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Chart Check
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Kunal Bothra
Technical Analyst, LKP SecuritiesDate : 19 Jun 12 | 10:00 AM |
| Smartinvestor : Hi, this is Puneet Wadhwa and we have Kunal Bothra, Technical Analyst, LKP Securities back with us for the Chart Check today |
| Smartinvestor : Good morning Kunal and welcome back |
| Kunal Bothra : Good Morning to you Puneet and all the viewers of the chat. |
| Smartinvestor : The markets are tarding on a cautious note with a positive bias after key economic developments at the domestic level on Monday. How high are the chances that the Nifty will drift lower in the days ahead? |
| Kunal Bothra : I would rate this market as a range bound market, even though the range is slightly broad to consume the volatility in the last few weeks. However, there is no sign of a clear trend emerging in any direction. Technically, I think market would continue to hover in this range of 4800-5200 for the next few days , however, I would look to initiate fresh longs anticipating a convincing breakout of the 200 DMA level. |
| Smartinvestor : How are you approaching the interest rate sensitive stocks now? Do you like anything in the banking and auto pack for a long / short position? |
| Kunal Bothra : Technically many of the stocks are correcting in this phase of correction in the market, but I would wait for a Nifty to trade near the band of 4960-4980 to initiate long positions. At current levels, I think one should wait as the risk reward on the 'short' side is limited in many frontline stocks. |
| Smartinvestor : What about GAIL, IOC and NTPC given that Fitch has lowered their rating outlook? Should one sell out? How do these stocks look on the techncial parameters? |
| Kunal Bothra : Out of the three stocks, IOC looks the weakest, and one can stay short in this keeping a trailing stop loss of 250 levels. Chart of Gail indicates a short term uptrend, with a minor higher high and higher lows kind of formation on daily charts, if it manages to cross 340 again, one can initiate long positions in it. NTPC on the other hand has completed 66% retracement of the fall from 165 levels to 140. I think it could trend lower in the next few sessions probably below the 145 level. |
| Smartinvestor : What are the key support and resistance levels for CNX IT? What is your view on the mid-cap IT stocks given their chart patterns? |
| Kunal Bothra : For CNX IT, resistance is placed at the previous top on daily charts at 6200 levels and with rising support trendline indicating support at 5900 levels. There is not much of a favorable technical chart pattern in the mid-cap IT space, at this point, as even the front line stocks are trading in a range. |
| Smartinvestor : RCom has lost ground today reports that equity research firm Veritas has downgraded the stock to sell. How does it appear on the techncial charts? |
| Kunal Bothra : A severe gap down, with RCOM now trading at all time lows. This is what RCOM looks like technically. I believe the weakness would continue in this stock. Remember only strong optimism can beat strong pessimism. So if such stocks have to reverse a strong downtrend, one needs to wait for a strong upswing with swift price movement. Till that time stock would continue to remain under bearish circumstances. |
| Smartinvestor : Thanks, Kunal for your time and advice. Please give us your disclosures (if any) |
| Kunal Bothra : At LKP, we may have recommended some of the stocks discussed above to our clients. |
| Smartinvestor has logged out at 19-Jun-2012 10:33:20 am |
| Kunal Bothra has logged out at 19-Jun-2012 10:33:28 am |
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