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Monday, 18 March 2013

Nifty Outlook and Stocks to trade on 18 Mar

Dear Readers

This week is again a week of news flow with the RBI Monetary policy on 19 and FOMC meeting on interest rates on 19 and 20. Taking swing or positional trades this week is not recommended due to the expected volatility due to these news flows.

Nifty View for week starting 18 March

I have been writing about the resistance levels 5950 and 5975 in my few posts before. Last week the index was close to the resistance of 5975 and made a low close to 5800. On Friday, Nifty faced resistance at 5950 levels and also broke the critical level of 5880 and closed below that , this is a sign of concern.

Going forward, 5950 will be a critical resistance followed by 5975. Above 6000, the mood will be bullish. On the other hand, a break of 5860 will result in a slide to 5845 and 5800. Crossing below 5800 and sustaining is a big negative to the immediate trend.

The financial irregularities news in the banking sector impacted ICICI, Axis Bank and HDFC Bank, while SBI is holding on to its gains. Developments regarding this news event could affect overall market since many will take this as a reflection of corporate governance in India.

Dow Jones hit new highs during the last week though on Friday Dow showed some weakness. Indian markets will be mostly on wait and watch with negative bias on Monday. Tuesday it will react to news and will be very volatile – avoid trading during the day. Wednesday’s movement will decide the trend unless news flow from US impacts the markets.

Stocks to trade on 18 March

1. ICICI Bank – ICICI bank closed below the 15 day moving average on Friday with increase in volume. We had a successful short as well on Friday. I expect the downward move to continue. Below 1080 the stock is negative. With this as SL shorts may be entered for target of 1060. Below 1055, there is another opportunity to short for a target of 1045 followed by 1033. Keep SL as 1070 in such a case.
2. L&T – Sell below 1500 for a target of 1480 with SL at 1515.
3. Tata Motors – Tata Motors had a good fall on Friday with volumes and the stock closed below 100 day EMA. RSI and MACD is giving sell indications in daily charts. Sell only if the stock sustains below 290 with SL at 294.50.
4. Bajaj Auto – Bajaj Auto was falling on high volumes for the past 5 days and has seen bearish MACD AND EMA crossovers. The stock is likely to fall till the 200 EMA support at 1815. Sell below 1840 with SL at 1862.
Please do not trade blindly on these levels. A buy position should be supported by charts giving positive signals. A sell position should be supported by charts giving negative signals. Please see real trades in earlier posts to understand how an intraday long or short is created.

Real Trades Update

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Any significant news which affects individual stocks or  overall market direction will invalidate the technical analysis behind the above views. In such a situation use real time charts to trade.

All the views and contents mentioned in this blog are the personal observations of the author and is in no way a recommendation for the readers to enter into trades of stocks/futures. The author do not accept any liability/loss resulting from the use of any content from this blog. Any act of trading performed by readers should be at their own discretion and neither the author or the sources mentioned in the blog will be responsible for the outcome.

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