There is no structural change in Nifty this week & the higher bottom formations are still maintained. Thursday’s closing 10013 thus becomes the points of reference for the short term bullish traders. However, there are some warning signals appearing from various breadth indicators, eg. BSE Small Cap Index is flashing an MACD Sell Signal after a negative divergence. The negative divergences are in fact prominent in several other oscillators as well. Divergences are not hard reversal signals but they are merely an advanced warning. Nevertheless, it’s time to use strict stop loss for any long position.
Metal stocks have been one of the favorites for the present bullish phase of the market. Tata Steel, in particular, was showing strength & on Friday, it closed at its 5-year highest price. The stock is looking poised for even higher prices & one could buy it on decline to 568 regions with stop loss at 557 & targeting for 590 levels.
This blue-chip banking behemoth had a very strong bull run previous Monday & since then it went into a retracement phase for the following three sessions. On Friday however, SBI made a new 5 day low followed by a significant upward rise which appears like resumption of primary uptrend. One could buy SBIN @ CMP 305 with stop loss at 297 & target 316.
This is an exceptionally strong & long term bullish scrip. We have recommended it several times earlier in this column & the primary uptrend does not look exhausted as yet. It closed at life high on Friday & one can buy TVS Motors on little retracement to 594 regions with stop loss at 585. 570 however have a rock solid support & hence a better stop loss for positional play from here. Long term target could be 623.
After a two-month consolidation, this two-wheeler Auto Stock gave a upside breakout only previous week & closed at it life high last Friday. There is a strong volume participation on this break-out as well. We recommend buying 50% on pull back to 3900 & remaining 50% at 3800 regions with stop loss at 3700 while playing for a target 4200 in intermediate term.
