Visit http://indiaer.blogspot.com/ for complete details § Indian equity benchmark index reversed the losses of the previous couple of sessions by rallying smartly in yesterday’s session. It took support at 5965 (previous swing low) and moved higher above the 6100 mark. Momentum oscillator Stochastics has triggered a buy signal from oversold conditions, whereas other oscillators continue to point lower. Market breadth turned strongly in favor of the advances. Nifty stocks’ breadth was at a stunning 24:1. Nifty has to now move decisively above the 6127-6165 resistance band to rule out the bearish stance in the medium-term. If it is unable to do so, the lower high lower low sequence continues on the weekly chart reinforcing the downside risks. It is prudent to take a directional view on the index only on the break of important levels in either direction.
§ Yesterday’s rally was backed by FMCG, Banking and Oil & Gas counters. Underperformers were from IT, Auto and Power sectors. RIL has staged a strong move in yesterday’s session reinforcing our bullish stance on the stock for a target of 1120-1140. Bharti Airtel has taken support on weekly and monthly moving averages supporting the longer-term uptrend, thus offering good risk-reward opportunity on the long side. Bullish Setups: GAIL, IBREL, RIL, UNTP, BHARTI, CIPLA, UT. Bearish Setups: SESA, BJAUT.
§ Global equity indices have entered a zone of sideways trade as they consolidate below the early October highs. A decisive move above the highs is required to instill confidence among the bulls. Commodities like Gold, Silver and Crude Oil are witnessing heightened volatility with sharp moves in either direction on daily basis making it difficult for traders.
§ Interesting chart setups: RIL, BHARTI, CIPLA, SESA
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