Stock To Watch 03 05 2011

• GT OFFSHORE 268.30 TA Insync is moving down in GTOFFSHORE. Sell with stop loss above 273.
• BHEL 2020.10 NR7 pattern in BHEL. Sell with stop loss above 2040.

Nifty breaks down its large trading range (5730 5900).

Nifty Watch:- Today Nifty opened at 5766. At the same time Nifty touched its day high at 5775 and then start moving down and touched it low at 5687 and finally closed at 5697 with a decline of 69 points to its day open.

Nifty breaks down its large trading range (5730-5900) and closed below it. Nifty is now at its previous low which is made on April 19 2011 at 5693. It may possible that nifty find its support and move up and it is also possible that nifty breaks down it.

Trend:- Nifty is breaks down its 200 days MA and closed below it. Nifty trading above to its 50 days MA.

Level:- Looking for support at 5600. Resistance comes at 5800.

TA Insync (55-5) is in downtrend. It is moving down at -19.39. This suggests that Nifty may move down also.

Summary:- Nifty breaks down its trading range and 200 days MA and moving down. Buying is not
suggested now, thus investors and traders should wait for a buy signal.

Market Outlook 03 05 2011

It was a poor opening for the week as Nifty slipped and closed below 5700. Banks and RIL weighed heavily on the indices. Banks in particular were the victims of nervous unloading before the RBI policy and downgrades of PSU banks by Morgan Stanley further aided the negative sentiments. SBI lost around 4% while deep cuts were seen in Bank Of India, Vijaya Bank, Canara Bank, Union Bank, Allahabad Bank, Uco Bank and PNB. Only Indian Bank and IOB managed top buck the overall trend. In fact, IOB was the biggest gainer amongst the F&O counters gaining over 5% with most of the gains coming in the last 40-45 minutes. RIL continued to drift lower and lost another 2%. Cairns and Bharti did manage to support the falling indices but didn’t have any support from other index constituents. Few others that were amongst the gainers were Chambal Fert, HPCL, Unitech, Tata Power, Sintex, Alok and GSPL. Overall, the breadth was poor as declining counters outnumbered the advancing ones by a good margin.

Nifty closed below 5700 for the first time in more than a month and also made a new recent low at 5687. Things continue to look a bit negative as Banking index has also given a short term breakdown below 11450. The RBI policy could set the tone in the short term and more than 25bps rise in policy rates could aid the bearish sentiments. Many banking counters have seen breakdown on daily charts and the volumes have also been on the higher side. OMCs are showing positive intent for past few sessions and HPCL and IOC have seen breakouts on daily charts. More short term upside is likely if they sustain above Rs 343( IOC) and Rs 383( HPCL). Power Grid is interestingly poised and could be a breakout candidate if it moves past Rs 107.50. Some other that look positive are Sintex, Voltas, Sesa Goa, Cipla( above Rs 317), United Spirits( above Rs 1055) and Jet Airways.

Nifty has immediate support around 5660-70 and then around 5590-5610 while resistance is seen around 5745-50 and then around 5790-5810.