Nifty now has a well established support level of 5970. It once again touched that support on Feb 13 and we covered for our clients . From 5970 – Nifty has bounced 5% in last two weeks.
Nifty has yet to breakout above 6400 and the big challenge will be huge under performance from large caps like Reliance
http://trendzofmarket.blogspot.in/2014/01/reliance-performance-during-upa-2-tenure.html, and
Bharti telecom
http://trendzofmarket.blogspot.in/2014/02/why-bharthi-airtel-is-clear-avoid.html. Both stocks are down 10%+ YTD in 2014. (Nifty YTD is almost unchanged)
Leadership is with IT Sector. It all started with TCS momentum move from 100 wma in April 2012 at price of 1068 (now 2275) followed by Hcl tech when broke out above 520 in August 2012, now at 1575. As the time progressed, the bullishness started spreading. Tech Mahindra and MindTree also made big moves. Mindtree post breakout at 809 in April 2013 managed an impressive bullish move, now stock is at 1640
. TECH MAHINDRA http://trendzofmarket.blogspot.in/2013/07/techmahindra-blasted-multi-year-break.html on JULY 10 2013 was at price of 1125 post breakout. Now stock is at 1867
INFOSYS AND WIPRO TOO JOINED THE IT PARTY LATER when they broke out above 3000http://trendzofmarket.blogspot.in/2013/12/infosys-safe-bet-for-2014.html is not trading at 3800 and WIPRO 510 is trading above 600 now
http://trendzofmarket.blogspot.in/2013/12/wipro-multi-year-breakout-another-techm.html respectively. All these stocks continue to perform and breakout in these stocks have delivered enormous returns.
Momentum has now spread to Midcap IT names: The sector in November 2013 looked like a breakout sector. Most of the breakout stocks have delivered huge returns from 905 to minumum 50% from Hexaware to NIIT Tech to Tata Elxsi. Even smaller names like KPIT and Sasken have done well.
http://trendzofmarket.blogspot.in/2013/11/a-review-on-story-of-midcap-it-bull.html
IF YOU WOULD HAVE INVESTED 25000 RS EACH IN THOSE 4 STOCKS
SASKEN @145 NO OF SHARES 172 CMP 181+25 RS DIVIDEND MARKET VALUE = 35432 RS
TATA ELXSI @ 245 NO OF SHARES 102 CMP 594MARKET VALUE = 60588 RS
KPIT CUMMINS 2 140 NO OF SHARES 178 CMP 182MARKET VALUE = 32396 RS
NIIT TECH @ 310 NO OF SHARES 81 CMP 458 MARKET VALUE = 37098 RS
TOTAL INVESTMENT 1,00,00O RS
CURRENT MARKET VALUE OF INVESTMENT 1,65,514 RS..... 65.5% RETURNS IN JUST 3 MONTHS TIME
HEXAWARE ALSO NOW BREAK OUT TO NEW HIGH YSTD HIT 164 NOW STOCK IS AL READY TO FOLLOW THE PATH OF OTHERS
Pharma has retained its Leadership Status. Dr Reddy broke out above 1800 in Jan-March 2013 and since then has rallied vertically. It is now at 2900. Sun Pharma has been in leadership state since 2010 when it broke out above 150. The stock is now at 640. Lupin in March 2012 broke out above 495-510. It pulled back in June 2012 to 515 and then rallied, now at 940. The Momentum was not only with front line stocks. I covered stocks like IPCA Labs (breakout above 350 – now at 886) and Natco Pharma (breakout at 340 now at 880).Glenmark also broke out in MAY 2012 above price of 340. Now stock is consolidating and may offer buying opportunity near 500. In Pharma space – the disappointment has come on counter of Cipla which has not made much progress on breakout and Ranbaxy stock has been complete disaster.
Recent Breakouts in Pharma Space: The recent Breakouts have been in Aurobindo Pharma (Vertical Breakout above 205 – rallying to 520)
http://trendzofmarket.blogspot.in/2014/02/the-most-dramatic-breakout-of-last-6.html;Biocon (Breakout above 300 to 460);http://trendzofmarket.blogspot.in/2013/07/biocon-fresh-break-out-above-330.html
Glaxo (Breakout above 2400, now at 3045)http://trendzofmarket.blogspot.in/2013/12/glaxo-pharma-another-picture-perfect.html.
Now, even smaller companies are breaking out like Vimta Labs (Breakout at 46, now at 58)
FMCG now Lackluster sector:
In last 6 months, one sector that seems to have lost its charm – FMCG.
