It was really a good day for the bulls as they are about the win the battle above the resistance zone above 5330 levels. Nifty futures held the support zones and closed at the days high and mid caps lead the show than the bigger names.As i said in the previous post stocks like SBI and ICICI bank came off from the day's high and it would have been a confusing trade. Though Uco bank and Andhra bank did not give much move on the upside IRB infra led the move from the front rising 4% and it was a decent intra day trade on the long side. For nifty futures 5230-5240 zone is the level that has to be watched as some long positions got accumulated from that zone and as long as these buyers are there nifty could break 5330 on the upside.In the commodities market copper is holding the low zone of 408-410 zone and though a long accumulation could not be seen there would be some upside as long as these levels are held.In the equity market volatility data shows lot of short covering than long accumulation and i expect the long accumulation to start above the mentioned upside cap. Though there was not much of long accumulation in nifty we could see some long build up happening in stocks like l&t , SBI, Canara bank and Axis bank. On the upside it is logical to be on the long side above 5330 but i would like to avoid bigger banking names and concentrate on mid caps Lets keep a range of 5230 - 5330 and break on the upside could be a break out trade.
How to choose stocks if there is an upside move
My list includes Pnb , Hdil, Voltas L&t Ifci and R power. Among these stocks as a positional trader i would like to take one from the bigger names (one among pnb and l&t) and 2 from the smaller ones. Though PNB can come in a buy i would like to avoid the most obvious banking names.The pattern of l&t looks much better , the volume and open interest data were much convincing. If i need a high beta one i would go with HDIL and R power to have a complete sector diversification. Thus it is up to the traders what to choose and when to enter. If it is a good gap up opening you can go with ones which are at comfortable buying levels and i would like to take these as positional trades just because if it crosses 5400 on the upside on any day i would not like to add any fresh positions into the current portfolio and would like to hold it .On the downside 5190 - 5200 is the important level to watch for nifty futures as the downside risk would be open below that. Thus if there is any rally on the upside and not getting any opportunity to get in , 5230-5240 would be the dip where i would add my long positions.
View on Nifty Expected levels Trend reversal
Neutral - Positive above 5330 5470 5180
Long term ( Positive ) 5625 4950
