NIFTY View For Week 19 Jan -23 Jan
Nifty
at an interesting juncture. As expected Nifty has reached higher end of
the range which comes at 8500-8600. Volatile world markets caused
Indian markets swing a lot. RBI Governor, in a surprising move, cutting Repo Rate by 0.25 basis points has cheered markets on Thursday. Market mood is positive.
Technical Overview: Last week Nifty made high of 8530 and low of 8236. A range of almost 300 points. The
broad range of 8100-8600 is intact. New support emerges at 8235-8310.
Resistance is intact at 8500-8600. Markets sounding bullish. We hope
this resistance would be broken soon. If Nifty moves down near our
support at 8300 before breaking 8600 resistance, then that would be good buying opportunity. If Nifty Breaks above 8600, I expect it to move to 8850 in short period of time.
Short Term (Few days to a Week) : Short term trend is positive. Nifty can move ahead to 8570. Buy on dip. Every fall in Nifty is a buying opportunity. Short term traders can go long near small support at 8400.
Medium Term (Few weeks to a month): Trend is positive in medium term too. One can go long in Nifty for target of 8800. One can accumulate Nifty from current level and on dip (If Nifty pulls back to this level) till 8250. Short selling is not advised in this market.
Long Term (Few months to Year): Strong
buying at bottoms is usual sign in Bull markets. We may be at a
juncture at which buying can give us the best returns ever. I hope our long term investors would have bought some value stocks at near this bottom. We are bullish on Nifty in long term
View on important Sectorial Indices:
BankNifty has beat our last week's target of 11900. BankNifty can see a pullback up to 18700. Longs can be initiated at level of 18700.
We had indicated at level of 11700. This was tested on Thursday. CNX IT is at resistance. May see a small correction till 11400.
All other indices except Metal are looking Bullish on chart. Metal can see upward relief rally.
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Recommendations of the week:
Last week Target met in Wockhardt Pharma and Hexaware Technologies. Total Profit 16750.
BHARATFORGE (Buy): Buy Bharat Forge near 1019 for a target of 1034. Maintain stop loss at 998
CIPLA(Buy): Buy CIPLA near 647 for target of 655. Maintain stop loss at 638
IGL (Buy): Buy Indraprastha Gas near 467 for target of 480. Maintain stop loss at 449
Above prices are spot prices and profit/loss calculated with 1 lot
Learning Curve:
A trade consist of 3 elements- 1. Entry 2. Exit with Profit (Target) or 3.
Exit with Loss (Stop loss). A trader must know values of all these 3
parameters before entering into a trade. Once the entry (Buy a stock or
Short sell a stock ) is
done, there are 2 probable outcomes- Exit with profit or Exit with
Loss. As a trader if you maintain your loss at min 1/3 of Profit, then
you can be successful as a trader.
For example - you Buy stock ABC at Rs 100/- and maximum risk you want to take in that stock is Rs 3, then your Stoploss will be at Rs 97. In this scenario, you target should be at Rs 10. This makes Risk Reward Ratio as 1:3.
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