NIFTY Event Day what probably be is in store ?

                                                     NIFTY Daily Chart

·    NIFTY after a stellar pre-election rally around 8% thanks to ‘Ab Ki Baar Modi Sarkar’ have been consolidating from couple of trading sessions in the range 7078 – 7172 take a breather

·     As election a big event trigger wild swings can be anticipated tomorrow (16th May 2014)

·     After a gap up on 13^th (May 2014) from 7020 - 7067 index has formed a Shooting Star and Doji pattern on daily charts indicating cautious outlook for short term traders

·    The key trend decider for NIFTY for warning on downside 7078 and 7020, If breaks 7000 support are around 6873 / 6680 / 6254 and upside fresh longs can only be created above 7180 – 7200 for targets of 7301/7445/7501

·      Option traders should have a cautious standing due to the event even out of the money options have been at higher premiums. Any move against the positions or consolidation can erode the premiums swiftly

Scenario 1:

In case strong stable government comes in with majority i.e., NDA getting 280+ and NIFTY crosses above 7180 – 7200 euphoria can be seen and further resistance can come for the Index around 7301/7445/7501.

As Metals, Infra, Oil & Gas and PSU banks are in strong bullish trend further euphoric moves can be seen in these sectors. Quick 10 – 20% gains can be made in selective stocks.

Stock Picks 

Andhra Bank    :   Buy around 70 – 72 rang with stop loss of 68.50 for targets of 80 – 82

Tata Steel         :   Buy on any dips around 450 – 460 with stop loss of 437 targets of 500 and 540

 Federal Bank   :    Buy around 99 – 101 with a stop loss below 95 for target of 110 - 111

Reliance          :    Accumulate from CMP (1038) up to 990 on any dips with a stop loss of 954 for targets of 1146/1175/1200

Scenario 2:

In case of a fractured mandate or less than 250 seats for NDA, which even as per the lower band of polls is mostly unlikely still anything can be possible as polls went wrong dramatically in last two elections. Although NDA may form government with outside support, but with collation weak government can delay the reforms can see a sharp sell-off.

Technically NIFTY below the gap support of 7020 – 7000 can see a sharp profit booking or sell-off up to 6870/6680 which can be next key immediate supports. Sector wise beta stock which have run up swiftly can fall same way is well such as Banks, Infra and metals.

HDFC Bank – Sell around 800 – 820 with a stop loss of 835 for targets of 756/740/720

Note:   As the volatility would be higher and wild swings to be anticipated take comfortable positions with strict stop loss or buy options which one can afford to lose.  

Raju V Angadi

Equity Research Analyst

Disclaimer: This is just an view based on the research of individual for educational purpose. So kindly trade along with the consultation of your financial adviser, 

market trends

, price action and own risk appetite considered while investing or trading in markets

Is the election lead hope rally on CNX NIFTY leading to euphoria or technicals in specific sectors have left with more steam left ? (updated ....)

CNX METAL and INFRA indices have outperformed the broader indices (NIFTY) clearly almost by 10+% now 3120 and 3150 respectively from 12th May 2014 till date. As discussed in our previous article, "Price discounts everything except the acts of god". Even the simplest of basic technical analysis along with price confirmation and understanding of supply demand indicators can assist one to make wise investing and trading decisions.

Although Indices have moved up in the range of 12 - 16% till date, they cant be actively traded. We will list some of the stocks which were recommended to our paid subscribers and their performance. The stocks in the respective sectors have given a whopping returns of 15 - 50% returns in just 8 trading sessions.

Raju V Angadi

Equity Research Analyst

Disclaimer: This is just an view based on the research of individual for educational purpose. So kindly trade along with the consultation of your financial adviser, market trends, price action and own risk appetite considered while investing or trading in markets

We will start of with the election buzz in India. Of course election result of a biggest democracy in the world is the too bigger event and the stable government can lead to revival in economy and GDP growth but not in a day. The markets are set on fire on the hope of "Ab ki baar Modi Sarkar" by huge FII inflows and the volatility index is at 5 - year highs as NIFTY is trading at record highs. Well its better to discuss what charts and price action suggest, which are vital for investing/ trading objectively in a process rather predicting the election outcome for which others are there. Because according to the Charles Dow - "Price discounts everything expect the acts of god". 

As I believe in doing what you know and appropriate price with favorable risk/reward ratio is to invest/trade objectively. Let's check with simple technicals of couple of indices which can provide an insight about the favorable risk/reward investments/trades below in coming months ahead.

CNX METAL

CNX Metal Weekly Chart

CNX Metal has broken out of a 2.3 years down trend and have confirmed a higher top higher bottom formation, which has been a laggard in most of the bull market. The pattern in index suggest minimum targets of 2800/2870/3000.

The good stocks to watch out for are Tata Steel, NMDC and SSLT which can add up to 20+% returns from current levels.

CNX Infra

                                                               CNX Infra Weekly Chart

CNX Infra has broken out of a inverse H & S pattern on weekly charts suggesting a pattern targets of 3400.

Charts suggest still there is left some of the beta counters but one needs to be selective in which stocks to opt in this speculative environment.

Note: Any buying in stocks is better to hedge with puts as election is a big event and technically there is a Shooting Star and Doji formation in Daliy charts below 7078 cautious outlook needs to be taken and below 7020 confirms an Exhaustion gap confirmation and NIFTY can fall steeply. Trade/ Invest wisely and objectively as markets are at higher end in a speculative environment.

Raju V Angadi

Equity Research Analyst

To know more about probable counts analysis on NIFTY, BANK NIFTY, CNX METAL, CNX INFRA and other indices along with 5 stocks for the month check out our newsletters and advisory services contact us back on rvangadi@googlemail.com (OR) swingresearch5@gmail.com (OR) +91 78291 55900

     

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Disclaimer: This is just an view based on the research of individual for educational purpose. So kindly trade along with the consultation of your financial adviser, market trends, price action and own risk appetite considered while investing or trading in markets