Nifty 31-1-2011

• Another week of continued selling to result in breakdown of 200 DMA and lead the markets to closed below all the major supports.
• 5380 is the first important support for the market 200 DMA around 5620 levels would now act as resistance level for the nifty.
• Today market is expected to trade in the range of 5538 – 5680.
• Hold nifty Sell with stop loss 5620 on closing basis..

Economy Survey

• Baltic Dry Index is trading 3.890% down at 1186 from previous day’s close.
• SGX Nifty Future is 26.50 points down trading at 5603.50.
• Crude is trading at $85.13/bbl trading 51 cents up from previous day’s close.
• December inflation stood at 8.43% Vs 7.48% (Mo, M). The annual reading for October was revised up to 9.12% from 8.58%. November Primary Articles inflation stood at 13% Vs 16.68% (MoM); WPI Primary Articles Index stood up 0.8% (MoM). Manufactured Products inflation stood at 4.46% Vs 4.56% (MoM).
• Q2 GDP at 8.9% Vs 8.8% (QoQ); Farm sector growth stood at 4.4% Vs 2.8% (QoQ); Manufacturing growth declined 9.8% from growth of 12.4% in last quarter; Mining sector growth declined 8% vs. 8.9% growth in last quarter; Construction sector growth at 8.8% Vs 7.5% (QoQ); Services growth at 9.8% Vs 9.7% (QoQ); Industry growth at 9% Vs 10.3% (QoQ).
• Industrial growth plunged to 2.7% in November 2010 as against 11.3% (YoY). Manufacturing growth declined to 2.3% against 12.3 % (YoY), 11.3% in October. Mining growth also fell to 6.0% against 10.7% (YoY), 8% (MoM). Capital Goods Growth at 12.6% Vs 11% (YoY). Electricity Growth at 4.6% Vs 1.8% (YoY).

Stock In News 28-01-2011

ONGC finds maiden shale gas reserves in India

ONGC has struck natural gas reserves in its maiden well drilled to tap shale gas in West Bengal. The breakthrough is significant as India is the first Asian country where gas was discovered from shale. The estimated expenditure is about Rs 168 crore and the total project is expected to be completed within 520 days. (Source: Business Standard)

NTPC, NPCIL form JV for nuclear power projects.

A joint venture company between NTPC and Nuclear Power Corporation of India (NPCIL), Anushakti Vidhyut Nigam, has been incorporated for developing atomic power projects in the country. NPCIL shall hold 51%and NTPC shall hold the balance 49% of the equity. NTPC has set a target of generating 2,000 Mw of nuclear power by 2020. (Source: Business Standard)

Dr Reddy's sees impact from GSK deal in 2-3 yrs

Dr Reddy's Laboratories will start to see the benefits from its tie-up with Britain's GlaxoSmithKline in two or three years. GSK signed a deal with Dr Reddy's in 2009 giving it access to the Indian firm's portfolio and its future pipeline of more than 100 branded generic pharmaceuticals. (Source: Economic Times)

Marico to hike prices by up to 9%; to invest Rs 60 cr in FY'12

Marico will increase the prices of its products by up to 9 % in a bid to offset high input costs. The company is also planning to invest about Rs 60 crore during 2011-12 financial year in its capital assets. (Source: Economic Times)

Cipla promoters in sale talks with global firms

The promoters of Cipla are in negotiations to sell their stake to a global buyer. Cipla with over 5% market share makes a good fit for any company looking for a sweet spot in the Indian Pharma market. The promoter stake in the company is likely to be valued around 8,000 crore.

Market Outlook for 25 01 2011

The key benchmark indices edged lower but regained strength in morning trade after seeing a bout of volatility at the onset of the trading session. The Sensex regained the psychological 19,000 mark soon after falling below that level for a short while. The market extended gains in mid-morning trade and continued to pare gains till early afternoon trade, after striking a fresh intraday high. Banking shares saw an across-the-board rally, buoyed by good operating performance by sector majors SBI and ICICI Bank. Market breadth remained strong. The key benchmark indices logged in decent gains and closed on a positive note, with the Sensex and Nifty closing up by 0.8% each. Mid-cap and small-cap indices also closed up by 0.8% each. Among the front liners, SBI, Tata Steel, ONGC, Maruti Suzuki and HDFC gained 3–4%, while Wipro, RIL, Cipla, Hindalco and RCOM lost 1–3%. Among mid caps, Core Projects, Glodyne Tech, Prestige Estates, KSK Energy and Monnet Ispat gained 9–10% while Sunteck Realty, KGN Inds, Jyothy Lab, Hathway Cable and Gujarat NRE Coke fell 3–5%.

