On Daily Charts We took support at rising trend line around 4945 and gave a wild and breath taking move which propelled nifty above it 20 SMA and 5 EMA.On Weekly charts we are seeing a rising trend line and if we cross 5210 in coming week short covering will propel us to higher levels.
Weekly Pivot:5107
Weekly Resistance:5269 5351
Weekly Support:5015 4853
On Daily Charts we have seen we are seeing a Avg. crossover og 20 SMA and 5 EMA which happened previously and nifty was propelled to higher levels.
Support at lower levels is at 5139 and 5099
On upside 5235 and 5377 will be resistance for Tuesday trading sessions.
Century Textile has formed a triple top at 510 levels.Stocks has bounced from its 50 SMA and trading above its 5 EMA.Buying is advised in the stock above 510 for a tgt of 513 518 and 526.SL 500
Escorts broke above its double top pattern with volume on friday.Stocks is a buy above 127 for a tgt of 129 131 137 support at 120
Reliace capital took support at 50 SMA and 61.8% Retracement lies at 861 considering the fall from 972 to 682.Target can be 868 876 891 920 SL 840 or below Support at 820.
TATA STEEL GOOD MED TERM BREAKOUT - TARGET 720
TATASTEEL has been trading above previous med term high of 585 for past two sessions and the volume is above average showing very bullish stance in medium term. It should target 745 with resistance at 700 and fibonacci target of 722. A BUY on any dip.
POWER GRID (109.50)
ACCUMULATE for a 1st target of 120 and 2nd target of 135 with a stop loss of 103 on closing basis.
Time Tenor: 2 Months
Power Grid is one of the largest transmission utility company in the world. Atleast 45% of the power transmitted in India is through its network. With government keen on divestment in power sector PSU and liberalisation of power sector this company stands to gain a lot.
While the bulls are eating Christmas cakes, the bears seem to be eating humble pie as the Nifty ended well above 5100 and is now eyeing a new high for 2009. Wednesday’s sudden surge would have taken many by surprise. We reiterate that further short covering is not ruled out ahead of the F&O expiry. Also, some long build-up may take place amid signs that the economy and India Inc. may do better.
But clearly, any rise will not be sustainable in the absence of incremental good news – local as well as global. Rich valuations and concerns on an impending reversal in stimulus steps are among the major headwinds. One should not get carried away by any sharp swings in the near term as the market remains in a consolidation phase. Today we expect a higher opening. Asian markets are mostly up. US market got a boost from technology space, though the blue chips closed flat. European shares hit 14-month high. With several holidays on the horizon, the market could yet again turn choppy and clueless.
Midcaps might outperform largecaps as they have not participated in the rally yesterday
Our favourite Hindalco gained more than 7 percent to close at RS 153. NTPC was another stock that has sprung to life after being subdued for a long time. The stock gained 7 percent to end the day at Rs 229. We have seen a broadbased rally with some window dressing by mutual funds coming in to play. There was some heavy year end fund buying in largecaps that helped the index. Expect some follow up buying today, but do not expect a repeat by the major indices today.
For a change, we have seen the Midcap and smallcap indices sidelined from the market activity as the Largecaps took the charge. Midcaps might make a come back today as they might catch up in today's trade. We recommend Deccan Chronicle for the second day in a row, even at these levels (Rs 168). also keep an eye on entertainment sector, watch out for stocks like NDTV, TV Today and last but not least Zee Entertainment Ltd.Penny pincher's might look at stocks like LML Ltd ad Lloyd Steel from a short term perspective
But clearly, any rise will not be sustainable in the absence of incremental good news – local as well as global. Rich valuations and concerns on an impending reversal in stimulus steps are among the major headwinds. One should not get carried away by any sharp swings in the near term as the market remains in a consolidation phase. Today we expect a higher opening. Asian markets are mostly up. US market got a boost from technology space, though the blue chips closed flat. European shares hit 14-month high. With several holidays on the horizon, the market could yet again turn choppy and clueless.
