Market Outlook 06 05 2011

Markets opened on a steady note and Nifty did look like settling above 5500. Considering the fact that indices had to contend with a weak opening in Bharti after lower than anticipated profits Nifty did look like finding its feet just around the 5525-5550 zone. But, it was not to be as after trading listlessly in a tight zone Nifty began to lose ground during the mid session. The downtrend gained momentum from thereon as more and more stocks came under fresh bear assault. Most of the metal counters were weak as were the Realty counters. Heavyweights

like HUL, ICICI, HDFC, Infosys, Bharti , Sterlite , ITC and NTPC struggled and put the indices under immense pressure. The Cement counters continued to be under bearish spell and lost more ground. Hero Honda found buyers and was up more than 6% after management indicated that the company has been able to maintain good margins despite lot of different pressures. It was a decent day for RIL too as the stock was up almost 2% during the day before shedding almost half of its gains towards the close. BOI, Apollo Tyres, MRF, Kotak, United Phosphorous, Tulip, Lupin and Titan were some of the other gainers. But overall, it was another day of bears’

dominance as Nifty closed below 5450. Nifty extended its losing streak for 9th consecutive session and contrary to our expectations there was no support around 5475-5500. Even the so called ‘over sold’ counters did not find any technical rebound and capitulated further. Globally too the things are cooling off a bit as has been seen in the case of most commodities. FIIs remain heavy sellers and that is keeping our markets under lot of pressure. Technically, Nifty has closed below 5500 and now the range between 5575-5610 becomes a strong short term

technical barrier. Out of the few heavyweights mentioned yesterday only RIL and ONGC remain in some sort of positive territory and could support indices. Metal counters continue to look weak. Bhel has seen breakdown today and could target Rs 1940-50. Overall, it seems that one should wait for markets to settle down and find its bottom before looking for trades on the ‘long’ side. Nifty has immediate support around 5415-20 and then around 5365-5370 while resistance is seen around 5515-25 and then around 5590-5610.

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.

Market Outlook 02 05 2011

Last week turned out to be a bad one for bulls as Nifty closed lower on all 5 days of the week. The
momentum picked up on the last two days as Nifty collapsed from around 5825 levels to just around 5700. And this happened in a positive global backdrop as US markets moved to new post Lehman highs. The selling was seen across the board as finally bears asserted themselves as Bulls failed to take Nifty past 5930- 40 despite several attempts. Almost all sectors were under pressure with Realty again playing favorite with bears. BSE Realty index was down over 8% while Capital Goods lost around 4.5% as stocks like Bhel, Crompton Greaves and even L&T felt the pressure. Banking too was down around 3.5%. Only FMCG and Health Care bucked the overall trend and finished the week in green. Overall, nifty lost 2.3% and the broader trend too turned negative as small caps and mid caps also succumbed to bearish pressure. The short term side ways range has finally been settled in favor of bears. 5770-80 that was providing support in the short term has finally been broken and the only positive sign, if we may call that, was the fact that Nifty made an intra day low at 5706 that is marginally higher than the previous immediate low at 5693. But, the overall momentum and the technical picture of some of the key heavyweights suggests that we could be headed lower next week and could see some support around 5600-5625. Resistance on the higher side is likely around 5785-5800 and a relatively stronger one around 5835-40. Bank Nifty has slipped below 11500 and sustained trades below 11500 could potentially take it lower to around 10900-950. Some heavyweights that still retain the positive bias are Bharti, ONGC, ICICI and Tata Motors. Some of the mid caps that are showing positive bias are Opto Circuits, Lupin, Divis, Educomp ( above 485), Exide and Max India.

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

Market Outlook 28 04 2011

The tug of war continued between bulls and bears as we approach the F&O expiry. The prospect of US Fed discontinuing the QE series kept the bulls in check as uncertainty still prevails as to which asset class would be impacted immediately once the bond purchases were discontinued. Nifty opened with a slight negative bias and that persisted throughout the session as unwinding was seen in certain heavyweights. Wipro’s numbers were in line with expectations but the guidance seems to have disappointed the street as stock lost around 4%. RIL too helped the bears as it slid below Rs1000 and closed almost at the day’s low at Rs 986.

