Technical analyst Ashwani Gujral said that if he had to accumulate at around 5,100 levels, a good way to approach the current market strength is that around 5,050-5,100 the market was looking little short. "The March futures were at a 50% discount and February still trading at about 15-20 point discount. So probably this is just a sharp pullback rally which needs to get sold into. In this market, one will anytime get 250 points on the upside. I think it’s a good time to go short probably with a 100 point Nifty stop. I think the maximum this rally could go up to is around 5,240-5,250,” Gujral explained.
Here's how Gujral views the stocks on board:
On Reliance Industries:
Every time the market has to pullback 100 points on the Nifty, Reliance has to do its bit. Probably it needs to cross above Rs 2,650 for us to say that it’s now heading back up to previous highs. But this is really a range bound move from the bottom of the range. One is just having 2-4% kind of pullback in most stocks.
On JP Associates & Balrampur Chini:
JP Associates now needs to sustain above Rs 250-255, that’s the 200 day moving average. It would really gain strength only once it can go pass Rs 290-300. So it means a lot of base building, it’s still probably the weakest stock in the F&O list.
Balrampur Chini is sort of rangebound Rs 78-80 as a support. On the upside it’s unable to go pass Rs 105. Sugar overall looks better than other sectors but because of the market its more range bound and trending upwards.
On power stocks:
Most power stocks are sideways. One shouldn’t expect that they will get back to new highs this year at least because most are over owned, selling is visible at all higher level. This year the under owned stuff, things like pharma, technology and to some extent sugar will move up. So people need to stay away from last year’s hero. We have seen what happened with JP Associates, it’s not the news, it’s nothing, its just that so many people have it that buyer fatigue is setting into all of these stocks.
On cement sector:
Cement has a typical problem that there is a lot of government interference, so people have sort of ignored that sector. But if one had to look at the downside, cement is something which has low downside and could probably have, if not too much upside, some potential for upside because it’s not so over owned as many of the other sectors.
On Gujarat NRE Coke and Unitech:
Gujarat NRE Coke was the weekend pick, so it’s good that it’s done well. It got support around Rs 150. Once the stock makes new highs and comes back and retests the previous high, that’s a good point to get into any stock. I think it should go to about Rs 200-210 levels.
I think Unitech is quite sideways:
Rs 320-330 is the 200 day moving average around here. It needs to get pass Rs 400-410 convincingly to restart some kind of a move. Most of the real estate stocks are now moving sideways, they have probably stopped getting punishment, but it will be a while before they can move up.
On Triveni Engineering:
I think Triveni has good support around Rs 110-115 and if that can hold up, it can get back up to Rs 165-170. But broadly, most sugar stocks are now range bound as the news has been coming on both sides.
On Bajaj Auto:
Bajaj Auto is between ranges of Rs 2,000-2,500, it’s consistently trading below its 200 EMA (Exponential Moving Average) which is around Rs 2,500. It has those 150 points up and down moves but broadly, it doesn’t seem to be going anywhere.
Disclosure: We have some long positions on Nifty
Source: Moneycontrol.com
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