Archives : TECH STOCKS LIFT THE MARKET - 15/01/2010

TECH STOCKS LIFT THE MARKET - 15/01/2010.

SUPPORT ZONE SAVES THE DAY.

INFOSYS, TCS BEAT EXPECTATIONS.

TECHNICALLY SPEAKING.

 

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TECH STOCKS LIFT THE MARKET - 15/01/2010. 

SUPPORT ZONE SAVES THE DAY.

We suggested last time that strong support for the Nifty exists in the zone of 5180-5152 and the Nifty exactly took support at that support zone before staging strong recovery during the course of the week. Nifty did not even breach the previous week low which was at 5167 and managed to bounce from just above that level. Hence the support zone gets more credibility. Many support points are converging in that zone and hence we attach strong significance to that zone.

 

Even after bouncing back, the resistance around Nifty 5294-5310 is getting increasingly difficult to breach. Sluggishness sets in when the Nifty nears that level. Market has now become more and more stock specific and hence it is advised to choose stocks for trading instead of concentrating on the Nifty.

INFOSYS, TCS BEAT EXPECTATIONS. 

The market was correcting when Infosys sprang a real surprise in the form of its pleasant but unexpectedly strong numbers. The market got a strong lift in the form of good results and once again Tech Stocks led by Infosys helped the market to recover. TCS results came after the market shut shop on Friday but were better than what most analysts had expected. Not only did the bottom line show significant improvement but the increase in operating margin was a surprise too. The start of the earning season has been bullish and lets hope India Inc continue to surprise the market by posting strong results.

TECHNICALLY SPEAKING. 

The Sensex opened the week at 17724, made a high of 17776 a low of 17276 and closed the week at 17554. The Sensex closed the week with a minor gain of 14 points. Similarly Nifty opened the week at 5263, made a high of 5300, a low of 5169 and closed the week at 5252. The Nifty closed with a weekly gain of just 8 points.

 

Sensex has formed a Bearish pattern on the weekly charts which almost resembles a Hanging Man formation. This can lead to bearish start to the next week. The Nifty has formed a Doji on the weekly charts which means the market is in doubt regarding the current uptrend and now the next weeks candle will throw some light on the direction the market wants to take.

 

Both Sensex and Nifty are on its way to achieve the target of the Ascending Triangle breakout given two weeks before. Current phase is just a consolidation with a slight negative bias. Hence the target for the Sensex remains 18740 on the lower side and 19299 on the higher side; and for the Nifty 5586 on the lower side and 5717 on higher side. These targets will be achieved as long as the Nifty holds the support zone of 5180-5152. But more importantly it is necessary that the Sensex cross 17790 and Nifty 5310 immediately or else one can expect a retest of the Nifty support zone 5180-5152.

 

If we consider the entire fall for the Sensex from 21206-7697, then the next retracement target will be at 78.6% of this fall and which is at 18315. Similarly the 78.6% of the entire fall of the Nifty (6357-2252) falls at 5478. In short, both Sensex and Nifty can be expected to move towards 18315 and 5478 respectively.

 

Nifty OI PCR is quite healthy at 1.49. Call writing is visible at 5300 strike and Put writing is seen at strike of 5100. Hence one can presume that the market will move between 5300 on the higher side and 5100 on the lower side in the short term.

 

The Trendline support for Sensex is at 17216-16973. Trendline Resistance is at 17833.

The Trendline support for Nifty is at 5180-5145. Trendline Resistance is at 5332.

For the week ahead, Sensex will face resistance at 17735-17842-18182 and will find support at 17448-17276-17023.

For the week ahead, Nifty will face resistance at 5310-5368-5394 and will find support at 5214-5180-5152. 

INDEX LEVELS: 

 S3S2S1CLOSER1R2R3
Nifty5152518052145252531053685394
Sensex17023172761744817554177351784218182

LAST WEEK’S RECOMMENDATIONS:

It was a week full of ups and downs where Grasim and Aban did very well while Cairn and HCC could not reach their targets.  

STOCKReco. PriceTgt ReachedLot SizeProfit
Buy Cairn3063143101250Rs.5,000
Buy Grasim275728622889176Rs.23,232
Buy LiCHsg836858855425Rs.8,075
Buy HCC1571651602100Rs.6,300
Buy Aban147815221539400Rs.24,400
    TotalRs.67,007

THIS WEEK’S RECOMMENDATIONS: 

STOCKCMPSLTgt-1Tgt-2
Buy BEML1207118612461284
Buy Neyvelli169165176183
Buy FinTech1620158616871728
Buy CentTex587577605621
Buy TCS791784807822

 WATCH OUT FOR:

Fin Tech

BEML

Disclaimer : The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. No representations can be made that the recommendations contained herein will be profitable or that they will not result in losses. Readers using the information contained herein are solely responsible for their actions. Information is obtained from sources deemed to be reliable but is not guaranteed as to accuracy and completeness.

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