NIFTY View For Week 2 Feb -6 Feb
Last week ended amid huge volatility. Markets can not rally one way. Pullback
is an inevitable part of a rally. Last week markets over extended the
gains. The obvious reaction was seen on Friday. Do not forget, we are in
bull run. Index may experience a pullback, still individual stocks may
keep rallying.
Technical Overview: Technical indicators were showing Nifty in overbought territory when it was trading above 8900. Last week Nifty made high of 8996 and low of 8775. A range of almost 220 points. Nifty closed near low of the day and low of the week. This is indicating more downside in the week to come. Volatility is expected to continue. Support ranges are 8700-8630 and 8550-7450. The new resistance is formed near 8900-9000
Short Term (Few days to a Week) : For short term traders Nifty can offer good trading opportunity in coming week. One can sell Nifty Future near 8850 (spot price) for a target of 8750.
Medium Term (Few weeks to a month): In
Bull markets Short selling over medium term becomes tricky. However
this seems to be a genuine pullback giving us move of more 200- 400
points. Traders can sell Nifty and can book profit near our support of
8650.
Long Term (Few months to Year): A
buying opportunity being created by markets. Long term traders can
start staggered buying once markets stabilize at lower level. Do not
just buy in hurry. Wait and watch and then start buying in smaller
quantities.
View on important Sectorial Indices:
Bank Nifty is expected to see pullback and may move down to 19400 and 18300 level.
CNX is a better chart compare to other sectoral indices. It may continue to upward journey in coming week.
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Recommendations of the week:
Last week Target met in BHEL and Sl Triggered in RPOWER and CAIRN. Total Loss 8100.
HDFC (Sell): Sell HDFC Ltd near 1262 for a target of 1230. Maintain stop loss at 1295
MINDTREE (Buy): Buy Mindtree near 1321 for a target of 1350. Maintain stop loss at 1200
ADANIPOWER (Buy): Buy Adanipower near 52 for target of 54. Maintain stop loss at 50.50
Above prices are spot prices and profit/loss calculated with 1 Futures lot
Learning Curve:
Money
Management is another important aspect of trading. It is advised that
one should skew his positions in the high probability stocks. Suppose
you are holding a portfolio of 5 stocks. Out of these 5 stocks you are
ok with 2 stocks, confident with 2 more stocks and very very
confident about 1 stock that it will surely hit your targets. You may
tend to put more money in this last stock. Do not do that. Things may
not works your way always. Spread your money equally in all the
positions that you are holding. Create a basket which offers equal space
to all the fruits. This will make your portfolio run smoothly without
major drawdowns.
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