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The Nifty yesterday went below our support of 6150 and ended the day quite close to our support line of 6060. There was no newsletter yesterday otherwise the next supports of 6050 and 5980 (marked as trendline B) would have been given. The market, however, has its own mind and it quite convincingly broke through both the supports in the first 30 minutes itself. But it did find support at the next support line (marked as trendline C) at 5830 and reversed from there. The next support zone below 5830 is between 5700 and 5750. Below 5700, we could be in an intermediate downtrend, which would mean a much deeper correction. For tomorrow, the first support and first resistance levels are 5830 and 5970 respectively. A move above 5970 will bring us back to the same resistance levels of 6060 and 6130.
Aban Lloyd, on this daily chart, may have found support in this trading range between 4500 and 5400 and may go back to the top end of the range before long. RSI above 40 even after so much decline is a confidence booster. Aban did go down to a low of 4550 but soon recovered to close at 4790. One can consider buying near 4800 with a stop loss of 4500 and a target between 5250 and 5400 is possible.
On the daily charts, BEML (Bharat Earth Movers) may just have found support at this line. Not completely a risk free trade but the risk to reward ratio is quite low in this. One may consider buying it at around 1600 with a stop below 1550 and a target of 1800 seems achievable. Avoid buying/placing stop in the first half hour of the day. Let the initial euphoria/panic of the market die down.
Bharat Heavy Electricals Ltd. (BHEL) was consolidating in a bearish triangle on its daily chart. This triangle seems to have been broken today. Not only that, a five month old trendline was also broken in the last week, which also suggested weakness. A breakdown from this triangle gives a target of 1900. In a bull market, downside targets may be difficult to achieve but BHEL surely is in a downtrend now. Close long positions. Stay away.
Larsen and Toubro has been inside a trading range (4000-4600) for quite some time now and inside a smaller trading range (4000-4400) for almost 2 months. With a stop loss below 3920, one can consider buying it near the current market price of 3980 for targets of 4400 and 4600.
Happy investing!!!
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