Another New High on NIFTY

NIFTY
is capturing New Highs with every session. Today Nifty has closed on the highest high from 25^th January 2008, a 113 week high to be precise. A serious point here is that, along this presumed happy Journey of NIFTY while some of its sister indices like DEFTY, CNX IT, CNX 100 and BANK NIFTY too have given new highs, there are some serious cautions that the present market is giving us.

Volume on the NIFTY has hit more than a month low, yes while prices are moving higher, buying power is getting dried out. This is a serious caution that, 'I am tired of climbing, please be prepared to hold me on my fall.' Isn't it amazing? There are always clues on the trail about what is going to unfold in the immediate future, only those who observe can get these early signals.

Weekly chart of NIFTY has its MACD Histogram managing to move its head above water so far this week, though it is very early to com to a conclusion on this. But the daily chart shows high strength on the MACD lines. An indication that there is a likely fall but, that is a opportunity to get in to enjoy the last ride. So be on alert to trade long on fall to value.

5375-390 is a very strong resistance area for NIFTY. While reaching there on the coming sessions, please take utmost precaution on long positions. It does not mean to exit longs at resistance levels, exit only on first signs of weakness. If there is strength on the indicators, just hold on and bank the profits.

CONSUMER GOODS Sector took lead today followed by INDUSTRIALS AND BASIC MATERIALS. ITC has single handedly managed to pull this Sector to lead the rally today. Though many other Industry groups in this sector witnessed bullishness, it was ITC the star performer in this Sector. ITC has closed on an all Time high. Automobiles-Cars and Jeeps & Plantation Industry groups joined hands with Tobacco Industry group to keep CONSUMER GOODS Sector at the top.

INDUSTRIALS were lead by Cement, Engineering – Heavy and Transport. While AMBUJA CEMENTS gave a strong move, ACC is struggling. Cement has retraced multiple bearish divergences on all indicators on both weekly and daily charts. On weakness setting in, ACC will lead on the fall.

BASIC MATERIALS, ALLUMINIUM Industry group registered robust gains today. HINDALCO is rocking; it has registered close to 40% gains from recent bottom.

From our calls given in our previous post RALLIS has triggered entry, while SUNDARAM FASTENERS was not. RALLIS has closed weak today, hold for stop at 1184. Weekly chart of this stock is strong and it also mirrors its Industry group chart. Even if stop is triggered there is a re-entry immediately.