Weekly Market Commentary, 10th FEB 2014

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Information about Weekly Market Commentary, 10th FEB 2014
Finance

Published on February 10, 2014

Author: MarwahFinancial

Source: slideshare.net

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Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

Weekly Commentary 2/10/2014 Technical View of Indices Nifty Our Nifty trading strategies were very profitable last week as Nifty fell all the way down from 6100 levels to 5930 before bouncing back to close at 6063 level at the end of the week. In This Issue  We will be covering technical view of Nifty and BankNifty for the coming week as well as give trading strategies for Charts are still showing weakness and our recommendation is not these indices to come out on to go long in index till Nifty clearly breaks 6100 levels and closes the top and minimize losses. above 6125 level on any day in coming week. We will also be giving some Let us evaluate Nifty’s daily chart in detail to check out important levels and formulate trading strategy: stock recommendations on the basis of technical analysis. As can be seen from the daily chart, Nifty is still trading in a range and now important levels have become 6108 and 5930. RSI is still in oversold zone but in the daily chart, Nifty has formed a hanging man. This usually suggests weakness unless Nifty breaks 6100 levels convincingly on either Monday or Tuesday. Keeping this in mind, our trading strategy for the coming week will be:

a) We will recommend going short in Nifty rather than going long. One can easily buy puts on any rise in 6075-6110 level with stop loss of 6140 with TG1 of 5980-5985 and TG2 of 5930 b) If Nifty breaches 6025 level, add more shorts with TG1 5900, TG2 5850 with stop loss of 6055. c) Go long at 5820 if Nifty falls to that level with stop loss of 5780. Any closing above 6125 is also an opportunity to go long with TG1 6145, TG2 6185 and stop loss 6000. Always remember to keep stop losses while trading in order to minimize losses and always book profits at suggested levels or keep trailing stop losses to maximize returns. Bank Nifty BankNifty traded within the range of 9970 to 10300 last week and is still showing weakness even though RSI indicator is in oversold region. Let us evaluate its chart for our trading strategy: a) We will avoid going long in banks for now as BankNifty is still seeing weakness. As per our expectations, we saw minor bounce back once it fell to 10000 level. One can short bank nifty on any rise near 10450 levels with strong stop loss of 10520. b) Longs can enter at 10000-10050 levels with TG1 10200, TG2 10400 and stop loss as 9950. c) 9600 acts as very good support level. Go long on any fall to this level.

Stock Picks Very important: Remember to trade with no more than 2 lots at one time. Whenever you buy or sell a stock, remember to place a stop loss immediately. This ensures mental preparedness. Also, our research and recommended levels ensure that you get good risk to reward ratios. Therefore, please ensure that you do not enter the stock if it is not in our suggested price range. Secondly, always make sure that you book some profits at different target levels and start placing trailing stop losses as per your comfort levels. Last Week’s Picks Both our picks of ADANIENT and HINDALCO didn’t perform as per expectations and stop losses were hit in both. Please see this is the reason why we always advise to trade with the stop loss levels we give so that you exit immediately if trade doesn’t go according to trend and minimize your losses. We do a very thorough research to ensure that our picks give you a minimum risk reward ratio of 1:3. This Week’s Picks 1. Our first pick for the week is DLF. Stock is looking weak and has strong resistance at 140. Besides its current price gives us a very good risk/reward ratio. Current Market Price: 137.95 Recommended Action: Go Short in 139-139.40 range Stop Loss Price: 141.5 Target 1: 134 Target 2: 130 Target 3: 126 Timeframe: 2-3 days 2. Our second pick is IDEA Cellular Ltd. Short it at 139-140 levels with stop loss at 141.5 TG1 136, TG2 134.5, TG3 132 Timeframe: 1-2 days Disclaimer: This document has been prepared by technical analysis team of Marwah Financial®. This document is prepared for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make such investigations as it deems necessary to arrive at an independentevaluation of an investment in the securities of companies referred to in this document including the merits and risks involved. The investments discussed or views expressed may not be suitable for all investors.

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