Nifty Remains Range Bound

Today was a very boring day for Nifty traders. The Nifty opened at 5200 and soon shot up to 5250. Thereafter, it was just 30 points up and 30 points down from there. In the last 30 minutes, it went up to 5280 but then lost all its gains and finally ended the day at 5249. As seen on this 30 minutes chart, the Nifty now is at a very crucial resistance line at 5280-5290. Once it goes above 5300, we should be looking at a target of somewhere near 5900. That will, surely, bring us back into an intermediate/medium term uptrend.


Jindal Stainless is showing some support near 145 and is now near its short term resistance line. On a breach of this resistance at 161, it is showing a target of between 188 and 189, on its daily charts. This is a short term trade and we should be able to achieve this target in 15-20 days. The reader can keep a stop of 145 as long as she is in the trade. Of course, after such a major breakdown, it could go well above its target and it may, I repeat, may make sense to continue holding on to it. But once a trader/investor enters a trade, she should always have an exit strategy in mind. The exit strategy should always be that the trade is to be closed, no matter what, when the target level or the stop loss level is hit. But if a stock is still looking strong near its target, then one should modify the exit strategy a little bit. Modifying a strategy DOES NOT mean changing the target price altogether. You can modify it in such a way that you close only 50% of your position near that target.

Omaxe has been in a contracting range for more than a month now. Now it has reached a point where it has to break out of the range, either upwards or downwards. The direction is unknown yet. The range, at this point, is between 252 and 269. Whichever direction it breaks out towards, the other level could be used as a stop loss. The target, if it breaks upwards is near 390 and the downside target is near 135. For a stock which has already corrected 68%, it is unlikely that it will lose another 40% from here. So, the chances of it going up are more than it coming down. So, one can buy above 270 with a stop loss of 250 for a target of 385-390.

Attached above is the daily chart of Sterlite Industries which shows that it is now near its resistance line. A positive for this stock is that the RSI has broken through its months long trendline for the first time. A breach of this trendline could take the stock up to a level of near 1000. One should consider buying it above 860 with a stop loss of 755.

There are some other stocks also showing good strength like Divis Labs, Ranbaxy, Infosys, TCS, GMR Infrastructure, Hindalco but they have already been discussed in our earlier newsletters.

Happy investing!!!

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