Archives : 3400 - 3450 - STRONG RESISTANCE ZONE - 09/04/2009.
3400-3450 – Strong Resistance Zone 09/04/2009.

Last week we clearly mentioned the pattern target for the Nifty was 3399 and just check how much the Nifty reached before profit booking set in. The Nifty just about managed to kiss 3401 and retraced! We were on the mark.

 

Any way the market has reached the resistance zone and as a result the market was experiencing profit booking at the Sensex zone of 10900 and Nifty around 3400. The critical resistance for the Sensex is at 10900-11350 and for the Nifty is at 3400-3450, which will be required to be crossed in order to sustain the bullish momentum. The market has already rallied around 29% from the lows and is now on the way to test the 200dma which is at Sensex 11342 and Nifty 3437. It will be difficult to close above these levels, but any close above these levels, will usher in a strong rally of short covering and instill some more confidence in the bulls, but till then one will experience some profit booking at higher levels. The focus in the coming week will shift to the results season, which kicks off in the next week.

 
  • SENSEX.
  • NIFTY.
  • Strategy corner:
  • LAST WEEKS RECOMMENDATIONS:
  • this weeks recommendations:
  • WATCH OUT FOR: 
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3400-3450 – Strong Resistance Zone 09/04/2009. 

Last week we clearly mentioned the pattern target for the Nifty was 3399 and just check how much the Nifty reached before profit booking set in. The Nifty just about managed to kiss 3401 and retraced! We were on the mark.

 

Any way the market has reached the resistance zone and as a result the market was experiencing profit booking at the Sensex zone of 10900 and Nifty around 3400. The critical resistance for the Sensex is at 10900-11350 and for the Nifty is at 3400-3450, which will be required to be crossed in order to sustain the bullish momentum. The market has already rallied around 29% from the lows and is now on the way to test the 200dma which is at Sensex 11342 and Nifty 3437. It will be difficult to close above these levels, but any close above these levels, will usher in a strong rally of short covering and instill some more confidence in the bulls, but till then one will experience some profit booking at higher levels. The focus in the coming week will shift to the results season, which kicks off in the next week.

SENSEX.

Sensex opened the week at 10521, made a high of 10932, made a low of 10171, and closed on Thursday at 10803, thus registering a weekly gain of 455 points.The Sensex has formed a White Bullish Candle on weekly charts. The Sensex was tested, when on Wednesday it went down to 10171 and bounce ferociously.The Sensex is slowly moving toward testing of 200 DMA which is falling at 11342. The zone between10945-11350 will prove to be a strong resistance zone and hence will attract some profit booking.The 50DMA, 100DMA & 20DMA are almost overlapping at around 9250 levels, which will act as a strong support area.The indicators like MACD & ROC are positive and are suggesting further momentum. RSI, at 75 is slowly entering overbought territory.While moving up Sensex has left two gaps viz. 9706-9739 and 9921-10107 and according to gap theory Sensex targets falls at 11398-11981.The Trendline Resistance is at 10883, which is where the Sensex is being tested right now. A close above this will lend further Bullish momentum. Trendline Support is at 10071.For the week ahead the Resistance is at 10945-11361-11501-11870. Support is at 10507-10239-10171-9911. 

NIFTY.

Nifty opened the week at 3211, made a high of 3401, low of 3149, and closed on Thursday at 3342. Thus the weekly gain was 131 points.Nifty has formed a Doji formation o daily charts suggesting uncertainty, whereas o weekly charts it has formed a Bullish White Body. The Nifty was tested, when on Wednesday it went down to 3149 and bounce ferociously.The Nifty is slowly moving toward testing of 200 DMA which is falling at 3437. The zone between 3399-3437 will prove to be a strong resistance zone and hence will attract some profit booking.The 50DMA, 100DMA & 20DMA are almost overlapping at around 2850 levels, which will act as a strong support area.The indicators like MACD & ROC are positive and are suggesting further momentum. RSI, at 75 is slowly entering overbought territory.Nifty 3400 CALLS has seen lot of addition in Open Interest. So it will prove to be a resistance in the near future.The Nifty has Trendline Resistance at 3383. The Trendline Support is at 3217-3113.

For the week ahead, the Resistance is at 3437-3558-3648. Support is at 3307-3198-3046-2962.

Strategy corner:  

Bull Call Spread ICICI Bank.

This Week Construct a Bull Spread for ICICI Bank (397), which is expected to reach 433.

So Buy 400 CA at 23 and Sell 420 CA at 17. Max profit will be 14 (Rs. 9,800) and Max Loss will be the net premium outflow which will be 6 (Rs. 4,200).

LAST WEEKS RECOMMENDATIONS:  

Last week once again we achieved 100% success as all our targets reached with ease. The real superstar was IBREAL which went up by almost by 28% in just 3 days flat!!!

  • BUY RIL 1661 TGT was 1765 Reached 1767.
  • BUY BEL 909 TGT was 960 Reached 979.
  • BUY FINTECH 680 TGT was 722 Reached 720.
  • BUY LITL 162 TGT was 178 Reached 181.
  • BUY EDUCOMP 2339 TGT was 2428 Reached 2445.
  • BUY IBREAL 110 TGT was 134 Reached 141.

this weeks recommendations:
  • BUY Tata Steel 261 SL 253 Tgt 271-280-298.
  • BUY ICICI Bank 397 SL 384 Tgt 419-433-453.
  • BUY CESC 248 SL 241 Tgt 257-263-276.
  • BUY Escorts 45 SL 42 Tgt 49-52.
  • BUY IRB Infra 104 SL 97 Tgt 112-118.
  • BUY LIC Hsg 282 SL 271 Tgt 294-303.
 WATCH OUT FOR: 
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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