CNX IT Analysis - EOD Jun 27th & Jun 28th '12

CNX IT index has interestingly gone through a very good phase with following events occurred in a structured manner

Please refer to the chart given below for the 5 phase approach mentioned below,

1. A sharp decline - Infosys leading the pull down with the index pulled down

2. 2 Inverted U-shapes formed showing more bearish nature on charts

3. A quick upmove and a small rally

4. A steady correction finding support at 5950

5. A quick gap up opening and further upmove predicted with a U-shape getting formed

Fibonacci Retracement - Support Level

Connecting low formed on Jun 4th i.e. 5802 & high of 6185 formed on Jun 18th, we can get to see the following fibonacci levels

23.6% - 6095

38.2% - 6039

50% - 5994

61.8% - 5050

78.6% - 5885

Previously 3 times we have seen resistance coming around 5950 level and now recently we have seen 5950 kept intact and turned to a support level.

On fibonacci levels 5950 acts as immediate support at 50% retracement level

Taking off 5950, next support level is around 5800 to 5802 level

RSI Indicator

Relative strength indicator shows very positive upmove coming very soon and may take the index to 6150 to 6200 zone. RSI shows around 55 level and can easily jump up to 70 levels before it shows off over bought situation

Williams %R

After a deep correction, CNX IT index is ready for an upmove with the indicator showing a steady upmove

PARABOLIC SAR

There is still uptrend seen, Parabolic SAR is still suggesting a buy with the trend still present down to the candlestick. We have to wait and see if 6150 to 6200 is getting hit by the index

Summary

1. CNX IT looks strong with support level immediately seen at 5950 and next to that at 5800

2. Some more upmove present and can reach 6150 to 6200 level

3. RSI & Williams %R indicator have not yet gone to an over bought situation and infact the curve is just pointing up and intact still

CNX IT Prediction for Jun 28th '12

1. A gap up opening can start around 6070 to 6074

2. Make a high of 6095 to 6100

3. Strong support seen at 6015 levels

Be very stock specific and you can look at buying Polaris, KPIT, Rolta which look steady and strong getting prepared for more upmove