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Date: 24th July- 2011
Last week Nifty made a low of 5532 before giving a dramatic reversal in sentiments and closed at 5634.
The week past was full of volatility and unexpected surprises. Currently as stated earlier 5650 is the much awaited and crucial level to watch out for the ensuing uptrend to be joined by the masses. Although 200 DMA placed at 5717 may give a weak resistance this time as has been tested several times in past months. The daily chart is showing morning star formation which indicates bullishness in coming weeks. One should also watch the double bottom formation happening in weekly chart.
Daily momentum indicators are also in conformity with the bullish view. Successful breakout of 5650 can take the market towards 5900 after a lot of testing times in the past fortnight.
Reliance has been in intermediate downtrend since April 2011 , The daily chart appears to show bullish consolidation and much awaited level is 885, successful breakout of this level can initiate a change in trend as depicted and take it to 900, 935 levels.
For state bank of India 2500-2525 is acting as the great wall of china, has tried many times to break it but in vain, we still maintain the view that it can touch 2690-2700 levels if this wall is broken, SL to watch in this case would be 2430.
After showing a very range bound action last week between 568-586 it closed at an upper range of 584 after testing its monthly average. We maintain our bullish view once the range is broken. On higher side
Levels to watch out could be 610 which has been proving multiple resistance to this counter.
Date: 17th July- 2011
NIFTY ( cmp 5581)
The nifty touched a low of 5497 last week before giving close of 5581. Currently its poised at a very crucial level of make or break situation. The small retracement of last four days from 5497 could be a part of preparation for a downtrend to resume which can
take it to 5400 and thereafter 5200 if broken; trigger for this event to unfold would be if index trades below 5530.
The possibility of uptrend will be strengthened only after 5650; therefore fresh longs should be initiated after this point only for a target of 5750 and 5900.
The bullish kicker formation and index respecting the support of trendline on the daily chart is showing positive signals.
Our preferred view: Nifty is taking good support of an upward sloping trendline as depicted in the chart; one should wait for the breach of 5530 before taking any short position. Long position should be taken after breach of 5610.
RELIANCE (cmp 873.20)
Reliance looks positive in the short term, the presence of Bullish Harami candle, multiple doji’s and morning doji star along with stock ceasing to make fresh lows suggest bottom formation. Currently the stock has managed to trade above its monthly average of 862; one should go long in the counter above 880 for a target of 900-909. Suitable stop loss would be 860.
A strong close above 910 calls for further addition and wait till 935. Bullish engulfing in the weekly chart augurs well for the counter.
SBI (cmp 2474.90)
Major suppy zone for SBI stands at 2500-2525 level, the presence of shooting star in the daily chart is showing ensuing weakness to come. One should go short in the counter below 2460 for a target of 2350-2370. Further weakness can be confirmed only after strong close below 2350.
Long traders should avoid his counter until it crosses 2525 for a target of 2700.
TATASTEEL (cmp 573)
Tatasteel is broadly moving sideways for past ten weeks in the range of 615- 550.
It made bullish Harami pattern last week and move up last week but failed to cross its monthly average of 584 to close at 573 after a sell off. Short position can be initiated on the breach of 567. It has strong support at 545-550.Strong close below 545 can drag the stock to 520 and 500 levels in the coming weeks.
Long position can be initiated only above 585.