Email
Print
ShareCapitalise on any short-term rise and exit at right levels
Sensex (18,115.25): As a result of the sharp recovery in the past few days, the daily trend has now turned bullish, even as theweekly trend remains bearish.
Short-term traders may look to buy on weakness as the daily trend is positive. The weekly trend is also supportive of the continuation of the uptrend, as the index is still in the oversold territory.
We are essentially looking at a good tradable bounce that traders and investors should capitalise on. The short-term target for the index is 18,800-19,000 and the next resistance is at 19,600-20,000. Traders may look to buy on dips (at support levels) with an initial target of 18,800.
As observed in earlier weeks, it would be prudent to let the market indicate the direction of the long-term trend. Though the possibility of a retest of the panic lows recorded last month is still not ruled out, investors need not worry about this event now.
This issue can always be addressed when critical support/resistance levels are taken out.
The focus should be to capitalise on the short-term bounce and exit at the right levels. Traders may look for support levels and position themselves for a rally, first to18,800 and then to 19,500. A failure to move past 18,900 and a fall below 17,300 would indicate the start of the move towards 15,300-15,500.
Nifty (5,303.9): After a sharp fall on Monday, the index staged an impressive recovery since Wednesday. The short-term trend is bullish and the index could test the resistance zone at 5,560-5,620 mentioned in earlier weeks. A close above 5,620 could lead to a spike to 5,850-5,900.
From a medium-term perspective, a fall to the support zone of 4,450-4,600 is still the favoured view. It would take a lot of churning and a nice tradable rally before the next major move to the downside occurs.
The focus for the short-term should be to buy at appropriate levels with an initial 5,575-5,600. A close below 5,050 would indicate that the index is headed towards lower levels. Stop loss for long positions may be placed at 5,050.
CNX Midcap (7,216.25): The short-term outlook is bullish and a move to 7,500-7,650 appears likely. A close past 7,650 could push the index to the more crucial resistance zone at 8,280-8,350.
A close below 6,750 would negate the possibility of a rally to 8,280-8,350.A failure to clear 7,500 and a drop below 6,750 would indicate that the index is headed towards 5,650-5,800.
Key pivotals:
GAIL (Rs 428): The short-term outlook is bullish and a move to Rs 475-480 appears likely. The bullish view would be invalidated on a close below Rs 389. Long positions may be considered on weakness with a stop loss at Rs 389.
There is a fair chance that the stock could hit the major resistance zone at Rs 495-515. Traders may take partial profits at the first resistance zone at Rs 475-480 and use a trailing stop in the event of a move past Rs 480.
Axis Bank (Rs 1,027): Even after the recent sell-off, the technical picture of this stock is still bullish across all time frames. A move to Rs 1,135-1,155 appears likely over the short term. There is a minor resistance at Rs 1,085-1,095; a close above this zone could pave the way for the surge to the next target zone.
A close below Rs 965 is required to negate the possibility of a rally to Rs 1,135-1,155.
NTPC (Rs 204): The stock could move to the target zone of Rs 240-245. This view would be valid if the support at Rs 189 is not breached.
A close above the short-term resistance zone at Rs 217 would confirm the bullish view. Long positions may be considered on weakness with a stop loss at Rs 189.
Stock of the week:
Petronet LNG (Rs 75.4): The short-term trend is bullish and the stock could move to Rs 92-95 in the near term. Stop loss for long positions may be placed at Rs 68.
The bullish view and the possibility of a rally to Rs 92-95 would be negated on a close below Rs 68. Investors may use price weakness to build long positions.
Given the overall market condition, it would be imperative for traders to adhere to money management concepts and have the discipline to get out of positions when a stop loss is hit.
Note: The analysis and views expressed in this column are based on the technical analysis of historical share price action. There is a risk of loss in trading. Views and targets are arrived at by using the Elliott Wave Theory and Point & Figure technique. The author does not have investment exposure in the stocks discussed above. Comments and feedback may be sent to
bkrish16@gmail.com
