March 14, 2014
Weekly Nifty and Sector Technicals RETAIL RESEARCH
Nifty 6504.20
Perspective
Support
Resistance
Bearish
5410 – 5350
6565 – 6700
200 Day EMA 6058
Weekly Pick SUN PHARMA
Observation: Week’s action formed a spinning top candle on weekly chart which indicates tug of war between bulls and bears. From the perspective of wave, one major impulse leg has ended at 6347 levels which is marked as “wave 1”, the rise from 5118 to 6343 had clear five wave structure (internals labeled as i-ii-iii-iv-v). After the end of “wave 1” Nifty fell and “wave 2” seems to have ended at 5933 (If index sustains at higher levels then we can confirm that “wave 2” has ended); which is a “complex corrective pattern”-(Double combination internals are W-X-Y). If the price moves above 6585 then only we can confirm that this rising leg is a new impulse and next probable upside target would be 6700 - 7150 in medium term. Alternatively, if the price falls below 6432 then we could say that “wave 2” still in progress with “Irregular B” in “wave y” and we can see index would slide toward 6350 or below. Traders could act according with the levels and our preferred expectation is index would come down initially. On a move above 6585 the bullish target is 6700 – 7150 levels; alternatively as long as price stays below 6585 then index could slide down toward 6350; In simple terms hold shorts with the stoploss of 6585.
RETAIL RESEARCH
S&P CNX Nifty Daily
Observation: Day’s action formed a bull candle with good volumes which indicates bulls are gaining some momentum. In the first half of the day, index fell down and moved near the 1st target of 6410 (low made 6432) but later the index turned back and moved up; however index still remains in the bearish setup and traders can hold the shorts with the same stoploss of 6585 for the target of 6410 – 6350. Technically, index has taken minor support near to the 23.6% retracement level of last rising leg and bounced well from the low. But it still trading below the crucial supply zone of 6565 – 6585. As long as price stays below the 6585 levels, the prevailing down trend remains intact. The price has completed or almost completed a rising leg. And it is in the progress of retracing the last rising leg from 5984.60 to 6563. The key retracement level 38.2% is placed at 6350 levels.
The daily oscillator like RSI is hovering in the overbought zone.
RETAIL RESEARCH
Sector Snap Positive Sector
Negative Sector
Name
CMP
Resistance
Name
CMP
Support
BSE TECH
4922
5030 - 5075
BSE CON. DURABLE
6116
5950
Observation: Positive Sector: BSE TECH daily chart indicates a positive bias for the short term; price has almost completed the falling leg and almost tested the 123.6% extension levels. Bullish trigger would emerge above 4966. On rise above 4966 index would in the progress to cover the gap of 5030 - 5075. Overall index is heading towards 5030 - 5075 levels. Negative Sector: BSE CONSUMER DURABLE daily chart is showing negative outlook for the short term. Index has created the crucial supply zone at 6240 and started retracing the last rising leg. Sell trigger could emerge if index falls below 6060. On fall below 6060 index would be in the progress to test 38.2% retracement level of last major rising leg. Overall index is sliding down toward 5950. Last Week’s follow up:
We had stated that BSE POWER index could rise towards 1650 - 1680 levels. In line with our expectation the index has almost attained the 1st target of 1650 - High made during the week is 1643. The (Last week close 1611).
We had given negative outlook in BSE HEALTHCARE; we had indicated that BSE HEALTHCARE index could slide down toward 10000. In line with our expectation the index has fell down and it yet to attained the target 10000 - Low made during the week is 10080 (Last Week close 10370).
RETAIL RESEARCH
Weekly Pick Stock Pick
Observation
SUN PHARMA
The stock is showing positive bias for the short term.
CMP : 582.05
Price has completed the corrective leg and now it is on the verge of starting a new retracement leg.
Recommendation
The last falling leg is Impulse and the internals are 5-3-5-3-5.
Buy
Now price is showing strength and it could retrace the last fall initially toward 604 which is 50% retracement level of fall from the 653 to 552.
: Buy between 580 to 570
Stoploss : 560 (Close)
In addition price is forming double bottom at 553 levels. Target
: 604
Time
: 3-10 Days
RETAIL RESEARCH
The momentum oscillator like RSI is placed with positive bias. Traders could buy the stock between 580 to 570 with the stoploss of 560 on closing basis for a target of 604.
Note: Once the market opens for trade, the analyst will review it and decide to give the call through an internal mail/SMS at the same or different levels of entry, target and stop loss or not give the call at all or give a call in Futures/call/put. Clients could get in touch with the analyst through their designated dealers to check about this.
Analyst: Gajendra Prabu (
[email protected])
HDFC securities Limited, I Think Techno Campus, Building ‘B’, “Alpha”, Office Floor 8, Near Kanjurmarg Station, Opposite Crompton Greaves, Kanjurmarg (East), Mumbai – 400042, Fax: (022) 30753435 Disclaimer: This document has been prepared by HDFC securities Limited and is meant for sole use by the recipient and not for circulation. This document is not to be reported or copied or made available to others. It should not be considered to be taken as an offer to sell or a solicitation to buy any security. The information contained herein is from sources believed reliable. We do not represent that it is accurate or complete and it should not be relied upon as such. We may have from time to time positions or options on, and buy and sell securities referred to herein. We may from time to time solicit from, or perform investment banking, or other services for, any company mentioned in this document. This report is intended for non- Institutional Clients only
RETAIL RESEARCH
