Week starts on a slightly positive note - Angel Broking

Sensex (19906) / NIFTY (6024)

The week started on a slightly positive note in-line with mixed global cues. During the day, positive momentum on the back of Inflation data and the Finance Minister's decision to defer the implementation of 'General Anti-Avoidance Rules (GAAR) led the index to close at the highest point of the session. Undoubtedly yesterday's rally was led by the Realty and IT counters; whereas the Auto sector remained marginally under pressure. The advance to decline ratio was strongly in favor of advancing counters (A=1305 D=790) (Source - www.bseindia.com).

Formation

- The '20-day EMA' and the '20-week EMA' are placed at 19562 / 5942 and 18937 / 5749 levels, respectively.

- On the daily chart, the benchmark indices are facing resistance near the 'Upward Sloping Trend Line' drawn by joining the highs of October 5, 2012 and December 11, 2012.

- The daily 'RSI - Smoothened' is negatively poised.

- We are also observing a 'Negative Divergence' in the daily 'RSI' momentum oscillator.

Trading strategy:

The first day of the week was dominated by the bulls mainly on the back of few domestic events. In the process, the Sensex has closed above previous week's high of 19857; but the Nifty is yet to cross 6042 level. Hence, going forward, a sustainable move above 19949 / 6042 may result in extended move towards 19950 - 20100 / 6070 - 6125 levels. As mentioned in our earlier reports, we reiterate that traders should consider reducing long positions and partial profit booking in individual large cap counters near to the 19950 - 20100 / 6070 - 6125 . On the flipside, last week's low of 19596 / 5940 would now act as a key support in coming trading session.

Source : Equity Bulls

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