THURSDAY, FEBRUARY 12, 2009
WAIT FOR RIGHT TRADES
Sensex low 9445 yet again close to the point it broke out from. The range bound move continues. As there has been no follow up on the breakout it seems index is indecisive to continue ahead. many index stocks are giving breakouts but no follow up moves is an indication of indecision so better to be cautious till we dont see large price and volume action confirmation.
In the short term we had seen some bottoms around 9020 mark so for the trend to change completely it would be the important level. On upside major resistance on the trendline is 9900-10100.
Dow Jones :
While writing the index has made a low around 7725 closer to 7750. Closing below for a couple of days would endanger the recent lows. Long term support is around 6900-7100 which was the low zone made in 1997 and 2002.
Stocks to watchout for :
With the ranged moves on the index it has become difficult to find good trades on stocks also as no follow up moves and trend. Sometimes its better to wait for the right setups then to make small losses just for the need of trading.
Investors can continue to wait with cash for the next couple of months and take a fresh view on deep declines as time-wise pain and correction still left. ( 13-14 mths )
Colgate has finally given a breakout move after consolidating around the 415 zone. Can be bought on dips to 420 for 5-10 % upside as defensive sectors do see upmoves in such conditions. ( hero honda on life high )
Infosys
The stock is losing momentum on upside. Sustaining below 1235 could tgt 1190-1140. Short on rise to 1275-1290 stop of 1320.
Bharti Airtel
Support around 635-638 if stays below could test 618-607 in near term. Only a move beyond 690 would be positive.
Larsen and Toubro
The stock has made a range of 630-705 in near term. As per mkt conditions traders can take positions on either side. Short around 697 stop 705 reverse buy if crosses for 735.
