Technical View on Indices for 2013
Nifty :-
Year 2012 was the bullish year for all the indices globally were main indices gained by 7% to 29%. India outperformed the world’s most indices. Nifty has appreciated by about 27% in year 2012 in the hope of awaited policy reforms, which were finally announced by the government in the second half of 2012 . The recent measures to boost economy by government should continue in 2013 also, as suggested by the aggressive mood of government.
If we look at the weekly chart of the Nifty, it clearly indicates that the trend is up. The Index has been in an uptrend in a rising channel pattern since December 2011 forming a series of higher highs and lows after Oscillator RSI given positive divergence in weekly chart, which is a positive sign.
The weekly price chart shows that prices are witnessing strong support of the 20 week simple moving average place near 5650 level, whereas, lower line of rising channel is placed near 5400. The RSI indicator has given a positive crossover in quarterly chart and currently advancing indicating bullish momentum in the index. MACD is in urge of positive crossover in quarterly chart, which indicates the bullish bias in the index and possibility to make a new high.
Broadly we are expecting the Nifty to remain in a range of 5400 on the down side and 6350 on the higher side. And sustenance above 6350 level will open the door for 6800 level.
We have positive bias on the Nifty. Thus, our advice is to hold the long positions and add more on dips and book some profit near 6300 level. Investors should be confident to buy near 5400-5500 level without any hesitation in frontline stocks.
BankNifty :-
BankNifty index showing relatively out performance compared to other NSE/BSE leading indices in 2012. It gained by 57% in 2012 as against 27% appreciation in Nifty.
If we look at the weekly chart of the BankNifty, it clearly indicates that the trend is up. The Index has made Inverse Head & Double Shoulder pattern and forming a series of higher highs and lows after Oscillator RSI given positive divergence in weekly chart in December 2011, which is a positive sign.
The weekly price chart shows that prices are witnessing strong support of the 20 week simple moving average place near 11480 level. It also has support of rising trendline at 11000 level. The MACD has given positive crossover with its average in quarterly chart. RSI indicator is also advancing and making higher highs, which indicates the bullish bias in the index and possibility to make a new high.
Broadly we are expecting the BankNifty to remain in a range of 10200 on the down side and 13450 on the higher side. And sustenance above 13450 level will open the door for 16000 level.
PREFERRED STOCK IN BANKING SECTOR :- State Bank of India, Punjab National Bank, ICICI Bank, Allahabad Bank, Bank of India, Bank of Baroda, IDBI Bank, Federal Bank, Andhra Bank, Karur Vysya Bank, Corporation Bank & Indian Overseas Bank.
CNX Infra :-
CNX Infra index gained by 21% in 2012 as against 27% appreciation in Nifty. We saw good momentum in first quarter of 2012. But after taking the resistance of falling trendline, Index started moving in the sideways direction.
We saw the breakout of falling trendline resistance in September 2012 in weekly chart of the CNX Infra Index and after that it managed to move above that level, it clearly indicates that the trend is up. The Index is forming a series of higher lows in weekly chart since December 2011.
The weekly price chart shows that prices are witnessing strong support of the 20 week simple moving average place near 2500 level. It also has support of trendline at 2430 level. The MACD and RSI indicator are advancing and moving above their respective averages in monthly chart, which indicates the bullish bias in the index.
Broadly we are expecting the CNX Infra to remain in a range of 2400 on the down side and 2830 on the higher side. And big movement is expected only above 2850 level.
PREFERRED STOCK IN INFRA & REALTY SPACE :- Bharti Airtel, Idea, Crompton Greaves, Punj Llyod, JSW Energy, Tata Power, Reliance Infrastructure, DLF, Unitech and Suzlon (Black Horse)
CNX IT :-
CNX IT index under performed the major Indian indices in the year 2012. It gave negative returns (2%) in 2012 as against 27% appreciation in Nifty. We saw sideways movement of the index in the year 2012.
The index took the support of long term rising trendline twice in the second half of the year. And it also took the resistance of falling trendline in weekly chart.
The weekly price chart shows that prices in moving near the 20 week simple moving average which is placed at 6152 level. The MACD and RSI indicator are moving in sideways direction and moving below their respective averages in monthly chart, which is a negative signal for the index.
We are expecting the big movement in CNX IT in either side above 6500 or below 5700. In between this range we are neutral view on the Index
PREFERRED STOCK IN IT SECTOR :- Financial Technologies, OFSS, TCS and Tech Mahindra
CNX Midcap :-
CNX Midcap index outperformed the the Nifty in the year 2012. It gained by around 39% in 2012 as against 27% appreciation in Nifty.
If we look at the weekly chart of the CNX Midcap, it clearly indicates that the trend is up. The Index has broke the triangle pattern in upside and forming a series of higher highs and lows in weekly chart since January 2012, which is a positive sign.
The weekly price chart shows that prices are witnessing strong support of the 20 week simple moving average place near 7870 level. It also has support of trendline at 7800 level. The MACD has given positive crossover with its average in monthly chart. RSI indicator is also advancing and making higher highs, which indicates the bullishness in the Index.
