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Trading Strategy for the week ending January 23, 2000

BSE Sensex: Last week it was mentioned that the Sensex will oscillate between 5630 and 5200 and that's what had happened. It crossed 5630 to touch 5668 and without breaking 5200, touching a low of 5221 it bounced back. Fibonacci count indicates that this will favour bulls and it may cross its all-time high level too. Till this Friday, the market will be in firm grip of bulls. Considering 5398 as weekly support, traders can buy Sensex stocks. On upper side it can flare upto 5570, 5724, 5792 or 5875 points. A close above 5630 will create unexpected buying. Below 5398 it can slide to 5345 or 5240 points.

Reliance: There are no sell signals and negative divergence in oscillators is indicating that is in firm grip of bulls. The main cause for concern is that it has formed an expanding triangle and it will favour bears. Traders can expect heavy selling from Rs 338. Considering Rs 305 as weekly support, buy this stock. A crossover above Rs 321 with high volumes will take it to Rs 338, thereafter it can zoom upto Rs 355. On downside, it can slide to Rs 299 or Rs 290.

L&T: A free fall from Rs 630 to Rs 417 in nine trading sessions looks manipulative. Unless it closes below Rs 440 for two consecutive days, traders should not panic. Below Rs 440 it can slide to Rs 390 but there are remote chances. Box chart indicates a crossover above Rs 470 which will take it to Rs 483, Rs 523, Rs 536 or the last major resistance at Rs 550. In the coming three sessions, expect a relief rally.

Apollo Tyres and Bata: Both these stocks are looking very hot buy and will explode on the upper side. Heavy accumulation is going on in both counters. Grab them if you can for unexpected returns. Considering Rs 174 as rock bottom support for Apollo Tyres, buy this stock. Above Rs 186, it will go non-stop to Rs 199, Rs 218 or Rs this week. Weekly box chart for Bata has given a powerful buy signal and daily chart has started its third wave and it will be dynamic. Above Rs 151 it will favour bulls and a crossover above Rs 164 will take it to Rs 175, Rs 189 or Rs 200. Take a long position.

Bajaj Auto: Falling wedge in weekly chart and a buy signal in MACD indicates that it will spurt heavily. Take a long position in carry forward for one month and get more then 50 percent returns. Above Rs 397 it will favour bulls and it can easily flare upto Rs 431, Rs 471 or Rs 520. Consider Rs 385 as weekly support and Rs 365 as monthly support level. Buy this stock on every decline.

Ashok Leyland and Escorts: Above Rs 136 and Rs 205, both these stocks will favour bulls. Ashok Leyland is ready to breaks a neckline of an inverse head and shoulder. On upper side it can easily flare upto Rs 157, Rs 173 or Rs 190. Consider Rs 127 and Rs 120 as weekly support, buy Escorts on every decline. Consider Rs 202 and Rs 193 as weekly support. On upper side it will flare upto Rs 237, Rs 250 or Rs 270 this week. Both these stocks are ready to start their third wave in weekly charts and a minor correction should be considered as an opportunity to buy.

ICICI and HDFC: Technically both these stocks are going at throwaway prices and will spurt heavily. Buy ICICI for two months and see its price double. Above Rs 143 it will try to touch Rs 163 or Rs 185. Consider Rs 123 as weekly support. Minor resistance levels are Rs 153, Rs 159 and Rs 168. Heavy accumulation is going on in HDFC and weekly chart indicates that it's ready to start an explosive upside movement. Traders can see unexpected price levels in coming days. Above Rs 279 it will be in firm grip of bulls. Upper targets are Rs 316, Rs 343 or Rs 370. Take a long position in carry forward and buy on every decline.

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