Another week of mixed moved with industries and Sector groups juggling between them at both top and bottom. Technology Sector which leaded the ranking for the past week gave in to small weakness losing the prominence at the top slot. With all the sectors giving dismal performance, HEALTCH CARE took a giant leap this week to close with 2.77% gains to previous week index values. TELECOMMUNICATIONS Sector which went into the bullish trend after a prolonged bear hug could not stay head above water. But both Weekly and Daily charts of Telecommunication stocks look attractive. INDUSTRIAL Sector has closed the weakest with 0.89% loss to previous week's value.
Of the weekly charts of Sector Indices every sector shows weakness with MACD histogram staying below zero even while the price is moving above December-January highs. The only exception being TECOMMUNICATION Sector. While this is the picture on the broad view of the total sectors, Industry group charts speak a different story of each. Some of the bullish Industry groups for this week are Mining and Non-ferrous metals, Fertilizers, Auto 2 & 3 wheelers, Bearings, Cement, Cycles & Tyres, Detergents, Diamond jeweler, leather, Pesticides and Agrochemicals, Telecommunication equipment, Telecommunication services and Hospitals.
The weakest being Sugar, Home construction, Cement Products, Telephone cables and Beverages. With many Industry groups still showing bullish strength, there are possibilities of trend continuation and new long trades from the stocks comprising the above mentioned Industry Groups. Some of the Stocks which need close attention this week are as follows.
Stocks that need to either retrace to value or give an uptick on the MACD histogram of daily chart.
- Hindustan Zinc
- Coramandel Fertilizer
- NFL
- Zuari
- Fortis
- Bata
- Siemens
Stocks that can be bought this week.
- Sundaram Fasteners: Buy above 52.55 with a stop of 51.20 and a target of 58.70.
- Rallis: Buy above 1218 with a stop of 1184 and a target of 1357.
The risk/reward on both these stocks looks very attractive at 4:1. As the broad market shows weakness, trade with minimum exposure so that we do not miss the rally & also safe if we have to be caught unawares. Lets loose less on a whipsaw. Trading is a high probability game, with more than 50% of individual decisions going wrong. But, still it is a lucrative business to be in is because, even the small portion of the winning probability trades, if traded with patience has a huge potential to give back all the losses and add to it a considerable profit too.
Take small risks with a diversified portfolio, when you strike it right, hold with the position in patience, it really pays. Some individual stocks have given more than 200% profits in the past year, while the broad indices which have given just close to 100% and even industry indices have which have given a maximum of 180% gains. It needs patience to reap such manifold gains.
With most of the Sectors including NIFTY retracing very strong bearish divergence on weekly charts, once daily charts mirror weekly patterns, switch over to caution mode. Bulls take the stairs to climb up while bears jump out of the window. Falls can be drastic.
We have given the Weekly and daily free float index values in the zip file. If Free Float Index data is needed by mail directly, please mail us on tradeforaliving1992@gmail.com or post comments on the blog. Happy trading.
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