The chart pattern after the recent bounce back in the Nifty after formation of a positive divergence historically has given a signal that markets have bottomed out, says Salil Sharma
Smartinvestor : Markets have firming up in the past few trading sesssions. The benchmark Nifty is also trading above the 5,900 level today. What strategy should traders adopt at current levels?Markets have firming up in the past few trading sesssions. The benchmark Nifty is also trading above the 5,900 level today. What strategy should traders adopt at current levels?
Salil Sharma : The Nifty has given this bounce back after forming a positive divergence on the 14 day RSI chart which has also got confirmed by the movement of Nifty above its 20 DMA at 5849. Historically this pattern has given a reliable signal that the markets have bottomed out. The trading strategy would be either go long at the current level or after a minor dip with a stop loss of 5840 and target of 6000.
Smartinvestor : Jindal Steel which has retreated from Rs 415 levels in early Feb has been range bound at current levels. The stock has firmed up today. Is the stock likely to breakout on the upside after a preiod of consolidation and what are the near term resistances and targets for the stock?
Salil Sharma : The JSPL share has a very strong historical support band between 340 - 350. This level has given it a bounce back today but the confirmation that it has bottomed out would only come when it gives a move above 395. Till that time it could move in a trading range of 340 - 395.
Please CLICK HERE for the full trancript