Expert Sentence

To be a successful trader you have to have a complete commitment to trading and do it full-time. Trading must be addressed as a profession, because if you do not treat it as such, those who do will separate you from your money very quickly. There is no shortcut in trading, the market will quickly find out if you are lazy. – Mark Cook

Stock To Trade 24 01 2011

1. BHEL ;- Oversold TA Insync in BHEL. Buy with stop loss below 2160.
2. Petronet :- NR7 pattern in Petronet. Buy above 130.50., sell below 128.
3. Tata Chem :- TA Turtle downside breakout in Tata Chem 30 min chart. Sell with stoloss above 381.

DERIVATIVE STOCK TIP 24 01 2011

GODREJ IND (CASH – Rs.183.55): The stock has formed a higher bottom in the daily charts and has consolidated between Rs.172 and Rs.186 for the past 7-8 trading sessions. Buying is advised above Rs.186 for a target of Rs.191 and Rs.196. Higher target of Rs.201-203 is also possible. Stop Loss of Rs.174 should be kept. The time frame of the trade would be around 8-9 trading sessions.

Market Outlook for 24 01 2011

Markets had a slightly better week as Nifty managed to close marginally in the green. Week was thick with corporate results as the stocks reacted accordingly. TCS and HCL tech were the clear gainers both at the bourses as well as the on the corporate scorecard. Banking stocks were in action as most of the banks came out with good numbers. Bankex gained around 4.5% for the week as good results triggered short covering in some of the banking heavyweights. SBI slipped below 2500 but recovered smartly towards the end of the week to close with around 4% weekly gains. ICICI was up around 5.5% and most of the mid cap banking counters too closed the week with decent gains. BSE IT and Metal index were the other two to post decent weekly gains. Oil&Gas however, was a drag on the indices as ONGC lost over 6% while RIL too closed in
the red. RIL came with results that were in line with expectations and may not impact markets when they reopen on Monday. Any weakness to around Rs 950-960 should be used as an opportunity by positional traders to accumulate RIL with 4-6 weeks perspective. Capital Goods sector was the other one that showed weakness and L&T was the main reason for that as it lost around 3.5%. L&T is still not showing any signs of bottoming out. ITC slipped after posting expected numbers and is looking weak on charts, particularly if it begins to trade below Rs 166. Rs 174-75 would act as a strong resistance in near term. Banking stocks are showing some strength and are expected to extend rebound next week too. Bank Nifty could target 11350- 11400 if it trades consistently above 10950. SBI came out with better than expected numbers on Saturday and is likely to extend its technical rebound on Monday. Next week could be an action packed week as there is credit policy on 25th and expiry of Jan series on 27th Jan. Volatility could again be on the higher side.
Nifty is basically stuck between 5650 and 5750 and a breakout beyond 5750 could force short sellers to close positions which in turn might take Nifty to around 5830-5850.

Nifty has immediate support around 5650 and then around 5610 while resistance is at 5740-50.

Stock To Trade on 21-01-2011

1. Godrej Inds :- TA Turtle upside breakout in Godrej Industries 30 min chart. Buy with stop loss below 170.
2. HUL :- Oversold TA Insync in HUL. Buy with stop loss below 295.
3. SAIL :- NR7 pattern in SAIL. Buy above 170, Sell below 165.

CHOPPY, VOLATILE INTRA DAY ACTION FINALLY LEADS TO GAINS

The markets continue to be choppy - this means that prices move up and down without making any head away in either direction.

Beyond this choppiness is the trading range which has developed for the Nifty - between 5650 and 5750. The Index has spend five trading days inside this range. A breakout above 5750 or a breakdown below 5650 will give a directional move. I cannot forecast the direction in which the Index will finally move. Suffice to say, once the Nifty moves out of this range we should get on board.

The Bank Nifty has seen gains for the past four days, however small. Since the Bank Nifty had fallen a lot, these small gains could easily be considered as a counter trend move before the main down move resumes. The last pivot high in banks was 11160. If and when the Banks move above this pivot, buying will be justified. Till then, trade on the intraday charts with the purpose of capturing small moves.

