We are not out of woods yet

Yesterday Nifty pulled back to 6000 levels.But the Euro zone problem is still showing no sign of being resolved for some more time . Therefore,  market may remain volatile in short term  with biases on downside. Nifty may correct to 200 EMA which is at 5500 and 5550 was the breakout level of this up move  which terminated at 6330 . Nifty may restest this breakout level of 5550
From here two probability emerge:
1 Market may pull back to recent high and then correct
2 market may correct from here and then pull back to recent high and make new high .
Either way a correction is inevitable and healthy for the market and after a decent correction we will see new high.
Consumption story will play on .  TTk Prestige, Jubilant Food, Bata, VIP, Amar Remedies, Titan , Uflex , Orchid Chemicals should  be on your radar and  correction should be used to buy these stocks.

History Of Nifty Corrections

Nifty is in correction mode. If we go by the history of Nifty it has tendency to correct to 200 EMA . It has done so many times .It has traded below 200 EMA and then bounced back. We are presenting below Nifty daily chart:

Nifty is trading below 50 EMA and you can see it has breached a short term trend line . As per dow theory now the next support is at 5930 which can also be taken as Pivot. If you look at the chart the support area as per the candles is around 5900. If Nifty is unable to trade above 5900 then it may retest 200 EMA.

You can also see that in recent past it has traded below 200 EMA and then bounced back. Therefore, looking at the history one should be prepared for this eventuality. If Nifty on any day closes below 5900 then one should exit from all long positions . At present global and domestic environment are not conducive for a sharp upside . Food inflation is here to stay despite the tightening measures being taken by all the Central Banks. One of the major culprit for this is the climate change which is resulting in fickle weather, untimely rains. Of late , rains in Maharastra has led to sharp rise in onion price. The flooding in Pakistan and Thiland has caused  rice price shooting up .

Videocon and Lupin

Videocon  Ind has mad a multi bottom at 258 and has developed a range at upper prize band being at 270.Traders should watch for  breach of either of these levels .
Lupin has had a closing at life time high and is poised to move higher from here

Tata motors and Amar

Tata Motor has come out with better than expected results.The JLR has once again helped it to improve the margins. The stock is trading at all time high and may again move up and is a good long term buy.
HUL has also trading at ten year high.

There is another stock which trading at life time high and has a very strong pattern on chart. Amar Remedies is slowly and steadily climbing up with strong volume.
We believe from here on market is going to be stock specific. Stock selection is going to be key . Watch out this space for stock ideas.

Happy Diwali

We wish a very Happy Diwali to all our readers.
Markets has already given us reason to celebrate the festival of light.
One should look for Domestic Consumption story as a theme for this year.
We will discuss about it more in coming days.
Nifty has zoomed once it crossed past 6150 , the level which we were talking about for the past one week.

Trade well and trade less

Shipping Sector

 As we expected yesterday Nity had a flat session but shipping sector as a whole zoomed and came out of troubled water with GE Shipping cruising ahead of all. MLL and SCI also followed it. Now for GE shipping the pivot is 340 and if it can retest it then its a good buying area. For initiating long at this stage 340 is support and resistance is at 400.

Some fertilizer stocks also showed upward traction. Manglore Chemical and Fertilizer has support at 41 and resistance at 50-55
Today Nifty may trade above 6150 and if it closes above 6150 then we may see it facing hurdles at 6230-6250
Trade less , trade well

Food Inflation is here to stay

RBI is once again in dilemma over the rate hike . It is on the one hand worried about rising food inflation and on the other hand its  also worried  slowness of growth.
Well, in my opinion it would be a difficult task to tame the rising food inflation. Despite the good monsoon what we are facing globally is fickle and erratic rain fall. In our county we had floods in UK, Punjab which affected paddy crop . We had drought in Bihar and had scanty rainfall in some parts of the country. The area under agriculture is getting reduced day by day and after the Green Revolution there has been no serious efforts to increase the productivity.
Irony of this rising inflation is that the farmers are still not getting the benefit of  higher food price . We will talk about it in detail in some other time.

Today market may remain flat and volatile ahead of the key events.
Keep HDFC and BPCL on your radar.

ICICI Bank

ICICI Bank was up more than 6 % on last trading session on the back of better than expected Quarterly result. This stock has now support at 1105 and resistances are at 1245-1275 and 1300.
Bajaj Auto has support at 1480 and resistances are at 1540-1580 and 1615.This stock is coming out of downward sloping channel and has consolidated a lot.

If Nifty is able to trade above 6150 then we may see some more upside provided RBI credit policy and Fed QE goes well with the market.
Nifty has got supports at 5930-5960 and resistances are at 6150.

Trade less, trade well.