A short rally on cards...June 11, 2008

These are very volatile days and there is very little place to hide in this market. One of the sectors which was running up against the market was IT. And now, even IT is showing signs of tiring. In NIFTY, we could have a short rally upto 4600/4700 levels driven by short covering. This will be a purely technical rally driven by oversold conditions. Also, we have 2 hammers in candlestick charts. Hammers when they appear on charts after a prolonged rally signify that the rally is tiring. In this case, the downtrend maybe tiring for a brief moment. Due to extreme volatility, we will still avoid trading NIFTY. Above 4540 NIFTY will try for 4600 levels.

STOCK PICKS
Infosys technologies - CMP 1854. Short on rise around 1890 levels with SL above 1900 for target of 1800. If the stock crosses 1900 with good volumes then it will become a buy.

Neyveli Lignite can be looked at for shorting. Please see yesterday's post for details.

Nagarjuna Fertilizer CMP 42.3, has taken support a lower trendline of a symmetrical triangle and now may try for 46.4 and 50.

RPL has closed above 200 DMA for second consecutive day. Watch this stock above 174.7 can hit 180 straight.

I am posting NIFTY chart here with major supports and resistances.