Technical Analysis

Technical Analysis

Use volatility to pick favourite stocks

The week ended had four trading days and saw two days of gains and two of losses. The intraday picture, of course was completely different because of huge swings. The market opened stronger each time on the back of global cues but was unable to hold on to the same. The final outcome for the week was a flat market with the Sensex gaining 5 points, or 0.01 per cent, to close at 34,010.76 points. The Nifty lost 2.65 points, or 0.03 per cent, to close at 10,452.30 points. In contrast, the Dow Jones gained 1,028.48 points, or 4.08 per cent, to close at 25,219.38 points.

Broad, range bound mode continues

An old dictum in the market says never fight a trend. So, for all the fears stalking the street, stay long if the market is moving upward, and do not try to predict when the trend will end. However, giving fears their due, have a stop loss on your long positions. And as the market moves up, keep increasing the level of stop loss. This will protect your profit.

Will continue focus on India's premium smartphone mkt: OnePlus

Chinese handset maker OnePlus will continue to focus on the premium handset market in India, a segment that is dominated by Samsung and Apple, to drive its growth in the country.
"India is a very important market for us. We have seen our market share growing here and we will continue to focus on the premium segment (USD 400 and above) here," OnePlus General Manager India Vikas Agarwal told PTI.

Russia, upping pressure on Telegram app, says terrorists use it

Russia's FSB security service said on Monday that the Telegram messaging app had been used by terrorists to plot atrocities on Russian soil, increasing pressure on the service days after the authorities accused it of violating Russian legislation.

Russia's communications regulator Roskomnadzor said on Friday it would block Telegram unless it handed over information about the company that controlled Telegram, something it said Telegram had so far refused to do.

More consolidation ahead

Once again, a scare visited Dalal Street last week. It happened on Thursday. The way the Nifty slipped below its day’s high along with the weak market breadth gave market players a feeling that finally the long-feared correction is about to start. It didn’t matter that the index closed flat that day.

Keep booking profit

It was a week in which the index had corrected marginally, but if you ask any trader or retail investor whether he had felt the correction, the most likely answer would be no. Reason: while the large-caps stagnated and the Nifty corrected, mid-cap stocks had been rising. Though the last two sessions saw some correction in the mid-cap segment, it came largely in batches, with one sector correcting and another rising.

Choosing winners

Now that the Union budget is over, fund managers who had held back cash from equity investments last month, would now be deploying the hoard in sectors that have turned appealing post-budget.
The budget’s efforts at consumption revival through a personal income tax reduction and a renewed focus on rural India and affordable housing had stocks of consumer facing sectors like banks, automobiles and realty rising. The budget’s stress on infrastructure development has buoyed up the stocks of related segments.

Stay with a bullish mindset

After moving in different directions for weeks, the broader market and the Nifty 50 index have converged last week, with both displaying a bullish trend. For the past many weeks, a divergent trend existed in the market, with the market breadth having a bullish undertone when the main index remained range-bound. Last week, the Nifty broke through this trouble zone. The trigger for this upward move was the budget holding no surprises on long-term capital gains, an issue that has been weighing down the market.

Bulls may cover more distance

The first hints of what the new US president would bring to the emerging markets came on Thursday. When the Indian market opened for trade on Thursday, pharma stocks opened lower and stayed under pressure. The reason for the gap-down opening was an utterance from the US president-elect that pharma companies might have to shift manufacturing base to the US and bring down drug prices. This statement and the reaction of the Indian stock market was pretty much similar to the ones witnessed a few days back in IT stocks.

Bulls will need more push

The Street sentiment was better last week than in the previous week, though the pace of Nifty’s rise was slower. The market breadth was relatively much better and most stock futures saw short-covering, leading to mark-to-market gains for traders.
The market’s movement post-the holiday season in the West indicates that all is not lost for the Indian market. The weakness in the dollar, after a long phase of strength, also contributed to the market’s rise last week. The dollar’s decline led to unwinding of short trade in emerging markets, most of which saw upward moves.