Nifty levels for 21/10/2014

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#208 Nifty Update: Strong Modi Wave making it Difficult for "Bears" to stand out

Hail Modi and Hail Modi Wave on Nifty Index. In my lost post i tried to take on Bulls for some time but we couldnt stand against the strong storm from the west of Modi Wave. Me being a gujju surely want Modi to take seat at the centre but more than me it seems Nifty is wanting that result. Last time i took a closer from Daily chart and i cut my finger but this time i wont make that mistake as now i jumped to Weekly and Monthly chart directly to take a boarder view. Fundamentally, earnings have been better than expected for Non-IT stocks while IT stocks have not performed as per expectations due to stronger rupee. This is the perfect trait of a bull run start when IT and FMCG post weaker earnings compared to other sectors. Overall all the companies our performing better than last quarter. SunPharma buying stake in Ranbaxy and Lafarage and Holcim mergers were the most talked and looked last quarter. Though later deal is yet not finalised but important for India as Ambuja and ACC are part of Holcim. Many Midcap and penny stock are the best pockets to park your money currently. My picks are Leela, Sintex, and Suzlon as of now though they are high risk stock. US on other side is improving on their economy as suggested by data and stock market is at all time high. Coming back to Indian technicals, as you all can notice on the weekly chart of Nifty that index has just crossed a strong resistance line this week which was connecting the previous two highs of last year. This is the strong trait for analyst like me. On other line it is travelling between the strong steep upside channel making us bias towards Bulls. It has been taking strong support at 5 Weekly EMA.  Weekly indicators are approaching OverBought Zone but yet still havent confirmed it. Looking at monthly chart we getting a bigger picture on nifty which suggest a strong up move still from here. So now i am surely avoiding any short term trading call on index and rather go long and sit tight for a month or so. 6736 is strong support for this week and 6497 for coming weeks.

Our recommendation: We recommend to Go long and HOLD with tgts of 7200/7480 with SL of 6500 on closing weekly basis

*Note: All the words mentioned in my post are just correlated to nifty and please take position on my recommendation after through study and consulting your advisor. Trade at your risk

#202 Nifty Update: Off-Road driving by Nifty

Nifty was driving high speed on the road and it has just slipped off the road today. As you all can notice in the chart Nifty has just breached a strong upside channel today and closed above that level. It had been facing strong resistance at this line for last five times but on the 6th time it just hit a 6 out of the boundary completely. Our third tgt 6211 has been achieved on our long call on Nifty re-initiated at 4th February. We have seen some re-initiating buying interest by FII in indian stocks. High delivery positions have been witnessed in the fair valued stocks in Index as well as in the mid-cap sector. Economy around the world has been showing some signs of improvement starting with the Euro zone. Portugal has seen 1.6% growth and Moody might give it a stable rating from Negative stable. UK has given some growth at 0.5% which is better than nothing. Still Japan is in deflation mode and it is trying turn themselve. Can Abenomics save them? April will say!!! Indonesia is the economy to watch in this next cycle. People say that it can outperform emerging markets in terms of Growth rate from this point. Coming back to Nifty technical it has just taken strong support on 50 Daily SMA and for the 2cd consecutive day it has closed above 100 daily SMA situated at 6163. If Tomorrow it closes about the same level than it gives confirmation for the bulls. Nifty has seen some increasing trend in the volumes in last three session. Expiry being tomorrow, its gonna be a high volatile session.

Our Strategy: We are intact with the Hold on Long with final tgt 6263 and a Extended risky tgt of 6310 . Trailing SL comes down to 6100