltd has good support at 565 levels. We feel stock could see some bounce back and could goto 585 levels in short term.
IFCI Ltd (56.30) Startegy & Target - IFCI looks good on charts. We feel as stock is going to be included in Nifty could see institutional buying in coming days. Our target for hte stock 59 - 63
Jindal Steel & Power Ltd (597.10) Strategy & Target: Jindal Steel & Power Ltd has corrected sharply in last week. We feel stock could see fresh buying the stock on dips. Our target 615 - 630
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