Financial Daily from THE HINDU group of publications
Sunday, Nov 27, 2005
Financial Daily from THE HINDU group of publications Sunday, Nov 27, 2005 |
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Investment World
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Technical Analysis Markets - Stock Markets Positive outlook for the Nifty B. Krishnakumar
NIFTY (2683) Preferred view: The market action was in sync with expectations. The trend turned bullish after the index passed through the expected short-term correction in the first couple of trading sessions. The index has also moved to the target zone of 2670-2680 that was mentioned in the recent weeks. The short-term outlook is positive and a move to 2740-2750 range appears likely. Short-term weakness may be used to enhance long positions. The positive outlook would be in force as long as the index holds above 2400. A close below 2550 would be an early indicator of trend reversal; a drop below 2400 would confirm the onset of an intermediate bearish trend. Stop-loss for long positions may be placed at 2600. Long-term investors may have the stop-loss at 2600 for a portion of the holding and at 2550 for the balance. Fresh long positions may also be considered on price dips, with a stop-loss at 2600. Comments: After a bearish trend in the first couple of days, the trend turned distinctly positive in the remaining three days. The recovery in the price of Reliance Industries, along with the smart rally in banking and auto sector stocks helped the index stage a sharp upward move. Quite a few fundamentally sound mid-cap stocks, too, managed to attract market interest. ABB and Siemens were prominent among the gainers. Heightened market interest was also evident in the stocks from the cement sector. The positive outlook for quite a few index heavyweights tends to confirm the positive outlook for the index. Long-term view: The index appears to be headed towards the 3000-mark in the long term. This view would be valid as long as the index holds above the long-term negative trigger level of 2300. SENSEX (8889) The index moved in line with expectations and moved to the target zone of 8850-8860 that was mentioned last week. It was quite an eventful week with the index moving past the earlier historic high of 8821. The short-term outlook is positive and a move to 9020-9050 range appears likely. This view would be invalidated on a close below 8500. CNX IT (3598) The price pattern traced out by the index was in similar to that of other major indices. The CNX IT index also ruled firm and appears on course to move to our target zone of 3700-3750. This view would be in force till such time 3450 is not taken out on the downside. Stop-loss for long positions may be placed at 3430. A close below this level would blunt the positive outlook and would warrant closure of long positions.
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