NIFTY View For Week 9 -13 March
In a surprise move RBI reduced repo rates by 25 BPS.
This caused sudden euphoria in markets last week. We are trading in
stable market conditions. We presume that markets would remain stable for some time to come. Small corrections is healthy and inevitable part of market mechanism. Use these dips to go long in good stocks.
Technical Overview: Last week Nifty made high of 9120 and low of 8820. A range of almost 300 points. We have to look at what happened to Bank Nifty
to understand why Nifty moved down by 125 points in single day on
Thursday. Bank Nifty had strong Distribution Zone (Area of Resistance)
at 20475. On the news of RBI rate cut markets have gapped up. It was
expected that markets would move further up from there. Many retail
traders would have bought Bank Nifty future on gap up. However this was a
Bull Trap. Bank Nifty opened in strong Resistance area and moved down from there.
Naturally, since many bank stocks are heavyweight in Nifty Index too, it has acted as catalyst to pull down the Nifty.
What Next?
We have been consistently saying that Nifty is in Bull run and the corrections should be utilized to Buy at lower levels.
Nifty has support in the zone of 8830-8750 and small resistance formed near 9060. This week may see a range-bound activity for Nifty.
Short Term (Few days to a Week) : Trading on long side may be done in Nifty. One can buy Nifty Future in dip near 8830. Maintain stop-loss near 8750
Medium Term (Few weeks to a month): Medium term traders can buy Nifty at current level and hold it for rally of 200-300 points from here.
Long Term (Few months to Year): Nifty long term up trend is intact.
Hourly Chart of Nifty
View on important Sectoral Indices:
Bank Nifty seen substantial fall after gap up opening as explained earlier in this post. After a wide range activity Bank Nifty may consolidate for some time. However we remain Bullish on Bank Nifty and buy on dip is suggested in Bank Nifty
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Last week Target achieved in all calls i.e. WIPRO, SKSMICRO, MARUTI. Total Profit 27,750.
ADANIPORT (Buy): Buy ADANIPORT near 333 for a target of 343. Maintain stop loss at 327
LICHSGFIN (Buy): Buy LIC Housing Finance near 495 for a target of 509. Maintain stop loss at 483
HCLTECH (Buy): Buy HCL Tech near 2065 for target of 2110. Maintain stop loss at 2035
Above prices are spot prices and profit/loss calculated with 1 Futures lot
I am discontinuing Learning Curve in this article. However the same will be continued in a separate post on my Blog. Keep watching this space (My Blog- http://bonvistaplanners.blogspot.in/)
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