DowJones 10150-10550, Nifty 5050-5180 range seen, Watch out for sectorial moves

Nifty is still trading in a tight range of 5050-5180, the range is so confined that it is observed that the intraday high of last 3 days is almost same and intraday low of last 2 days is almost same. Same is the case with DowJones which is also trading in a range of 10150-10550 since 1st week of November, the only difference is that the range of DowJones is almost double of the range of Nifty.

At this point of time i would like to advise people :

1) With over-leveraged positions to keep a trailing stop loss of 5050 ( It's a request, remember its better to book a small loss rather than a huge loss as you are already over leveraged ) to your extreme short term positions

2) With short positions to keep a stop loss of 5180 on closing basis, the reason why i am saying closing basis is that the there is a huge possibility of " fakeout" instead of a " breakout" on Nifty.

3) Who are still sitting on Cash to invest 25% and take a longer time horizon of more than 1 year and wait for market dips to invest the rest 75%. There focus should be on mid-caps rather than large caps as still there are many opportunities left in the mid-cap space which can hugely outperform the large cap space.

DowJones View:

The rising wedge pattern is followed since March 2009, these 2 black lines are converging and the index is trying to maintain within this space only but the time has come to get out of this space. 10150-10550 is the range which the index is maintaing since Nov 2009. So a breakout or breakdown must be coming in the next few days.



Sector Watch: Fertilizer Space

Two of the stocks which are looking very good are Chambal Fertilizer and Nagar Fertilizer and charts of both the stocks are posted below:






Have a nice trading day

Regards

Ankit