Midcaps might outperform largecaps as they have not participated in the rally yesterday
Our favourite Hindalco gained more than 7 percent to close at RS 153. NTPC was another stock that has sprung to life after being subdued for a long time. The stock gained 7 percent to end the day at Rs 229. We have seen a broadbased rally with some window dressing by mutual funds coming in to play. There was some heavy year end fund buying in largecaps that helped the index. Expect some follow up buying today, but do not expect a repeat by the major indices today.
For a change, we have seen the Midcap and smallcap indices sidelined from the market activity as the Largecaps took the charge. Midcaps might make a come back today as they might catch up in today's trade. We recommend Deccan Chronicle for the second day in a row, even at these levels (Rs 168). also keep an eye on entertainment sector, watch out for stocks like NDTV, TV Today and last but not least Zee Entertainment Ltd.Penny pincher's might look at stocks like LML Ltd ad Lloyd Steel from a short term perspective
Technical analysis is practiced in two main categories namely chart patterns and indicators. Indicators are calculations based on the price of a stock/ Index and indicates trends, volatility and momentum. Indicators are often compared to "pulse, pressure check" of a patient by the doctor to assess the extent of the illness. Indicators help you assess the market for its momentum, direction, etc.
Indicators are used as a tool to gain further insight into the supply and demand of securities. Indicators are used to confirm price movement and the probability that the given move will continue. Along with using indicators as secondary confirmation tools, they can also be used as a basis for trading as they can form buy-and-sell signals.
Indicators are of two main types - leading and lagging - both differing in what they show users.
Leading Indicators are those created to precede the price movements of a security giving predictive qualities. Two of the most well-known leading indicators are the Relative Strength Index (RSI) and the Stochastics Oscillator. I have often identified the reversal with the additional help from Stochastics.
Lagging indicator is one that follows price movements and has less predictive qualities. The most well-known lagging indicator is the MACD. The usefulness of this indicator tends to be lower during non-trending periods.
A leading indicator is thought to be the strongest during periods of sideways trading ranges, while the lagging indicators are regarded as highly useful during trending periods and produce fewer buy-and-sell signals which allow the trader to capture more of the trend instead of being forced out of their position.
The stochastic oscillator is calculated as a percentage of a security's closing price to its price range over a given time period. For eg: If a 5 day range of an index is 100 points and the index has closed to day 80 points up from that 5 day low, the stochastic will be 80, near overbought. Similarly if the index closes quite close to the 5 day lows, a mere 20 point away from it, the stochastic is 20, near oversold. The oscillator's sensitivity to market movements can be reduced by adjusting the time period or by taking a moving average of the result. In an upward trend the price should be closing near the highs of the trading range and in a downward trend the price should be closing near the lows of the trading range. When this occurs it signals continued momentum and strength in the direction of the prevailing trend.
This leading indicator will create many buy and sell signals that make it better for choppy non-trending(Sideways) markets instead of trending markets where it is better to have less entry and exit points.
The stochastic oscillator is plotted within a range of 0 and 100 and signals overbought conditions above 80 and oversold conditions below 20. The stochastic oscillator contains two lines. The first line is the %K which is essentially the raw measure used to formulate the idea of momentum behind the oscillator. The second line is the %D which is simply a moving average of the %K. The %D line is considered to be the more important of the two lines as it produces better signals.
There are two main ways this indicator is used to form buy and sell signals are through crossovers and divergence.
Crossovers occur when Stochastic moves up from below 20 or 30 to generate a buy signal or moves down from above 70 or 80 to create a sell set up. It signals that the trend in the indicator is shifting and that this trend shift will lead to a certain movement in the price of the underlying security.
Divergence occurs when the direction of the price trend and the direction of the indicator trend are moving in the opposite direction. This signals that the direction of the price trend may be weakening as the underlying momentum is changing.
There are two types of divergence - positive and negative. Positive divergence occurs when the indicator is trending upward while the security is trending downward. This bullish signal suggests that the underlying momentum is starting to reverse and that traders may soon start to see the result of the change in the price of the security. Negative divergence gives a bearish signal as the underlying momentum is weakening during an uptrend.
When it is combined with EW, the effectiveness increases as during 3rd waves, it tends to remain in the "Overbought" or "Oversold" for longer than usual. During such a 3rd wave, the lagging indicator,Macd, works well.
