Nifty View: March 2014

Nifty Daily Chart
Nifty is trading in the 5970-6360 range since mid October and both the ends of the range are strong levels of resistance and support. Decisively closing on a weekly basis on either side of the range will signal the next medium term trend. Nifty closed the month of Feb '14 at around 6275 levels. Nifty, on the daily charts has filled up the major gap 6190-6260 level. 6310 zone is the 78.6% retracement of the 6415-5933 move of December '13 to Feb '14 and as such it could be a resistance zone. Nifty has failed to sustain the 6310-6360 zone and will be a level to watch. On the downside, 6180-6200 is a support zone, below that the next support level comes at 6130. If Nifty breaks 6130, we can see it fall back to 6080 levels. Below 6080, we can see 6000 levels on the index. If Nifty is able to sustain above 6310 and more importantly give a weekly close above 6310, we can see a BULLISH trend setting in.

Nifty Weekly Chart
As shown in the weekly chart, Nifty is in a rising channel since the beginning of 2012 and within the channel itself, the index is forming a range with 6310 being a resistance level. On a weekly close above 6310, we can expect a rise till the dotted red line level. If Nifty closes above that level, targets for 6800 open up. However, on the downside, if we close below 6000, we can expect a slide till 5850 levels which is the lower range of this rising channel. Below 5850, the index could move lower to 5400 levels.

CNX Pharma
The Pharma Index this week broke it's resistance at 8000 levels and is creating new highs. With strength in the index, we can expect it to provide support to Nifty. Stocks like Aurobindo Pharma, Sun Pharma, Lupin, Dr. Reddy's can give good returns in the coming few months. And in the uncertain atmosphere before the General elections, we can expect Pharma Stocks to be safe investments. The target for CNX Pharma is 8560-8600.

CNX IT - Weekly Chart
On the weekly charts, CNX IT has given a strong break above the inverted hammer candle it had created in Jan '14 at 10150 levels and subsequently it fell to 9520 levels. Since then the index has risen sharply and this week it broke and close well above 10150. IT Stocks too will provide strength to the market. Stocks to watch: TCS, TechM, Infosys and some midcap IT stocks.

Bank Nifty - Daily
On the daily charts, Bank Nifty has an unfilled gap at 10,800-10,970 levels. Resistance for the banking index exists at 11,000 levels with the gap and trendline which the index broke before falling to 9,900 levels. Support for the stock is at 10,630 levels and below that the index could slip to 10,350-10400 levels.

Read our stock picks for March, 2014 here.
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