BANK NIFTY FUTURE, SBI FUTURE & DCB

SBI FUTURE WEEKLY / DCB MONTHLY

BANK NIFTY FUTURE WEEKLY

BANK NIFTY FUTURE:
In the attached chart you will observe that after taking support on the lower parallel line (in Blue) of Andrew's Pitchfork, Bank Nifty Future has been showing strength for the past five weeks - with the last week's close (10643) near the high of the week.
One can consider going long - on declines, with stop loss of 10500 ( mid-point of the range shown on chart in Red). On the way up, 11000-11200 is a major resistance for various reasons shown on the chart. However, if Bank Nifty Future manages to break the trend line resistance near 11200 levels, it can then go up to 12000-12500 and face resistance (marked in Red downside arrows) at the median line as had happened in the past. Though this sounds like wishful thinking today, it seems possible in the event - RBI reduces the Bank Rate, as was done by ECB last week.
As Bank Nifty shows strength, the same is ought to get reflected in many of the Bank stocks. I have identified two stocks which are discussed below:
SBI FUTURE WEEKLY:
On the attached chart, you will find that the price is ready to move out of the trend line. One can consider going long – on declines, with stop loss of 2150. On the way up, it will face resistance at 2300-2325 and major resistance at 2540-2550 range.
DCB MONTHLY:
On the attached chart, you will find that the price is in the range of 30 to 75 for the past 28 months. It is now close to breaking the triangle formation when the price moves above 49. Considering that Bank stocks are showing strength, one can consider buying the stock in anticipation of the breakout. The stock closed at 45.50 last Friday. One can consider going long – on declines, with stop loss of 42. Though triangle breakout above 49 gives target price of 94 (shown on the chart), on the way up, it will face resistance at 53 – 66 and 75.

Please do not trade/invest without STOP LOSS.

With Best Wishes,

Ketan Asher.

SAIL FUTURE WEEKLY CHART

SAIL FUTURE WEEKLY CHART

With markets not only at home but also overseas turning bullish, one should look for buying opportunites. In my view, Nifty Future can - over the next couple of weeks go up to 5600-5700.

With this backdrop, I find SAIL weekly chart given above, gives a safe opportunity for investor/trader.

In the attached chart, you will find that Sail has been consolidatting for the past 19 weeks and is now ready for a breakout from a triangle pattern. The breakout happens at 94 (last weeks' High 92) and gives an eventual target of 141 as shown in the chart. Though the breakout from triangle is at 94, it will gather momentum above 100 (previous High) and face hurdles on the way up at 110 - 116 - 127 and major resistance at 140-145 range.

In view of the above, one can consider going long around 92 with stop loss just below 88. As we are just at the beginning of a new FNO settlement cycle, one can even consider buying Rs. 100 Call available around Rs. 0.75 to Re 1/-. With lot size of 4000 shares this will entail maximum investment/risk of Rs. 4000/- .

With Best Wishes,

Ketan Asher.

TURNING POINTS FOR WEEKENDED 01.06.2012

NIFTY FUTURE WEEKLY / NIFTY FUTURE EOD
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A weak open on Monday and further downside for Nifty Future is a foregone conclusion with our markets closing near the low of the week and furhter confirmed by weakness in US markets.

On the attached EOD chart, I have drawn Andrew's Pitchfork which indicates Median Line support at 4675 and Gap at 4656.

On the attached weekly chart, Andrew's Pitchfork indicates Medain Line support at 4700. Thus reading on both the charts does indicate that their exists good support between 4650 and 4700.

From time and price perspective, it is important to note on the Weekly chart that after bottoming out at 4538 (on 20th Dec'11), Nifty Future went up to 5700 in 8 weeks, whereas the current downside from the high of 5700 level has taken double the time (next week is the 16th week from high of 5700) - suggesting lower velocity during the fall and thus providing good reason for possible support in the 4650-4700 range.

The levels indicated above may be reached during the course of the next week and one can consider buying Nifty Future with strict stop loss of 4600.

Have a nice weekend!

Ketan Asher.