Broadly we are expecting the CNX Midcap to remain in a range of 7800 on the down side and 9900 on the higher side, with a positive bias.
PREFERRED MIDCAP STOCK :- Aditya Birla Nuvo, Aventis Pharma, Biocon, Century Textile, Gillette India, Godrej Industries, IFCI Ltd, Jubiliant Life Science, LIC Housing Finance, Pantaloon Retail, Shriram Transport Finanace, Sun TV, Tata Chemicals, Tata Global Beverages, NCC and Thermax.
CNX Metal :-
CNX Metal relatively under performed the Nifty in the year 2012. It gained by around 17% in 2012 as against 27% appreciation in Nifty.
If we look at the weekly chart of the CNX Metal, it clearly indicates trend reversal. The Index has broke the falling trendline resistance in upside and sustained above that level. It is forming a series of higher lows in weekly chart since January 2012, which is a positive sign.
The weekly price chart shows that prices are witnessing strong support of the 20 week simple moving average place near 2725 level. The MACD has given positive crossover with its average and moved to positive zone in weekly chart. RSI indicator broke the trendline resistance and moving above its average in weekly chart, which indicates the bullishness in the Index.
Broadly we are expecting the CNX Metal to move towards north. We are expecting 3450/3600 level in the index. It has support of 2700/2500 on the down side.
PREFERRED MIDCAP STOCK :- Hindalco Ind.,SAIL, Sterlite Ind., Tata Steel and NALCO (Black Horse)
CNX Auto :-
CNX Auto index showing relatively out performance compared to other NSE/BSE leading indices in 2012. It gained by 41% in 2012 as against 27% appreciation in Nifty.
If we look at the weekly chart of the CNX Auto, it clearly indicates that the trend is up. The Index has broke the wedge pattern in upside and sustained above that level. It is forming a series of higher highs and lows in weekly chart since December 2011, which is a positive sign.
The weekly price chart shows that prices are witnessing strong support of the 20 week simple moving average place near 4370 level. The MACD has given positive crossover with its average and moved to positive zone in quarterly chart. RSI indicator is taking support of rising trendline and making higher highs and lows in weekly chart, which indicates the bullishness in the Index.
There are some clouds in the north at 4830 level, which is 100% extension level of previous up rally. We are expecting the CNX Auto to continue its ride towards north one it closed above 4850 level. Sustenance above 4850 level will take the Index to 5280 level. And sustenance below 4550 will drag the Index back to 4300/4100 level.
PREFERRED STOCK IN AUTO SPACE :- Apollo Tyres, Bosch, Escorts India, Maruti Suzuki India, Ashok Leyland and Tata Motors.
INVESTMENT IDEAS FOR FOR 2013
Reliance Capital :-
Stock is moving in down trend since January 2008, It fell from 2920 to 227 level. But after touching 227 level in January 2012, it made higher lows. It broke the previous high in weekly chart, which is reversal signal as per Dow theory.
We saw “Ascending Triangle Pattern” breakout in the stock in weekly chart with healthy volumes, which is bullish chart pattern.
On the oscillator front, RSI is moving well above its average in weekly chart, which indicates price reversal on cards.
MACD is also moving in upward direction in positive zone, which supports the buy call on the stock.
Looking at all these indicators and patterns, I expect the reversal on cards for medium to long term. Thus, I advice all our clients to accumulate the stock at current level and dips to 450 level for the target price of 555/580 with the stoploss of 440 on closing basis.
JSW Energy :-
The stock was moving in downtrend from September 2010 on the weekly chart. But Script is forming a series of higher highs and lows after making bullish pattern at the low since December 2011.
We saw the breakout of series of falling trendline resistance in the last quarter of 2012 in weekly chart and after that it managed to move above that level, it clearly indicates the trend reversal.
On the oscillator front, RSI indicator are advancing and moving well above its average. It is taking support of rising trendline in weekly chart.
The MACD has given positive crossover with its average in quarterly chart. And moving well in positive zone in weekly, Monthly & quarterly chart.
Looking at all these indicators and patterns, I expect the reversal on cards in long term. Thus, I advice all our clients to Buy the stock at current level and dips to 61 level for the target price of 87/100 with the stoploss of 58 on closing basis.
Bank of India :-
After testing an all time high of 589, the stock has been trading in downtrend since October 2010. However, the stock has made “Harami Candlestick Pattern” in weekly chart and Moved up.
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It gave an upside breakout from “Wedge Pattern” and sustained above that level in weekly chart, which is indicating bullish signal.
On the oscillator front, RSI broke resistance of falling trendline in upward direction and moving well above its average in weekly chart, which indicates reversal on cards.
We also saw crossover of MACD with its average, which indicates that the stock is likely to continue its uptrend move in the long term.
Looking at all these indicators and patterns, I expect the reversal on cards for long term. Thus, I advice all our clients to accumulate the stock at current level and dips to 325 level for the target price of 408/440 with the stoploss of 320 on closing basis.
Punjab National Bank :-
After testing the all time high of 1399.90, the stock has been trading in downtrend since November 2010. However, the stock moved up after RSI gave positive divergence in weekly chart.