Nifty has immediate support around 5825-30 and then around 5770-80 while above 5915-20 fresh momentum is likely. Some correction was also seen in banking heavyweights. Some of the prominent laggards for the day were Ambuja Cement, Exide, LITL, India Cement, JP Associates, Bhel, GVK and Reliance Infra. ONGC, ITC and Bharti were the ones that tried to balance out the bears. ONGC was the strongest of the lot as it rose around 2.5% to close on a 3- months’ high. Bharti too posted a new recent high before profit taking shaved off some gains. ITC hit all time high. Some of the other gainers were Bata India, Praj, Jindal Holding, Godrej Ind, OIL, Educomp and Max India.
Nifty finally closed at the lower end of the day’s range at 5833, down 35 points. Nifty continues to bounce up and down within a well defined range. Nothing much has changed technically after today’s session as we still have support around 5770-80 and strong resistance around 5910-30. ONGC did give a breakout from almost 3 months range and the pattern suggests targets of Rs 322-25 in the short term while over medium term it could target Rs 345-350. RIL has been moving in 995-1055 range but that has broken on the downside and sustained trades below Rs 1000 could take it lower to around Rs 960 and even Rs 940. Bata has seen a continuation breakout above Rs435 and could target Rs 465-470 over next few sessions. Some of the pharma counters like Lupin( above Rs 425), Biocon, Orchid and Divis are also showing positive bias.

Market Outlook 26 04 2011

It was a better week for the markets as both global cues as well as the domestic corporate results helped the bullish bias. Global markets were in fine fettle as sliding dollar index boosted the commodities. Back home, after the shocker from Infosys there were no such unpleasant surprises this week. HDFC Bank, Yes Bank, Indusind Bank posted good numbers and helped the banking stocks to regain positive momentum. TCS came with good results that were inline with the expectations and so the stock witnessed huge volatility and some profit taking at higher levels. RIL declared its numbers after the market hours on Thursday. Results were below expectations as GRMs came in below the market expectations. However, the company also announced some encouraging gas and oil discoveries and that might just help the stock to sustain around current levels. Last week’s best performing sectors were Autos, Oil & Gas and metals while at the bottom of the ladder were Capital Goods, mainly on account of BHEL’s underperformance. Maruti is coming out with its results on Monday and that may have its impact on the Auto universe. Auto companies have been witnessing record sales but the margins would be keenly watched. Technically, Nifty reversed directions from around 5700 and that happens to be the 200 DMA also. Nifty is witnessing huge volatility between 5700 and 5950 as markets reacts to global cues as well as corporate announcements on day-to day basis. The range between 5900 and 5950 is providing stiff resistance and this could continue to be the case even for next week as we enter the last week of current F&O series. Volatility is likely to persist. 5830-40 is the immediate support for Monday but the significant resistance is seen around 5770-5780. The heavyweights are displaying contrasting trends. HDFC and HDFC Bank are positively biased and sustained trades above 732 and 2410 respectively could open up meaningful higher targets. TCS witnessed profit taking around 1240-1250 that also happens to be its all time high. But, the stock remains in uptrend and is likely to find strong support around 1140-1150. Bharti too confronted some profit taking at 375-380 but this is another heavyweight that seems to be headed higher and is a Buy on dips counter. SBI is interestingly poised as sustained trades above 2850 would mean a breakout from around 6 months range.

The stock could than rally to around 3025-3050 over next 2-3 weeks. On the other hand, Infosys continues to struggle and may not move further than 2960-2980. RIL faces stiff resistance around 1050-1060 and is unlikely to pose any threat to this resistance going by the below expectations results declared on Thursday. Auto and Metal heavyweights are in a side ways mode. Amongst the other sectors, Tyres and textiles rallied sharply over last two sessions. MRF and Apollo tyres have broken out from their respective trading ranges. MRF could rally to around Rs 8200 while Apollo has next resistance around Rs 79-80. Arvind Ltd has moved to around 3 years’ high and showing great momentum. Next technical target is around Rs 90-92 but the broad structure suggests great potential over next 9-12 months. Alok could target Rs 29.50-30 and then Rs 34. The textile stocks are showing good bullish structures and it seems that most pure textile stocks are headed for out performance in medium term.

Nifty has immediate support around 5830-40 while resistance is seen around 5920-35.