DERIVATIVE Stock

• IFCI ( CASH – Rs.58.70) : The stock has given some indications of bottoming out. Buying is advised above Rs.59.25 for a target of Rs.60.50 and Rs.62. Higher target of Rs.64-65 is also possible. Stop Loss of Rs.55.25 should be kept. The time frame of the trade would be around 7-8 trading sessions.
• ALLAHABAD BANK ( CASH – Rs.211.80 ) : Buying is advised above Rs.212 for a target of Rs.216 and Rs.220. Higher target of Rs.223-224 is also possible. Stop Loss of Rs.204 should be kept. The time frame of the trade would be around 5-6 trading sessions.

Market Outlook for 21-01-2011

Nifty moved up sharply in the latter part of the session to close above 5700. For greater part of the sessionmarket traded in the red as yet again a few heavyweights like RIL put pressure on indices. Nifty slipped below 5650 mid session before short covering coupled with some value buying in banking counters improved the sentiments. Banking heavyweights like ICICI bank and HDFC bank were amongst the prominent gainers and that boosted the sagging indices. Even SBI that made a new recent low at 2463 recovered sharply to claw its way back above 2500. Other mid cap banking counters too continued to move up. Some of the prominent gainers for the day were Orchid, Indian Bank, Dena Bank, IDBI, Syndicate bank, IFCI, IOB, Al Bank, Can bank and Central Bank. RIL was bogged down yet again by various rumors as it slipped to around Rs 950. It recovered a great part of its intraday loss towards the close but still ended the day in red. Some other losers were Crompton, United Spirits, Gail, PTC, Jain irrigation, Petronet, ITC and ONGC.
Nifty bounced back from just around the previous recent low at 5628 and recovered smartly to close above
5700. It seems that market is finding support around 5630-5650 and could again try to move past 5740-50. Banks are finding some buying around current levels as most of the banking results have been good so far. That is perhaps leading to some kind of short covering ahead of credit policy on 25th Jan. Even a reasonable technical rebound in banking counters could support indices. Allahabad Bank, Indusind Bank, Central bank (above 174), IOB, Syndicate Bank, Can Bank ( 602) and Yes Bank( above 278) could see reasonable upside from current levels.
Nifty has immediate support around 5650 and then around 5610 while resistance is at 5740-50.

Stock To Trade

• Allahabad Bank :- 206.80 TA Turtle upside breakout in ALBK 30 mins chart. Buy with stop loss below 202.
• BIOCON :- 377.55 NR7 bar pattern in Biocon. Buy above 380, Sell below 372.
• Bhushan Steel :- 427.45 Bhushan Steel corrected to its support. Buy with stop loss below 415.

Did not work out, Nifty closes below 5700, fails to cross 5750

The Nifty may have given a sign of strength above 5750. But, today, 5750 remained a strong resistance level, and, the market did not close well for the bulls.
The intermediate trend is down. The short term trend is sideways. A close below 5671 will change this
trend to down while a close above 5750 will change it to up. These levels were given for wednesday, and, remain valid for thursday as well.

Market Outlook for 20-01-2011

Nifty failed to make any headway beyond 5750 and despite some positive cues from overseas markets as well as gapped up opening, Nifty succumbed to selling at higher levels to slip below 5700. Broad market was positive but Nifty was affected negatively by selling in key heavyweights like RIL, SBI and Infosys. Metal stocks were positive and buying was seen in stocks like Tata Steel, Hindalco, SAIL, Sterlite, Ispat and JSW Steel. HCL Tech surprised the markets positively and was one of the leading gainer for the day. Some of the mid cap banking counters moved higher on account of some short covering as did some Realty counters. So, in the gainers list we had stocks like Can Bank, LIC Hsg, Yes Bank, OBC, Dena Bank, Andhra Bank, DLF and Sobha. Nifty faltered around 5740-5750 as key heavyweights witnessed selling. It seems that Nifty is trying to stabilize around 5650-5700 but broadly the momentum would remain with the sellers as long as Nifty remains below 5750. Heavyweights are showing divergent trends and that is keeping Nifty in check. Short covering bout could continue to lift some mid cap banking counters and some more upside is likely in stocks like Dena Bank, Andhra Bank, Allahabad Bank and the likes. But still it would be too early to call a bottom in these counters. We continue to believe that bottoms would first be visible in bigger banking counters like SBI, ICICI, Axis and HDFC Bank. Hindlaco and Sterlite have seen good moves in last two sessions and both are approaching significant resistance at 240-42 and 186-89 respectively. Sesa Goa could see more upside if it manages to move past 328.

Nifty has immediate support around 5650 and then around 5610 while resistance is at 5740-50.