Nifty weekly update 24-28 Sep 2012

Nifty had a dream run which happens once or twice a year and we might be in the middle of a long term rally. We could see an increase in the turnover data and lot of retail participation could be seen in the equity market which would be a good sign for the markets in the coming days. Though the volatility is on the rise i would like to interpret it as those option traders who are busy making long straddle positions. Nifty is expected to trade till 5850 with a decent support close to 5520 zone. Any dip close to the support zone can create fresh buying interest in the market. It would be a little bit difficult to choose those stocks which have not rallied till now and there would be only a few in that category.It is time for traders to lower the beta of the portfolio and go for low beta stocks like Crompton greaves and BGR energy. Nifty is making higher tops and higher bottom in the daily chart and weekly chart and the momentum indicators are also in the positive territory which is a good sign for the market. There would be lot of debates that could be seen arguing whether it is the beginning of a new bull market or not and for the time being it is better to avoid this kind of noise and concentrate on the trading portfolio's. If we see the cyclical moves too lot of changes are happening in the market structure where new cycles are being developed which i have marked in the chart.

Stock to watch

Crompton Greaves - The stock seems to have completed a bear market and i would like to take long position in the stock by keeping a stop below 110 for a target of 135-140 with a time frame of 15-20 days.