SENSEX - 30750 & NIFTY – 9090.
I take this opportunity to wish all my readers a very happy and bullish 2008. May you grow your wealth like never before. All sort of predictions are made for the new year and I too have to indulge in this. I feel that the new year 2008 will be very bullish for the market as the current outgoing year. The market will continue to stay in the long term uptrend, with intermittent bouts of correction thrown in. Therefore all investors and traders will do well to remember that we are in a super long term structural bull market and any sort of correction should be used as a buying opportunity. As in the long term, the correction though may be vicious, generally are short lived and hence one would be well advised to buy all correction. As all correction will be more or less just footnotes in the history of the Indian stock market.
Markets witnessed strong rollover in the new series, infact more than 81% Nifty futures were rolled over to the next month. This was the highest rollover witnessed in recent times. On the day of the rollover Nifty future closed at a 40 point premium, which indicates that lot of long positons were added. The current month rollover suggest strong market for the month of January. Some stocks to watch out for in the Jan series will be RPL, RNRL, Hindalco and Arvind.
Sensex opened the week at 19308, maintained the same as the low and made a high of 20323 before closing the week at 20206. Thus the weekly gain for the Sensex was 1044. The RSI indicator and the MACD are positive and show further upside. The trendline resistance is at 20584-21175. The trendline support is at 19422-19301. The trendline support at 19301 is very critical as this has been supporting the Sensex during the last three falls and is coinciding with the 50 DMA and hence that support should not be broken at any cost. For the week ahead the resistance is at 20323-20584-21113. Support is at 20014-19780-19550.
Nifty opened the week at 5771, maintained the same as the low, made a high of 6111 and closed the week at 6079. The weekly gain for the Nifty was 313 points. The indicators are suggesting good upside from the current levels in the short to medium term. The trendline resistance is at 6245. The trendline support is at 6016-5909-5767. The support at 5767 is critical as this is also coinciding with the 50 DMA and hence for the up trend to remain intact that support should not be broken. The Nifty OI PCR is 1.28 which shows the presence of hedged positions in the market. Lot of open interest has been added at the strike of 5900 and which will act as strong support in any correction. The 6200 calls have added significant open interest, which will act as strong resistance. For the week ahead the resistance is at 6111-6185-6245. The support is at 6016-5909-5860.
NEW YEAR SUPER STARS- 2008
SENSEX: Sensex has formed a pattern which suggest that for the year ahead Sensex will atleast have a minimum target of 25624 to 30750 on the higher side.
NIFTY: Nifty has a formation which suggest that minimum target for the new year will be 7637 to 9090 on the higher side.
ARVIND: 89 : The target in the new year will be 143-196-245. The outlook will remain positive above 70.
HINDALCO: 212 : One of the worst performers of all time. But the new year will be very special for this Birla company and may well turn out to be the script of the year. The targets are 302-382-555. The outlook will be positive as long as it remains above 160.
TATA STEEL: 931: The target will be 1475 to 1850 and the outlook will be favourable as long as the script remains above 650.
STERLITE OPTICAL: 331 : The script will be one of the multi bagger of the year 2008 and it has targets of 518 and 939. The outlook will remain positive above 265.
ALSTOM PROJECT: 999 : The script has a target of 2210 and the outlook will remain favourable above 800.
HOW TO TRADE?
One can construct a bull call spread for Arvind 89. The target is 102.
One can buy SCI 306 and hedge it with Nifty future. SCI tgt is 350.
LAST WEEK’S RECOMMENDATIONS:
ONCE AGAIN WE ARE BACK WHERE WE BELONG 100 % SUCCESS.
CMC @ 1190 TGT 1290 REACHED 1435.
NIIT @ 137 TGT 146 REACHED 152.
GUJ ALKALI @ 246 TGT 256 REACHED 265.
STERLING BIO @ 165 TGT 173 REACHED 180.
HINDALCO @ 199 TGT 217 REACHED 217.
NUCLEUS SOFT @ 350 TGT 374 REACHED 374.
THIS WEEK’S RECOMMENDATIONS:
ALOK 103 SL 99 TGT 110-116.
JP HYDRO 136 SL 131 TGT 145-153.
ARVIND 89 SL 86 TGT 94-102.
BEL 2097 SL 2020 TGT 2170-2230.
TATA STEEL 931 SL 911 TGT 954-1015.
FINANCIAL TECH 2578 SL 2515 TGT 2679-2740-2854.
NTPC 241 SL 237 TGT 253-260.
WEBEL SL ENERGY 600 SL 550 TGT 700-770.
WHIRLPOOL 56 SL 53 TGT 63-69.