Market Outlook 26 May 2010 and Calls

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Nifty (4806.75) - Long Black Candle


In yesterday’s edition we have mentioned that Nifty has wide trading range of 4842-5029 and either side breakout/breakdown will provide continuation of trend and yesterday itself Nifty has broken important support of Hammer low of 4842 and opened door for 4750 levels; and now strong support shifted to 4675 levels. On candlestick front Yesterday’s candle was a “Long Black Candle” which favor more bearish out come in coming days although important point to note here is that current situation is reacting to global cues rather than technical factor alone.   

Sun Pharma (1587.40) - Bullish Engulf


Yesterday stock has formed “Bullish Engulf” a bullish reversal pattern with rising volume on daily chart. 3 days EMA has given positive crossover to 8 days EMA moreover daily momentum indicators have given bullish crossover to signal and is on the verge of positive territory. Looking at all above technical parameters traders with moderate risk appetite can consider Buy above Rs.1590 with tight stop loss of Rs.1569 (closing basis) for a Target of Rs.1645.

Divis Lab (697.20) - Bearish Engulf


Yesterday stock has formed “Bearish Engulf” a bearish candlestick pattern moreover stock has formed “Symmetrical Triangle” pattern and down side breakout occurred at 705 levels; closing is well below of this level. Daily RSI has also given negative crossover to signal line, rest other momentum indicators are showing uncertainty at this level. Looking at all above technical parameters traders with moderate risk appetite can consider Sell below Rs.693.50 with tight stop loss of Rs.705 (closing basis) for a Target of Rs.670-Rs.663.




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