The runaway to budget and expiry…
We step into a very important week of trading in terms of event and functionality, the union budget due later in this week and f/o expiry on Thursday will keep markets very busy , volatile , deceptive and choppy.
Technically the markets took supports at around 4750 levels on the nifty and remained in a range with huge volatility and uncertainty , and bounced to retest 4850 levels but could not sustain and met selling pressure with sectoral shifts.
Amidst the huge volatility the markets have generated an undecisive pattern with crucial supports at 4800 levels and looks like a period of consolidation with sideways movement.
However the markets are in a reactive zone and big reactions will be witnessed , so one needs to be cautious and trail proper stoplosses with discipline.
On the upper side the indices will face stiff resistance at 4950 levels , a successful crossover and trading above it will intimate a sustainable counter rally upto 5050 levels atlest , which is also a logical target above 5050.
The indices have reacted from the 200 dema and is likely to retrace 68% of it and then give a good upmove , so one requires a patient trading strategy with deeper stoplosses as the movements will be fast on both sides and will hit stoplosses on both long and short trades.
The markets are currently providing opportunities to trade on both sides , so one must be very quick to avail it.
From a trading point of view one must refrain from huge shorts and try to buy dips and stay long as long as 4800 holds , a trade below 4800 indicates weakness with 4680 as a major support level.
The supports for the nifty is at 4800 levels and resistance at 4950 levels.
The supports for the sensex is at 15600 levels and resistance at 16700 levels.
Stocks to watch for investment perspective
Assam company – a small company in terms of price in tea sector is seeing good accumulation on charts from a very long period , the company is trading at 3 times the earning of FY12, which intimates a bright future for the company , from an investment point of view , the company looks good to be bought at current levels , also the company is in such a sector whose demand will never get exhausted , the stock can prove to be a multibagger in years to come
India infoline – a stock broking company with its arm spread all over India has a good opportunity to rise in coming period , we believe that country will witness a major bull run in coming years , so with every rise the major beneficiary will be stock broking companies , the stock looks good to be bought and prove to be a candidate for double – triple from current levels in coming times.
Walchandnagar industries – we covered the stock in year 2006 , when no one knew about the name and the stock proved to be a dynamite and touched 13500 levels from just rs 250 and gave bonuses and splitted to trade at current market price , decades old company with solid management and low equity , no debt and high opm the company is a sure dynamite again in coming years and will reward a patient investor
