10 November 2010

Edelweiss Technical Reflection (ETR): Nov 10th, 2010

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Edelweiss Technical Reflection (ETR)
§  Nifty traded in a choppy range in the first half of yesterday’s session, dipped to the hourly moving average support of 6245 and rallied from thereon to close above the 6300 mark for the day. The second half rally suggests that the corrective action is complete and the short-term uptrend has resumed. Nifty has also managed to break above the intraday downward sloping channel indicating a reversal. Hourly oscillators are mixed, but the daily oscillators indicate an uptrend. Market wide breadth was improved in the second half to tilt in favor of advances. Nifty stocks’ breadth was strong at 2:1. Nifty has retraced 23.6% of the rise from 5937 to 6338 and resumed the previous week’s rally. This will be confirmed on break above 6338, and subsequently the index is expected to break above the highs and target 6500-6600 levels.
    
§  The late surge was on the back of buying interest in FMCG, Realty and Telecom shares. Oil & Gas and Banking shares were among the underperformers in yesterday’s trade. We reiterate our positive bias on Cement and Sugar stocks for further 10-12% gains. Realty shares are have signaled a bullish reversal from recent correction and a sectoral up move is on the cards. Momentum oscillators have rolled bullish on DLF, IBREAL and UT. Bullish Setups: DLF, TATA, RIL, CHMB, HNDL, ICEM. Bearish Setups: HPCL, MSIL

§  European indices are back in trend after a brief pause, bouncing of short-term moving averages. The German DAX index is expected to rally into the year end for a target of 7185. The FTSE has headroom towards 6050. In the US markets SOX has begun the year-end rally that is headed for the 1300 mark. Gold rally is on a strong footing. The revised target for Gold is at $1460. AUD-USD is trading above parity (1.0) for the second week indicating further up move, thus positive for commodity asset prices.

§  Interesting chart setupsTATA, LT, ITC, ICEM, HPCL




Sales Traders Commentary
§  On Tuesday, key benchmark indices made decent gains ahead of firm global clues. On the sector front while consumer durables, realty, FMCG and IT stocks rose, capital goods stocks fell.  But, index heavyweight Reliance Industries edged lower in volatile trade. The market breadth was strong.
§  While the Sensex ended up 0.46%, the Nifty closed up 0.45%.
§  Gainers were Hindustan Unilever (3.37%), H D F C Bank (2.33%), Tata Consultancy Services (2.19%), Bharti Airtel (1.87%), Sterlite Industries (India) (1.72%), and Infosys Technologies (1.31%).
§  Losers were State Bank of India (3.90%), Housing Development Finance Corporation (0.64%), Maruti Suzuki India (0.57%), Reliance Industries (0.42%), Reliance Energy (0.40%), and Tata Power Company (0.33%).
§  The FMCG index was up 1.69%. Major gainers were Nestle India (11.28%), Colgate-Palmolive (India) (3.68%), Hindustan Unilever (3.37%), I T C (0.4%), and Mcleod Russel India (0.3%).
§  The IT index was up 1.38%. Major gainers were Infosys Technologies (1.31%), Tech Mahindra (0.91%), Oracle Financial Services Software (0.44%), Rolta India (0.4%), and H C L Technologies (0.06%).
§  The Telecom index was up 1.35%. Major gainers were Bharti Airtel (1.87%) and Idea Cellular (1.82%).
§  The Realty space was up marginally. Major gainers were DLF (1.31%), HDIL, Indiabulls Real Estate and Unitech rose by between 0.61% and 6.97%.
§  Globally, Asian markets ended mixed while European markets were trading in the green.


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