The indices have gained for the ninth successive week as they gapped higher on Monday and the gap remained unfilled throughout the week. The Sensex has a gap between 11,492 and 11,635 on the weekly charts and this gap will act as a strong support to any minor decline in the coming week. The Nifty does not exhibit any gap, while the Nifty future has a gap between 3,519.70 and 3,585. The intermediate uptrend, which had started in May, is still intact, and we have not seen any down week since the start of the current intermediate rise.
The targets for the Sensex and the Nifty to drop into an intermediate downtrend are far away and are at 10,961 and 3,351 respectively. The equivalent level for the CNX Mid Cap index to drop into a fresh intermediate downtrend is at 3,792. These levels will be raised after a minor rise is followed by a minor decline.
The Sensex is at 11,270 and as long as this support holds, the intermediate uptrend will continue. Below this level, the Sensex has a support at 10,285. On the upper side, the Sensex has a resistance at 12,283 and 13,950. The Nifty has a support at 3,454 and like the Sensex, as long as the Nifty stays above this level, the intermediate uptrend will continue. Below this support of 3,454, the Nifty has a support at 3,200. On the upper side, the Nifty has a resistance at 4,000 and 4,200.
The weekly MACD indicator for the indices continues to stay above its trigger line and as long as the weekly MACD remains in the buy mode, the current intermediate rise could continue. The upside target for the Sensex will be 13,950 and for the Nifty it will be 4,200. In the last week, the Sensex gained 4.15% and the Nifty added 4.22%. The BSE Metals index was the largest gainer ending 15.45% higher and was followed by the BSE Consumer Durable index, which gained 10.86%. On the weaker side, the BSE FMCG index lost 0.07% and was followed by the BSE Healthcare index, which ended with miniscule gain of 1.78%.
On Friday, the indices slipped lower as a few sectors, like the cement sector, have started to correct. However, there are a few stocks, which could still improve and there are trading opportunities for short-term traders in these stocks. I will discuss some of these stocks today. Many of the stocks have completed their weekly targets and are facing a resistance at these weekly targets. Hence, any fresh long positions must be taken with strict stops.
Orchid Chem
Orchid Chem broke out of the sideways formation with strong volumes on Friday and suggested higher levels by the stock. The stock is however trading below its 30 WMA and most of the breakouts below their 30 WMA do not signal a strong bullish move even if the major trend remains up. Thus, under these conditions, traders can look for long positions and investors must stay away as the 40 WMA continues to decline. The stock has closed above the weekly Bollinger Band and for the bullishness to continue in the coming week, the stock must register a weekly close above 110. Traders can look for long positions with a stop at 99.
Lupin Chem
Lupin Chem is one of the few stocks in the current market conditions, which is making an all time high and has closed past its earlier intermediate top. The stock has its weekly and monthly moment indicators in the bullish mode and investors must continue to hold on to their long positions. Support on the quarterly chart exists at 536 and as long as this holds, investors must hold on to their long positions. Any pull back towards this support in the next decline, must be used by investors to add to their long positions. On the daily chart, the support is at 700 and any pull back in the coming week will be an opportunity for traders to look for long positions.
Biocon is in a major uptrend and has been trading above its 30 WMA. The short term support to the stock is at 150 and if this support holds, a higher minor bottom in the coming week will give swing traders and short-term traders a good buying opportunity. Keep a stop at the higher minor bottom and trail the stop as the stock moves higher. Once the stock closes past its earlier minor top of 165, it will be heading towards the next resistance of 180. Thus, there could be some more steam left in some of these stocks if the indices do not correct sharply in the coming week.
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