Sunday, April 3, 2016

Next destination 7900? – Nifty View for week 4-8 Apr

In this newsletter, I will try to explain bigger picture of Nifty and some major stocks, as, this is first analysis after end of Jan-March quarter. 
Last week Nifty saw a sea-saw move to finally end up near high. I had indicated at choppy trading for last week. We have seen Nifty rising one day and falling the other.  Last week global markets traded in green and are now trading at higher end of the curve. RBI policy on Tuesday can play catalyst role in deciding further direction.  
What to trade this week? 
Technical Overview: Last week Nifty made high of 7777 and low of 7582 to close at 7713. Choppy trade last week has formed hanging man on weekly chart. This suggest exhaustion of buyers. Nifty and Banknifty both are trading at higher end of the curve. Do not forget that for medium term we are in uptrend. For this trend to confirm on a larger scale Nifty need to convincingly cross hurdle of 7972. For the time being let's assume that this is a buy on dips market. 
For short term, current range need to break above 7750, which is current resistance. This can give us target of 7860.  
Support is at 7690 and 7652.  
My View: Nifty is currently trading in a range. Medium term, uptrend suggesting us that one should buy nifty on every dip. Bit of bad commentary, rate cut lesser than 50 bps in RBI policy on Tuesday can easily evoke Nifty for a correction. 7600 remains a crucial level. If Nifty closes below this level- we have some reasons to worry.  
We are entering into a new quarter. Last quarter high for Nifty 7972. Nifty need to take out this level. Most major charts have formed hammer-ish pattern on quarterly chart and bullish engulf on monthly chart. However most of them could not close beyond their quarterly highs. That’s some reason to worry.   
My picks for coming quarter would be Hero Motocorp, Reliance, Tatasteel, TCS, Sunpharma, ITC, INFY. Stocks under pressure can be Cipla, HDFC, Dr Reddy, Bhel, Gail. 
Check the influence areas (supports and resistance on chart below) 
Note: Do not consider these as buy or sell recommendations.  
Some of our current gainers in Prime Cash portfolio are - 
DALMIA SUGAR- Up 60%, GEOMETRIC – Booked at gain of 28%, SBI- Up 21%, ADANIPORT – Up 13% 
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