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It gave the breakout from “Inverted Head & Shoulder Pattern” and sustained above that level in weekly chart. Later it broke the falling trendline resistance. It also moved above previous high, which is bullish signal as per Dow Theory.
On the oscillator front, RSI broke resistance of falling trendline in upward direction and moving well above its average in weekly chart, which indicates reversal on cards.
We also saw crossover of MACD with its average and moving in positive zone, which supports the buy call on the stock.
Looking at all these indicators and patterns, I expect the reversal on cards for long term. Thus, I advice all our clients to accumulate the stock at current level and dips to 825 level for the target price of 1080/1205 with the stoploss of 790 on closing basis.
Adiyta Birla Nuvo :-
After the fall from Rs. 2500 to 335, the stock made “Inverted Hammer Pattern” at the bottom in Weekly chart and
moved up. The share price went into a consolidation mode after moving up. The stock spent the last three years six
months consolidating between the broad range of Rs 700 to Rs 1040 levels. On November 2012, it broke the range and closed first time above Rs 1040 after September 2008.
We saw “Rectangle Pattern” breakout in the stock inweekly chart, which is bullish chart pattern.
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On the oscillator front, RSI is moving well above its average in weekly chart and first time it moved above 70 level after June 2009, which indicates price to move towards north.
MACD is also moving in upward direction in positive zone and broke its trendline resistance, which supports the buy call on the stock.
Looking at all these indicators and patterns, I expect the reversal on cards for long term. Thus, I advice all our clients to accumulate the stock at current level and dips to 825 level for the target price of 1080/1205 with the stoploss of 790 on closing basis.
Pantaloon Retail :-
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After the fall from 525 to 126, the stock made “Doji Pattern” at the bottom in the weekly chart and moved up. The share price went into a consolidation mode after moving up. The stock spent the last one year consolidating between the broad range of Rs 125 to Rs 227 levels. Last week it broke the range and closed above that range.
We saw Range breakout in the stock in weekly chart with heavy volumes, which is bullish signal for the stock. After the sharp move we saw correction in the stock. Yesterday it took support of the trendline and moved up.
Volumes increased sharply during the whole base formation which suggests accumulation in the stock by strong hands.
On the oscillator front, RSI is moving well above its average and making higher lows in weekly chart, which indicates price to move towards north. MACD is also moving in upward direction in positive zone, which supports the buy call on the stock.
We recommend to buy this stock at 234.75 level, we are advising to add more at current level for the revised target price of Rs 310/345 with stoploss of Rs 220 on closing basis.
Hindalco Industries :-
After testing the all time high of 252.85, the stock has been trading in downtrend since January 2011. However, the stock moved up after RSI gave positive divergence in weekly chart.
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It made the “Hammer & Morning Star Candlestick Pattern” in bottom and moved up. It gave the breakout from “Inverted Head & Shoulder Pattern” and sustained above that level in weekly chart. Later it broke the “Wedge Pattern”, which is bullish signal for the stock.
The MACD has given positive crossover with its average in monthly chart. RSI indicator is also advancing moving above its average, which indicates the price reversal on cards .
Looking at all these indicators and patterns, I expect the reversal on cards for long term. Thus, I advice all our clients to buy the stock at current level and dips to 120 level for the target price of 164/182 with the stoploss of 115 on closing basis.
Steel Authority of India Limited :-
Stock has been trading in downtrend since April 2010. However, the bear run stopped after it made “Inside Candle”in December 2011 in weekly chart. And after that it is forming a series of higher lows.
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It made the “Hammer & Morning Star Candlestick Pattern” in bottom and moved up. It gave the breakout from “Inverted Head & Shoulder Pattern” in daily chart. Later we saw breakout of “Symmetrical Triangle Pattern” in weekly chart, which is bullish signal for the stock.
On the oscillator front, RSI broke resistance of falling trendline in upward direction and moving well above its average in weekly chart, which indicates reversal on cards.
We also saw crossover of MACD with its average and moving in positive zone, which supports the buy call on the stock.
Looking at all these indicators and patterns, I expect the reversal on cards for long term. Thus, I advice all our clients to buy the stock at current level and dips to 83 level for the target price of 123/143 with the stoploss of 76 on closing basis.
NCC Limited :-
After the price fell from Rs 198 to Rs 28.10, the stock made “Bullish Engulfing Pattern” at the bottom in the weekly chart and moved up. We also saw positive divergence of RSI in weekly chart at bottom. Stock spent the last 8 months consolidating between the broad range of Rs 28 to Rs 67. We saw good volumes during consolidation stage.
We saw triangle breakout in weekly chart with healthy volumes, which is bullish signal for the stock.
On the oscillator front, RSI is moving well above its average and in urge to break the trendline resistance in weekly chart.
We also saw positive crossover of MACD with its average in positive zone in weekly chart.
Looking at all these indicators and patterns, I expect the price reversal in the stock for the target of Rs. 123/191 in long run, which is the 61.80% and 100% projection level of previous bull run. We gave the Buy call on the stock at Rs 51.65, we advice to add more at current level with the stoploss of Rs 40 on closing basis.
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