We, now, have trendlines & Channels, Pivots with supports & Resistances, leading(Stochastics) and lagging(Macd) indicators combination in a Trading system that forms the basis of our "Tech.Table". Note that we are not obsessed by any indicator or any method but each one contributing its worth as in a "Cohesive TEAM" that can lead you into any challenging trading day. What is the one most important team member missing.? The strategist who can peek into the opponents (Market's) next move. We will cover next the Strategist, Elliott wave.
Indicators are used as a tool to gain further insight into the supply and demand of securities. Indicators are used to confirm price movement and the probability that the given move will continue. Along with using indicators as secondary confirmation tools, they can also be used as a basis for trading as they can form buy-and-sell signals.
Indicators are of two main types - leading and lagging - both differing in what they show users.
Leading Indicators are those created to precede the price movements of a security giving predictive qualities. Two of the most well-known leading indicators are the Relative Strength Index (RSI) and the Stochastics Oscillator. I have often identified the reversal with the additional help from Stochastics.
Lagging indicator is one that follows price movements and has less predictive qualities. The most well-known lagging indicator is the MACD. The usefulness of this indicator tends to be lower during non-trending periods.
A leading indicator is thought to be the strongest during periods of sideways trading ranges, while the lagging indicators are regarded as highly useful during trending periods and produce fewer buy-and-sell signals which allow the trader to capture more of the trend instead of being forced out of their position.
The stochastic oscillator is calculated as a percentage of a security's closing price to its price range over a given time period. For eg: If a 5 day range of an index is 100 points and the index has closed to day 80 points up from that 5 day low, the stochastic will be 80, near overbought. Similarly if the index closes quite close to the 5 day lows, a mere 20 point away from it, the stochastic is 20, near oversold. The oscillator's sensitivity to market movements can be reduced by adjusting the time period or by taking a moving average of the result. In an upward trend the price should be closing near the highs of the trading range and in a downward trend the price should be closing near the lows of the trading range. When this occurs it signals continued momentum and strength in the direction of the prevailing trend.
This leading indicator will create many buy and sell signals that make it better for choppy non-trending(Sideways) markets instead of trending markets where it is better to have less entry and exit points.
The stochastic oscillator is plotted within a range of 0 and 100 and signals overbought conditions above 80 and oversold conditions below 20. The stochastic oscillator contains two lines. The first line is the %K which is essentially the raw measure used to formulate the idea of momentum behind the oscillator. The second line is the %D which is simply a moving average of the %K. The %D line is considered to be the more important of the two lines as it produces better signals.
There are two main ways this indicator is used to form buy and sell signals are through crossovers and divergence.
Crossovers occur when Stochastic moves up from below 20 or 30 to generate a buy signal or moves down from above 70 or 80 to create a sell set up. It signals that the trend in the indicator is shifting and that this trend shift will lead to a certain movement in the price of the underlying security.
Divergence occurs when the direction of the price trend and the direction of the indicator trend are moving in the opposite direction. This signals that the direction of the price trend may be weakening as the underlying momentum is changing.
There are two types of divergence - positive and negative. Positive divergence occurs when the indicator is trending upward while the security is trending downward. This bullish signal suggests that the underlying momentum is starting to reverse and that traders may soon start to see the result of the change in the price of the security. Negative divergence gives a bearish signal as the underlying momentum is weakening during an uptrend.
When it is combined with EW, the effectiveness increases as during 3rd waves, it tends to remain in the "Overbought" or "Oversold" for longer than usual. During such a 3rd wave, the lagging indicator,Macd, works well.
We, now, have trendlines & Channels, Pivots with supports & Resistances, leading(Stochastics) and lagging(Macd) indicators combination in a Trading system that forms the basis of our "Tech.Table". Note that we are not obsessed by any indicator or any method but each one contributing its worth as in a "Cohesive TEAM" that can lead you into any challenging trading day. What is the one most important team member missing.? The strategist who can peek into the opponents (Market's) next move. We will cover next the Strategist, Elliott wave.
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