Entering For Short Term Correction - Buy On Decline - More Surprise To Come

Market view for the week 23 to 27th September 2013 

SECTOR REVIEW:

Nifty in past 6 days was trading and consolidating above 200 DMA, and opened with big gap of 200 points, Many were surprised by the move and ferocity of the move but readers of MY EMAIL SERVICE would have enjoyed the rally, We have discussed September is Bullish month for Indian markets and OCTOBER should give high volatility with sudden decline.

A smart come back observed with a rise of 20% in PSU bank and banking sector, while Finance and public sector enterprise showed 18% and 14.45% rise. This is a key sector in which we must consider buy on decline stocks from this sector. 

On the other hand IT is topping out and observed some bar reversal pattern in weekly and monthly time frame.

NIFTY: A smart run from 5118 NIFTY spot to 6142 observed without any correction in weekly time frame. It is likely to observed in next week and probably next weeks close may be lower then 6012 lvl. As daily oscillator turned down and moving away from overbought area (while weekly continues to be marching upward) indicates a minor decline of 38% of the last rise expected. Also during last 4 week we observed up move so minor sub wave and feeling of gap area between 5738 and 5688 not yet seen so it may try in next week or there after. Most probably I don’t see anything below 5751 in coming few weeks time.

On the higher side door for 6250 to 6430 is open. But profit booking will come around new NIFTY area. Provided the correction which I am expecting in the coming week should materialize. Next week’s close should be below last close of 6012 then a major uptrend will unfold after this anticipated decline and NIFTY will move in 6750 to even higher range.

Stock specific action will continue and more upside to observe. 

INVESTMENT IDEA: JM FINANCIAL: RS 23.95

Technically stock is now entered in up trend buy surpassing its short term EMA on monthly time frame. The stock has already started its up trend by making higher bottom and higher top since last December 2012 First bottom was established at 10.91 followed by 15.34 higher bottom and another higher bottom at 17.85. 

> Short term oscillator is turned up from oversold area and now rendering buy signal also. 

> During last week we have observed very good volume on weekly basis and is now rising.

> The spread oscillator is also turned positive and trading above zero lvl indicates more upside to come. 

> Stock has minor resistance at Rs 27 and once clear this resistance it will move in the range of 34 to 35. Its a best buy for the short term as well as medium term investment.