03 December 2010

Edelweiss Technical Reflection (ETR), 3/12/2010

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Edelweiss Technical Reflection (ETR)
§  Nifty opened with a huge gap up on strong overnight global cues and tested the 20-DMA at 6030. For the remainder of the day, the index consolidated in a narrow range. It has closed above the 6000 mark which is strong psychological boost for the bulls. Hourly momentum oscillators are comfortably in buy mode. Trading volumes continue t be consistently at average levels. Market breadth continues to be in favor of advances. Nifty 50 stocks A/D ratio was robust at 2:1. Nifty is likely to trade with a positive bias in the immediate short-term, with an initial target of 6090 (61.8% retracement), and on a weekly close above 6000, the short-term and medium term trend will turn higher. In the interim, 6035-6060 will act as intraday resistances. Key support for the market is pegged at 5915, which will prevent any drastic downswings.

§  Major sectoral indices witnessed a positive trend yesterday. Metals, Realty and IT shares outperformed the market; whereas Cap Goods and Auto shares witnessed a negative trend. Bullish Setups: BHARTI, CIPLA, GAIL, SAIL, NDEN, PWGR, INFO Bearish Setups: RELI, ACC, BHEL

§  US and European equity indices are trading positively on strong momentum with further upsides in the near term. DJIA has a target of 11,500 from where strong supply is expected. We maintain our bullish bias on Crude Oil for a re-test of $88, and possibly a break above $90 in the coming weeks.

§  Interesting chart setupsBHARTI, GAIL, CIPLA, ACC, RELI

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