Every day new highs for the indices as the bulls continue to make hay. New levels for the indices and scores of stocks. The only way to make money in this strong bull market is to stay invested in the stocks which are zooming. Do not try to guess the top. Avoid listening to the people who are cautioning you especially on financial news channels. The intermediate trend is extremely strong and we are likely to see higher levels, more than we have ever imagined and also faster than we can think. Traders must hold on to their long positions especially in the indices and trail the stops as the indices move higher.
Then how does one know that a big intermediate top is in place? I suggest that investors and traders must look at the volume action and only when they see five to six days of large volume down days in a week or two, it will mean that the big investors are looking to get out and that is the time we must also look to follow suit. Till such time stay invested and use trailing stop to hold on to the long positions.
In the last four days ending October 11, the Sensex has gained 5.86% and the Nifty has gained 6.54%. Among the sectors, the BSE Capital goods sector was the largest gainer in the past four days zooming by 8.55% and was followed by the BSE Oil & Gas sector which gained 6.09%. On the weaker side, the BSE IT sector again lagged behind and registered the least gains ending 0.56% higher and was followed by the BSE Healthcare sector which gained 1.09%. The indices have made an intermediate bottom in mid-August as the indices took a support at their 200 DMA’s. The intermediate bottoms formed by the Sensex and the Nifty were at 13,779 and 4,002 respectively, and as these levels are quite far away the bull-run will continue and the indices will continue to remain in it. These indices will have to drop below these levels in the next intermediate correction for the major uptrend to end.
The target for the Sensex and the Nifty to drop into a fresh intermediate downtrend is at 17,287 and 5,000 respectively. As long any minor corrections ends above these levels, the intermediate uptrend continues and bulls must continue to make hay on the long side.
Today, I will take a look at the cement stocks. Most of the stocks in this sector are in an intermediate uptrend. There was consolidation in many of these stocks in the past week or two and are now poised to move higher from the current levels. Traders can also look for trading positions in this sector with a strict stop loss.
Shree Cement remains in a major uptrend like most of the stocks in the cement sector. The stock has been making new highs and the recent breakout as seen in the weekly chart gives the stock a target of 1,750 on the upper side. In the past few days, the stock has been consolidating sideways and is poised to move higher once it crosses 1,695. Investors must hold on to their long positions in the stock with a stop at 14,800 and trail the stop as the stock moves higher. Traders can pick up long positions with a stop at 1,500. Both, investors and traders must trail the stop as the stock and the indices move higher.
ACC has also made it to the new high territory like many of the stocks as the sector is now poised to move higher after consolidating sideways for a week or two. With the indices making new highs, we are likely to see most of the sectors moving higher and then consolidating as long as this strong intermediate uptrend continues. ACC has been in a rising channel since April, and as long as the stock stays this way investors must hold on to their long positions. Only a drop below the rising channel must be used by investors to liquidate long positions in the stock. Traders can look for long positions with a stop at 1,132 and must trail the stop as the stock moves higher.
India Cement
India Cement is one of the strong stocks in the cement sector and was the first one to make it to the new high territory even though the indices were struggling below its earlier intermediate top. This means that the relative strength-line for the stock is pretty strong and higher levels could be seen by the stock soon. Stay invested with a stop at 250 and trail the stop as the stock moves higher. Traders must also trade in strong relative strength stocks. The weekly MACD Histogram for the stock is making higher highs indicating a strong momentum and higher levels by the stock in the current and the next intermediate rise.
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