Market Outlook 19 04 2011

It was a volatile opening to the week as market witnessed strong two-way movement. Markets moved up sharply in the morning session as Nifty moved to around 5900 again. But strong sell-off in key heavyweights at higher levels erased all the early gains in about 30 minutes. Since then it was a struggle for bulls as downward spiral gained momentum as the day progressed. Selling was almost across the board as all major sectors lost ground. Main losses were seen in heavyweights like DLF, HCL Tech, TCS, JP Associates, Sesa Goa, Hindalco, Tata Steel, L&T, Axis Bank and Infosys. Some of the prominent mid cap losers were Opto Circuits, Chambal, Max, Hind Oil, DCHL, Uco Bank, Welcorp, Orbit, Hexaware, HDIL, Polaris and Jindal Holding. Few stocks that did manage to buck the overall bearish trend were MRPL, Hotel Leela, Mundra Port, Jet Airways, GE Shipping, Indian Bank, Crompton and Canara Bank. Volumes were heavy while advances were outnumbered by the declining issues. Nifty failed to move past 5900 despite making another surprise attempt in the early part of the session. Volatility was on the higher side as bears gained control as the day progressed. Wide bars of past 3-4 sessions as well as the heavy volumes today seem to suggest that we could be heading lower to atleast test the weekly supports of around 5625-5640 mentioned yesterday. HDFC Bank came out with good results after market after hours and that may have some bearing on atleast banking stocks in the morning. But technically the banking heavyweights ICICI Bank, Axis and SBI have violated the short term supports at 1090, 1410 and 2760 respectively. So, one needs to take a cautious stance while trading on the long side. Metal stocks are also exhibiting weakness. DLF has seen sharp correction over last few sessions and is now in a heavily oversold state in hourly charts. A sharp rebound from around 228-230 cannot be ruled out in DLF. MRPL saw huge volumes and breakout on daily charts. Sustained trades above 73 could take it to around Rs 77 and even Rs 80. Few others that still look positive are Bajaj Auto, Crompton and ABB.

Nifty has immediate support around 5675-85 and a significant one at 5630-5640 while resistance is seen at 5785-90 and then around 5835-40.

Market Outlook 18 04 2011

Contrary to the expectations the truncated week provided lot of excitement before closing with minor losses. After a lackluster Monday markets zoomed up unexpectedly above 5900 on Wednesday on strong speculative buying in Banks and IT stocks. But, the whole excitement and momentum fizzled out on Friday as two ‘I’s spooked the sentiments. In the morning it was Infosys that disappointed the markets by giving a dull future guidance. Resignation by Mr Mohandas Pai further dampened the spirits. Infosys lost over 10% in one of the worst post results performance by the scrip since 2003. Then came the inflation figures that were much above the expected levels and that triggered selling in interest rate sensitive like Banks and Realty. Banks that had led the rally on Wednesday lost almost all its gains as did Nifty that lost around 100 points. Some mid caps did continue to rally even on Friday but the momentum seems to be waning towards the close. The IT index was the biggest loser for the week while FMCG and Capital Goods indices were leading gainers.

Infosys provided fodder for the bears as Nifty retreated again form around 5925-30 levels. But it seems that more than the results the rising inflation figure as well as resilient Crude prices could play spoilsport for the bulls. The inflation figure of 8.98% has dashed all hopes of RBI not taking any policy action in its next meet. This might dampen the sentiments for one of the pillars of current rally, the banking stocks. Technically too the Nifty has now twice retraced back from the 5925-5940 resistance zone. As mentioned in Friday’s newsletter also that it would be prudent to wait for Nifty to settle above 5925-30 before taking fresh long positions. On the downside Nifty has support around 5750 and then around 5640-50. In fact, on weekly charts 5640-50 support is a crucial one. Some heavyweights that still are showing positive bias are ITC, Bharti and L&T. L&T closed above 1720 again on Friday and one could initiate longs with stop below 1675. Bharti has some resistance around 375-378 and beyond that it could target Rs 410-415. Some other charts that are bullish are IGL( above 323), Havells, GMDC(above 147), Bajaj Auto( above 1425), ABB( above 830), Crompton and Can Bank.

Market Outlook 15 04 2011

Markets shrugged of a weak opening as well as relatively negative global cues to zoom up sharply. The move that came as a pleasant surprise gained momentum as the day progressed. As mentioned in previous newsletter it was indeed Banks and IT heavyweights that led the sharp rally. L&T too was a big contributor as were Auto heavyweights like Hero Honda that gained over 7%. Nifty opened below 5750 but then crossed psychological and technical levels to finally close above 5900. It was highest recent close for Nifty as well as Bank Nifty. Both are now at the cusp of a breakout that could catapult both to sharply higher levels. Nifty faces some resistance immediately at around 5925-5940 and sustained trades above 5940 could open up potential targets of 6080 and 6220. Similarly Bank Nifty could move up strongly once it moves past 11900(cash) and 11960(Bank Nifty futures). Infosys kicks off Q4 results season on Friday and the kind of move we saw on Wednesday in Infosys as well as TCS suggests that results would be on the positive side.

