Short Term Time Frame Vulnerable: 5450 to watch.

NIFTY: 5417: In the last eight week NIfty traded surprisingly in a NRB range between 100 pints to 130 points.


On first day of the week NIFTY traded weak with red candle and closed weak. This is interesting to note that in last 8 week NIFTY consistently seeking support at 5350 levels. Now will it break? is the million $ question to answer. Nifty required to close above 5513 to regain its bulls strength till such time rally may be observed but of no use. On the other hand violation of 5450 will be a danger signal for the bulls who are holding long position in a weak stock they may be battered more for a new low.

NIFTY NSE CASH WITH OHLC AND ADX, EMA, D CHANNEL

Now look at various stocks which are showing clear weakness and progressing in a weekly downward trend. Almost 50 companies are trading below their weekly EMA and not only that its direction is also turned down. In other words the trend is down in the following stock and any kind of rally observed can not be sustained unless it trades above the EMA lvl at least for a couple of days.

Aban, ABB, ABGSHIP, BEL, BRFL, CHENNPETRO, CIPLA, GOLPAL, CONCOR, COREPROJECT, DR REDDY, EDUCOM, EKC, ESSAR OIL, FSL, GLAXO, GTL, GTOFFSHORE, HCC, HEXAWARE, ICSA. INFOSYS, IVRCLINFRA, JPPOWER, M&M, MARUTI, MTNL, NAG CONSTR, NAT ALUM OFSS, PATEL ENG, POLARIS, PUNJLLOYD, RCOM, RELIANCE, RELINFRA, RELMEDIA, RNRL, ROLTA, RPOWER, SAIL, SESAGOA, STER, SUZLON, TATA POWER, TATA STEEL, TECHM, VOLATS, WIPRO, ZEEL.

On the other hand around 12 stocks are rendering buy signal and closed above their respective weekly EMA looks good to buy and hold.

ABIRLAUNO, ASHOKLEY, BHART AIRTEL, DIVIS, GTLINFRA, JINDALSWHL, JISLJALEQS, LUPOIN, MPHASIS, NTPC, SIEMENS, TATA GLOBAL.

The stock which i like to trade long are APIL, JINDALSTEL, OFSS, POWERGRID, NTPC, (This stock are coming out from their oversold area and rendering short term buy signal).

NTPC: Rs 198.65. Look at the following DHLC chart of NTPC. It was in a downward trend from 238 high. After March 2010 it started taking support around Rs 194. During last 6 month stock was getting strong buying support around Rs 190-194 area. During this time stock made an important swing high at Rs 212 followed by lower top 206.

NTPC Daily OHLC Bar with ADX, EMA and SWIG.

Why i like this stock is due to following reason:

Firstly ADX line which surpassed its bearish zone in the oversold area only is a +ve factor.
Secondly stock moved up on last trading day with remarkably high volume indicates a fresh entry of bulls.
Thirdly price close above its EMA level and today if sustained above 196 then EMA color will change from RED to GREEN will be a confirmation to short term up trend.
Forth argument is that stock managed to surpass its last week high 197.75 with ease and close above that indicating it has tried to come out from the bearish grip.
How much gain possible. Looking at the size of accumulation since MARCH to till date immediate TGT or resistance would be Rs 206. Upon surpassing the same using Fibonacci ratio i come to the conclusion that it can move to 214 to 219 area. I consider this as a potential safe buy with a risk level of Rs 4 and gain of Rs 16 so it is not a bed trade where R/R ratio is 1:4.

Friends and followers this is what i feel as per the pure technical chart.