The Nifty finally closed at 5358, after recording a high of 5366 level. Nifty has closed strongly by witnessing rising gap in Friday's session, which lead index to register weekly close above cluster of moving averages.
Currently the index is forming a rising wedge pattern on daily chart. In the near future index is likely to consolidate at higher levels. The index has an immediate resistance at 5400 followed by swing high of 5448 levels.
On the downside index has strong support in the range of 5310 -5275 levels.
We believe it is a good sign but the pockets of strength remain. Pharma, FMCG and IT continue to remain strong. We believe that this will continue for this series. We look positively in these sectors whether it is Cipla , Aurobindo Pharma or Dr Reddy they all look good in the pharma space. In FMCG, you can carry a position in Dabur , ITC those corrected today but, can be looked at positively. These are the stocks which are looking positive now
* Investors' anxiety may increase as the prolonged wait for much touted reform measures gathers further pace next week, ahead of RBI's policy meeting on Sept. 17.
* Indian stock markets are keenly watching if the government can push forward FDI and fuel price hike via executive decisions as the monsoon session of the grid-locked parliament ends on Friday.
* Markets also await key macroeconomic data next week. July industrial output data to be released on Sept. 12 and August headline inflation on Sept. 14.
* Data points will also be key ahead of RBI's monetary policy review on Sept. 17.
* Markets expect August inflation at around 7 percent and IIP growth to be flat to slightly negative.
* Hopes of Fed launching another bond-buying programme got a boost after ECB's action. Investors will look to U.S. jobs data due at 1230 GMT for further hints.
* Indian stock trading in both Bombay Stock Exchange and National Stock Exchange will be opened for 1-1/2 hours on Saturday, Sept. 8 as the BSE is testing its disaster recovery software.
The top five trading ideas for the week are:
Hexaware Technologies:
The price of Hexaware had registered a breakout from a key resistance during February 2012. Thereafter the stock retested the breakout level and consolidated at higher levels. The share price has broken this consolidation and closed near new 52-weeks high.
The stock has also been sustaining above its cluster of moving averages over the past few sessions of trade which is also a bullish sign. The momentum indicators are in rising trajectory and are in buy mode.
Hence, we recommend buying on dips between Rs 131—132 levels with a stoploss placed below Rs 129.40 levels, for targets of Rs 138.50 and Rs 144 levels.
Dr Reddy's Laboratories:
The share price of Dr Reddy's Laboratories registered breakout from an ascending triangle pattern on Saturday. The stock has also sustained above its cluster of moving averages.
The momentum indicator is also rolling upward. The above mentioned evidences suggest that the stock is likely to head towards the levels of Rs 1,778 - 1,814 in the near future.
We recommend a buy at current level and again on dips up to Rs 1,705—1,718 with a stoploss placed below Rs 1,673.80 for the above mentioned targets.
HDIL:
The price of HDIL has been trading upward after registering 52-week low of Rs 52.05 level. Currently the stock has once again taken support from rising trend line. On the weekly chart the stock has formed a bullish candlestick pattern.
The stock is also trading above its near term moving average. The momentum indicator has exited from oversold zone and registered a fresh breakout.
Traders can look to buy at CMP and again on dips to Rs 70.50 - 71 with a stoploss placed below Rs 69.40 levels for targets of Rs 74.50-76.50 levels.
Godrej Industries:
The price of Godrej Ind. has been trading in a narrow range after registering a high of Rs 283.35 level. This consolidation has taken a form of a descending triangle pattern. In this week the stock has registered breakout from above mentioned pattern.
The stock is also trading above its cluster of moving averages as well as lower Bollinger band. The momentum indicator has turned into buy mode which displays strength in the counter.
Thus, traders can look to buy now with a stop loss placed below Rs 251.80 levels, for the target of Rs 270 -278 - 284.
IRB Infrastructure:
The share price of IRB Infrastructure is about to register breakout from an ascending triangle pattern. The stock is also sustaining above its cluster of moving averages.
On the intraday chart the stock has registered a breakout from a rising inverted head and shoulder pattern. The momentum indicator is gaining upward momentum. The above mentioned evidences suggest that the stock is likely to head towards the levels of Rs 135-138 in the near future.
We recommend a buy sustaining above Rs 129 with a stoploss placed below Rs 124.40 for the above mentioned targets.
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