A minor dip in a strongly trending market.

Manish.T says “Idea cellular has been under performing the market in the recent past, in fact if I am not wrong it had a breakdown today. Still you recommended to buy it on dips. Why?”
My Notes: Fair question. I am giving below the weekly chart for Idea with notes.

The trend remains up. Prices remain above a previous pivot low. A momentum indicator (smoothed CCI) suggests that momentum has moved into an extreme zone (-100). When momentum suggests an oversold position in an uptrend, we have a low risk buying opportunity. The stock is currently under performing the Nifty, but we have this pattern of sectors under performing while they consolidate, then suddenly moving up.

The Nifty continues to show remarkable resilence. Inspite of two days of declines in the USA, we did not break the 5000 psychological support. My own zone of support is about 4950. A close below this point will suggest that the short term trend has turned down.

ITC has moved up from a minor rounding bottom / inverted head and shoulder (depending on how you look at the patterns), and suggests a target of 253 (223 was the low while 238 is the breakout point approx). We will find out in the next few days.