In order to get the right perspective, needed to analyse the heavy weights in Nifty. The index although going up has its majority constituents going down. Clearly the heavy weights are propping up the index.
For the above excercise have taken following stocks for analysis. The analysis has been done on basis of monthly candle charts(each candle donates one month) So do not expect the stocks to behave according to analysis in very short term.
First Nifty using daily and monthly charts
For the present it does appear that nifty has taken some sort of support around 11700. However Monday move will be crucial to judge the oncoming scenerio.
It will be prudent to have a upward bias with a cautionary approach.
The cautionary approach I mentioned becomes clear in the above chart. We may be on the final assault on the peak. Therefore caution is required for both the bulls and bears alike.
Sbi has shown huge increase of amplitude. (Shown between points marked A and B. The increase of amplitude donates sideways correction . Now we have the stock going up . Although overpriced , it may move up
Note- The above chart is on a monthly candlestick basis and not to be used for daily trading or cue for buying.
HDFC has shown a typical DOW curve. The last upward spiral is always the frenzied buying by retail investor and selling by institutions.
Therefore although the stock may move up , caution is required at these levels.
Reliance showing the last leg up expected in the spiral.
Infosys , logically must correct as shown in above chart. However the stock has given consistent returns over the years and is still fundamentally strong. There fore prudent not to sell for sake of long term.
ITC should move up but is on its final leg up(which can take it well beyond 350 over medium term. Above chart not to be used for daily trading.