View for the week (27/09/10 - 01/10/10)

Nifty has made its 4^th consecutive Bullish candle in weekly charts continuing the trend of higher highs and higher lows. We are now witnessing short covering in under-performing stocks which have shown signs of reversal while other heavyweights consolidate after strong up moves. Nifty PCR is currently at 1.93 and P/E ratio is at 25.41. FII have been buying relentlessly and aggressively writing options. While DII have been selling to such an extent that this year they are Net Sellers to the tune of Rs 7236 crores. Indicating that the retail participant has been bearish through out the year and might enter now sitting on huge cash loads as those who fell they missed out, it also suggests that Govt DII have been accumulating funds for forthcoming FPO for PSU divestment at higher levels. For the week 5980 is an important level and it appears from option positions that the settlement might end near about 6000.

Support for the week comes in at 5770 / 5830 / 5925

Resistance for the week comes in at 6075 / 6130 / 6225

Stock Picks for the week.

RELIANCE CAPITAL (812)

In daily charts the stock has made a bullish candle and shown signs of reversal after a recent pullback. Derivative data also suggests short covering in the stock. Buy for a target of 825 with a stop loss of 800. The stock has potential to do a target of 850 in the short term.

UNITECH (85.55)

In daily charts it has made a bullish pattern. Derivative data suggests fresh long positions in the stock. Buy for a target of 90 with a stop loss of 82. In the short term the stock can target 95.

MCLEOD RUSSEL (234)

In daily charts it’s within a falling wedge. Derivative data suggests fresh long positions. Buy for a target of 243 with a stop loss of 228. Above 248 the stock can target 275.

NHPC (32.15)

In daily charts it appears to have completed its pullback after a recent breakout. The decline has come with lower volume suggesting more upside. Buy for a target of 33.50 with a stop loss of 31.40. In the short term the stock can target 35.