Saturday, March 29, 2008

Buzzing India stocks for the week

Nifty has gained 8.05% during the week and has closed at 4942. Junior Nifty and Midcap Index gained 11.65% and 8.65% respectively.

There is no change in our analysis though. This week's rise could be attributed to the extremely oversold condition of the market and as a result we witnessed a technical rally. 30 + stocks gained more than 30% during the week.

The top 5 gainers are:

BAGFILMS (50.09%), TELEDATAGL (49.18%), ELECTHERM (47.97%), GHCL (46.91%), RJL (45.25%)

However, these stocks have been thrashed badly from their recent highs and also have made bearish patterns on charts. It is probably worth waiting for some more time to confirm the bullishness.

When stock breaks an important resistance after a congestion or consolidation pattern prices tend to go up; nevertheless, the previous resistance acts as support when the stock declines. Similarly, when an important resistance is broken, stocks tend to rally and try to test the previous support (which is the resistance now). Traders shouldn't get carried away with such rallies and watch from sidelines since it is not possible to determine whether a stock has hit the bottom unless confirmed reversal signs appear on charts.