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§ Nifty opened on the New Year with a gap up, but was unable to build on to the gains. Infact during the session it witnessed bouts of selling and attempts to fill the gap. For the day it has managed to close above 6150, and continues to make a higher top higher bottom formation. Daily oscillators are showing bullish readings, while the hourly oscillator (MACD) has rolled bearish indicating a sideways to corrective price action. Market breadth was similar to previous session’s readings in favour of advancing stocks. Nifty 50 stocks A/D ratio continued to be robust at 2:1. The index seems to be rallying in a third wave of a minor degree, as well as on the breakout of the double bottom reversal of 5700. It is trading above all key moving averages and with a crossover of the 21 and 50 DEMAs signaling a medium term buy signal. We maintain a target of 6300 and 6450 (double bottom objective). Incase of declines to 6100 (hourly MA support), one can look to initiate longs.
§ Metal shares continue to lead the market in the recent advance with gains of ~2%. This was followed well by Consumer Durables and Banking shares. Mild correction was seen in Autos, IT and Oil & Gas shares. IT sector has reached an overbought zone in the short-term and hence is vulnerable to a corrective / sideways trade. Realty shares are moving up on strong short-term momentum; BSE Realty Index can retrace the fall upto 3060. Bullish Setups: PLNG, ABAN, SESA, BHARTI, HDFC, HNDL, UT, TATA Bearish Setups: BJAUT, TTMT. DRRD, TTSL
§ European and US equities started off the year with a smart gain of ~1.5% with a strong upmove in the previous quarter. We reiterate our target on SPX of 1310. Crude Oil is in a steady uptrend, making higher tops and higher bottoms. Sugar bounced back with a strong 5% upmove. We reiterate our target of 37.50c on Nybot White sugar. Euro has taken support of the bullish trend line and is set to test 1.34 (50 DMA & 38.2% retracement of the previous decline).
§ Interesting chart setups: TATA, ABAN, LT, PLNG
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