Expected or better than results as well as guidance could further improve the overall sentiments. Infosys faces immediate resistance around 3325-3340 and beyond that we could potentially see target of around Rs 3480-3500. The other two heavyweights that are looking good are ICICI Bank and L&T. L&T was the surprise package on Wednesday and sustained trades above 1710-20 could take it to around Rs 1790-1800 and 1845-1860. Banking counters that are looking good are Indusind Bank, Yes Bank, IOB, Axis Bank( above 1460), Kotak ( above465) and Vijaya Bank( above 91). A word of caution though, as we are very close to the resistances it would be advisable to wait for the Nifty to settle above 5940 before initiating fresh long positions. Nifty now has support around 5860-65 and then around 5815-25.

Market Outlook 13 04 2011

The new week has begun on a negative note as Nifty slipped below 5800 on Monday. It’s a short
week as we have trading only for three sessions and that may have been the reason for lackluster performance on Monday. The volumes were also on the lower side. Crude continued to trend northwards while IIP data for Feb’2011 too failed to provide any positive surprises. Wednesday also might see a repeat of Monday as markets are again shut for trade on Thursday and on Friday trade opens just as Infosys kicks off Q-4 results season. So, we might continue to slide on account of profit taking. Nifty has support around 5750 but that might just be broken and we might see levels of around 5700. Most of the sectors are witnessing correction but one needs to watch out for IT and Banking sectors as these two could bottom out soon. TCS has support around 1045-50 while Infosys is trading just around its short term support.

Similarly ICICI bank has support around 1075-80 while Axis could find immediate support around 1370-85. Auto counters did see relatively sharp correction on Monday and this trend might continue. Here, early support is likely for Bajaj Auto and Hero Honda while some more correction is likely for 4-wheelers. Nifty has support around 5745-50 and then around 5685-5700 while resistance is likely around 5835-50.

Market Outlook 11 04 2011

Profit booking and winding up of positions saw the index slipping up in a slow and steady manner
throughout the day. The real damage came in the second half of the trading session when the key support level of 5870 of Nifty futures was broken. The weekend pressure and the truncated next trading week because of two trading holidays saw both investors and traders reducing the Exposure in the markets. Nifty now can slowly drop to its first strong support level of 5790-5800 and from there onwards the future course of action will be dictated by the first quarter results. Infosys comes out with its results on 15th and till then we are of the view that Nifty will be range bound between 5700 and 5900 with a slightly negative bias. Instead of buying and selling breakouts and breakdowns, one should make a strategy of buying supports and selling rallies. Lot of stock specific action will be seen as we now entering the quarterly results season. Since there will be a lot of volatility during this period we would very strongly advise to trade in lower volumes.

Nifty futures have strong support around 5808 and 5767 levels whereas it will face resistance at
5872 and 5899 levels.

Market Outlook 08 04 2011

Nothing much happened as far as Nifty movement was concerned as it traded around 5900 for most part of the session. It was almost a repeat of yesterday’s session as index heavyweights witnessed churning while momentum was concentrated within the non-index mid caps. Fertilizer stocks were in focus mid session as sudden burst of activity lifted most of these stocks. Chambal was up almost 9% on heavy volumes while others like NFCL, RCF and Tata Chem too gained significantly. The gainers list was almost completely made up of mid caps and included stocks like India Hotels, India Info, IVRCL Infra, Unitech, GMR Infra, ABG Ship, Tulip, Biocon, Hotel Leela, Triveni, Srei Infra, MLL, Aban and LITL. Cairn continued to lose ground as uncertainty hits its takeover by Vedanta. Sesa Goa too lost ground after gaining sharply over past 3 sessions. Some of the other losers for the day were Onmobile, NTPC, ONGC, OFSS, Bhushan Steel, TCS, Ultratech and APIL.

Overall, the undercurrent remained positive despite a minor negative tick in the frontline indices. Nifty continues to trade around 5900 and its been 4 sessions now that Nifty has remained in a tight range around 5900. We might see some movement either ways in a day or two as narrow range is most likely to be followed by expansion in this range. Dip below 5850 could mean a minor breakdown to around 5750-5770 while sustained trades past 5930-40 could mean a continuation of the uptrend to around 6050-6080. Meanwhile mid caps continue to make hay. GMR Infra broke out above Rs 42.50 and could be headed towards Rs 48-49. HPCL is showing positive technical pattern and could target Rs 385-390 over next few sessions. Tata Chem ( above 361) and HDFC could also seek higher levels. Sugar stocks are witnessing positive buildup and decent upside is likely in counters like Renuka, Balrampur and Baja Hind.

Nifty has support around 5840-50 and then around 5770 while fresh upside momentum is likely above 5935.

