Market Outlook 24 May 2010 and Calls


Nifty (4931.15) - “Hammer”

Nifty has formed “Hammer” a bullish reversal pattern on daily chart which suggests up move from here on is likely but one thing to keep in mind that real strength for bull is possible only above 5180 levels on closing basis, where multiple tops are there. As per weekly chart Nifty is trading below 10 month old upward sloping trend line support and which is placed at 5015 levels. Daily momentum indicators are hovering in over sold region especially stochastic which is extremely over sold and which negates any further downfall before any bullish reversal. Coming week important support placed in the range of 4895-4842 levels and resistance placed in the range of 4952-5015 levels.

Biocon (284.60) - “Bullish Engulf”

Stock was in downtrend after completing “Evening Star “a bearish candlestick pattern on 3 May 2010. On Friday stock has formed “Bullish Engulf” a bullish candlestick pattern with strong volume breakout on daily chart.  Daily momentum indicators have given bullish crossover to signal line. Short term moving averages also showing upward movement. Looking at all above technical parameters traders with moderate risk appetite can consider buy above Rs.286 with tight Stop loss of Rs.281 (closing basis) for a Target of Rs.299.

Tata Power (1259.55) – “Highwave Pattern”

Stock was facing multiple resistance in the range of 1390-1408 levels from Mid March 2010 to late April 2010 but unable to sustain and started showing swing lower lows. On Friday stock has formed “High Wave” pattern with long upper shadows which imbibes there is supply at higher levels and closed below its previous swing low. Weekly chart also showing weakness and Weekly RSI entered in negative territory. Looking at all above technical evidence traders with moderate risk appetite can consider Sell below Rs.1253 with tight stop loss of Rs.1275 for a Target of Rs.1195. 

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