Most of the stocks have turned sideways with low trading interest be it
ITC, Hindustan Unilever, Nestle. Even some leadership names like Dabur
have not made much progress, but these stocks continue to be buy on
declines. ITC is a good buy at 285, Dabur near 150, Godrej Consumer
Products at 700, Bajaj Corp near 204.
Metal Sector = Sector in Question mark:
Global environment is not very conducive for Metal sector. Add slow
growth in India to that and it does not paint a pretty picture. Most of
the charts of metal sector in total ruins. Can Sesa Goa turnaround and
breakout above 208? Is tata steel a buy at 330? These are couple of questions which traders will be confronted with in March 2014.
Leadership Stocks: Tata Motors is now trading at Life time high, and the stock is a clear buy on declines. The other stock that has exhibited Leadership over many months now: Zee entertainment http://trendzofmarket.blogspot.in/2014/02/mistake-selling-outperformers-and.html
PSU Bank has become a toxic sector: The entire sector has been hammered out of shape. Look at the chart of SBI. At a time, when Nifty is knocking the doors of all time high – SBI stock is knocking the doors of hell. http://trendzofmarket.blogspot.in/2014/01/sbi-love-lost.html
Why SBI, you look at any PSU Bank stocks be it BANK OF BARODA, Bank of India, PNB, Allahabad Bank, Corporation Bank – all have bearish structures
Private Bank stocks trying to defend their bullish structure: HDFC Bank has been the leadership stock for a while now. HDFC stock also has done well and seems to be supporting the market by holding on to 740-770 band. ICICI Bank and Axis Bank have a well defined resistances to negotiate but they seem to be making the effort to breakout rather than breakdown. Even other stocks like Kotak Bank and IndusInd Bank did their best to hold on to their supports this feb. In smaller names: DCB Bank is trying to hold the breakout levels of 51-52.
Auto sector = Market Performer: M&M stock has retained its leadership status and now trading near life time highs. Two wheeler stocks have developed pretty interesting structure over last few months. Here’s one more stock of the sector that seems to have turned around and sitting pretty on support.
ADAG Stocks: Reliance Capital is trading in a range between 300 and 390. The stock is now at lower end of the range. Will it bounce in March? Reliance Communication made a big move from March 2013 to Sep 2013. The stock has pulled back to 110. How does it appear on charts? MAIL SENT TO PAID CLIENTS
Technically Bearish Structure: Some stocks have technically super bearish structure be it NTPC, Coal India, BHEL, Power Grid, JP Associates. The same is the case with most of the real estate stocks like DLF In these stocks, you cannot even HOPE.
Consumption Play at Support: Has Jubilant Foodworks run its course? The stock is near support of 1000 but there is no trading interest in the stock
Breakout Watch: There are some Large cap stocks waiting to Breakout in next few weeks/months. When Large cap stocks Breakout, then run a distance, as we have seen with frontline IT and Pharma stocks.Will be posting in time to time only for paid clients
Exciting Breakouts in Tyre Sector: There are three exciting Breakouts that have happened in Tyre sector. Ceat broke out above 120 and rallied vertically to 360. Apollo Tyres Brokeout above 102 and now has rallied to 133. Balkrishna Ind broke out above 305 in Jan 2014 and has rallied to 390.
Importance of Momentum Initiation: Just Watch how Bharat Forge got an initial momentum push in August when it rallied from 190 to 230 and how it changed the trajectory of the stock. The same happened with Finolex Ind at 75 in Jan 2013. Now the stock is 180. T. There are many more examples: Mahindra Ugine another unbelievable momentum mover from 75 to 185 in less than 8 months.
Breakouts can be of different types. Some Breakouts are Vertical like Selan Exploration. I covered the stock as it was breaking out above 325-330http://trendzofmarket.blogspot.in/2014/02/selan-exploration-mega-break-out-sucess.html
Before you get excited, Breakouts are of different types and some require tremendous patience and the stocks rally after many weeks of consolidation. The concept behind breakout: Remain hopeful as long as structure is intact.
The trend is your friend. Price is the final arbiter. Market prices are reality
Buy high and sell higher, sell low and sell lower (because we never know how high or how low prices of anything will go, except maybe to zero)
What goes up must come down and vice versa. That’s Newton’s law, not the law of trading. And even if the market does eventually self-correct, you have no idea when it will happen
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