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Sunday, 17 March 2013

NTPC Outlook – Will it move up ?

Dear Readers

Giving a brief technical analysis and outlook for NTPC based on request from reader.

NTPC has been on down trend for past several weeks and it touched a fresh 3 months low on 15 March.
As per charts, NTPC is likely to move further down to its support levels of 143, followed by 141, 139 which could be a potential bottom in this wave. Resistances are placed at 148 followed by 151.Detailed analysis below.

When you take a positional call , it is important to do the analysis on two time frames, this is called dual time frame analysis. This will yield higher probability of success since stocks tend to respect the higher time frame trend than the lower time frame. Ideal trades occur when the lower time frame is in sync with the higher time frame. This applies to intraday trades as well.

Weekly Chart Observations:

1. Moving averages show highly negative trend. 15 and 20 week moving averages are below 50 and 200 week moving averages. The stocks attempt to close above these averages were not successful in the last 3 months.
2. MACD negative and there is still little more room to the downside.
3. 14 week RSI negative and not yet in the oversold region indicating a move to downward support levels.
4. Stochastics in the oversold region, but no signs of bounce back yet.

Daily Chart Observations:

1. Moving averages indicate negative trend. Stock is below the 20 day moving average.
2. MACD has given a negative cross over post failure to close above the MAs
3. 14 day RSI is indicating a bounce back, but the influence looks weak.
4. Stochastics is close to entering oversold. But no signs of bounce back. Fast stochastics indicate some more downmove.



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