Edelweiss Technical Reflection (ETR) March 1, 2011

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Edelweiss Technical Reflection (ETR)

§  The union budget failed to cheer the bulls on the street as Nifty ended a day of extreme volatility with moderate gains. The index broke above 5400 to test an intraday high of 5477 (i.e. a gain of 174 points), but went into a tailspin in the latter half to give up majority of the effort. A ‘doji’ candlestick pattern on the daily chart indicates indecision among market participants. Hourly MACD has managed to hold on to the bullish crossover, whereas daily oscillators continue to show mixed signals. Market breadth bounced back in favour of advances and the Nifty 50 stocks A/D ratio remained neutral at 1:1. Nifty has resisted near the 21-DEMA as well as the declining trend line from the January peak. It has also closed in the red for second consecutive month indicating downside risks in the coming month. Nifty needs to break below 5230 convincingly to improve the bearish structure for a test of 5000. Until then it is advisable to wait on the sidelines for further clarity on market direction.

§  Barring the Healthcare stocks, all other sectoral indices ended in the green. FMCG, PSU and Realty shares were the day’s biggest gainers, followed by Cap Goods and Banking stocks. BSE IT index is expected to underperform on a weak technical structure. Bullish Setups: IDFC, Suzlon (SUEL), Dr Reddys (DRRD), UniPhos (UNTP), Maruti (MSIL) Bearish Setups: Tata Power (TPWR), Ambuja Cements (ACEM), Mundra Port (MSEZ), Educomp (EDSL), TV-18 (TLEI)

§  Precious metals continue to trend higher in the medium term. DXY is approaching critical support of 76.60 from where a sustained pullback is expected. CBOE VIX has triggered a bullish breakout from a declining trend indicating a rise in volatility in the coming weeks that could shake up the bullish trends among global risk assets.