The markets maintained their upward movement for the third consecutive day on the back of strong buying witnessed in the Index heavyweight like Reliance Ind & State Bank of India which has been consolidating for quite some time. Global Asian cues were also positive today. Hang Seng was up 2.14% and Shanghai rose 1.71% and Taiwan Weighted gained 1.2%. The Sensex closed up 107 points to 16,123 and the Nifty rose 22 points to 4,805 after hitting an intraday high of 4842. Metal, oil & gas and capital goods stocks rose today while auto, realty and IT stocks ended lower.

This is the second day where the markets are holding the momentum and are maintaining above the important Fibonacci retracement level of 61.8%, which are 4,775 for the Nifty and 16,035 for Sensex. Markets have entered into a fresh new zone and the only evidence missing was no participation from the heavyweight leaders like Reliance Ind and State Bank for quite some time and today we saw both the stocks zooming with huge volumes.

The technical oscillator RSI on the daily chart is at 64 which are still not in an overbought territory giving sign of an additional 5% rally from this current level in coming days. For tomorrow support for nifty is at 4780?4720, traders can buy nifty around these levels with a stop?loss of 4680. In the immediate term 4870?4910 seems the higher band for the market.

Banking & Metal sector looks a great buy on every dip as action is witnessed in most of the related counters. Avoid buying into smallcap and midcap stocks as we could see a decent amount of profit taking as the main focus might shift to the frontline stocks.

STOCK IDEA:

1) INDIABULL FINANCE (204) – Buy and hold the stock with a stop?loss of 190, counter is in an intermediate uptrend, the technical oscillators are also giving a buy signal, if the stock maintains above 209 in the short run then the short?term target looks 230 and above 250.

2) RELIANCE IND (2075) – This stock has been consolidating for quite some time and today broke?out with huge volumes, technical are giving a buy signal as the stock is well trading above it’s previous “Hawala Price” of 2042. Now going forward this stock should be bought on dip around 2040?2010 level with a stop of 1980 for a minimum target of 2120?2160.

3) STATE BANK OF INDIA (1894) – This stock has been consolidating and waiting for a breakout above 1820, which today happened with huge volumes. Buy on dip and hold with a stop?loss of 1840 for a minimum target of 2005. Unless we see a break below 1815 there is no weakness in the counter.

4) SESA GOA (224) – Buy on dip and hold with a stop?loss of 215, stock is consolidating and waiting for a breakout above 227, if maintains above this level then look for a target of 235?245.

NIFTY FUTURE DAILY CHART (4808): The trend looks very convincing but for further momentum to trigger nifty future has to sustain above 4830 for further major action. In the very short term 4680 will act as a strong support and trade below could possibly bring nifty back to 4570. So remain with the trend and trade cautiously at higher levels.