Market Outlook for 06 04 2011

Market encountered some profit taking at higher levels as Nifty saw intraday dip to around 5850. But, strong momentum helped indices to recover all its intraday losses as Nifty bounced back to close above 5900. The mid caps and small caps extended their rally by one more session. Banking heavyweights led the dip earlier in the day as stocks like HDFC Bank, Axis Bank and ICICI witnessed some selling pressure at higher levels. But, the mid cap banking names attracted strong trading interest as stocks like Vijaya bank, Andhra bank, Uco Bank, Dena
Bank, Syndicate Bank, IOB an Indian Bank moved up sharply on good volumes. In fact, the list of gainers was made up of mainly the mid cap counters. Onmobile extended its gains further as it surged almost 11%. Some other top gainers were Alok Ind, Patel Engg, Sesa Goa, Bajaj Hind, Moser Baer, Jindal SW Holding, Mundra Port and Tulip. HUL, M&M, DLF and Havells were amongst day’s top losers. Overall, the undercurrent was positive despite slight negative undertone in Nifty. Even Nifty did well to claw its way back above 5900.

There was some intraday hiccup in the ongoing up move as Nifty lost almost 50 points mid session. But strong buying in stocks like TCS, Tata Motors and metal heavyweights helped indices to erase all losses towards the close. Mid caps are beginning to join the party as traders get more confident about the upmove. Mid cap banks that look good for decent upside are Syndicate Bank, Indian Bank, Dena Bank, IOB and Allahabad Bank. JSW Steel has given a breakout on daily charts and is likely to arget Rs 1040-1050. Others that have positive patterns
are IVRCL Infra, PFC( above 254), L&T, Tata Motors and REC( above 261).

Nifty has support around 5830-40 and then around 5770 while some resistance is around 5950-65.

Market Outlook 01 04 2011

Markets celebrated India’s march to WC Finals by extending its amazing rally to eighth successive day. The trading session had its ups and downs as did the Semi Finals match against archrivals Pakistan. Nifty zoomed up by more than 80 points before giving up all its gains later in the day. But, short covering and some 31st March buying by institutions lifted the indices once again towards the close. Nifty ended the session as well as the March series of derivatives at 5833. Nifty gained 570 points in the March series, more than 10% rise. In the last 8 days itself Nifty has put on almost 500 points. Again, it was an all round show though IT heavyweights hogged the limelight. IT index was up 2% as strong rally was seen in TCS and Infosys. Banks witnessed some profit taking at higher levels as Bankex finished the day in negative territory. Some of the top gainers for the session were Adani, RPower, Hexaware, Cummins, HDIL, Reliance Infra, Welcorp, Polaris, Sobha, Apollo Tyres, DLF, Bajaj Auto, ITC, FT and Hero Honda. SBI led the list of losers by shedding more than 3% on heavy volumes.

Some other losers were Indusind Bank, Jet Airways, ABB, HCC, Yes Bank, Educomp, Onmobile, IOB, Ambuja Cement and IVRCL. It was an amazingly good series for the bulls as the sharp rally seen over past 8 sessions may not have been comprehended by even the staunchest bulls. Month of March that is notorious for its bearish undertones provided much needed relief to the eleaguered bulls as Nifty gained around 10%. Nifty is now trading above 5800 and the momentum indicators are now in overbought territory. Nifty has moved past the expected resistance zone of 5730-5770 and now this band should provide short term support to any decline. The rally has been extremely sharp and it would be difficult to take a call on resistances but now the immediate threat to the rally is placed around 5900. Banks have been the leaders thus far and today’s behavior of Banking heavyweights suggests some halt in the uptrend. We are entering a new series and new month and would need to take a fresh guard as far as trading is concerned. Some stocks that have seen fresh breakouts are RPower, HDIL, Hexaware, Hero Honda( above 1610), FT( above 890), Exide( above 143) and RIL( above 1055). Nifty is now trading above crucial levels of 5750-70 and this should provide strong short term support while resistance is seen around 5900.

Market Outlook for 30 03 2011

Bulls continued to have a great spell in the middle as Nifty gained for sixth consecutive session. Nifty was up almost 80 points mid session before some profit taking pared some of the intra day gains. Still, Nifty finished the day above 5700 at 5736. Bharti led the list of index gainers as it posted gains of around 3%. HDFC, ONGC, DLF and Sterlite were some of the other top contributors to index. Banks too had yet another good day at office as Axis Bank led the list of banking gainers. Some of the top gainers overall were Max, Mphasis, DCHL, Srei Infra, Neyvelli, RCom, Sesa Goa, Allahabad Bank, Onmobile, IVRCL, Bata, BPCL, Maruti, DrReddy and Yes bank. Tech Mahindra encountered some late selling as the stock plummeted over 4.5%. Some others on the losing list were Moser Baer, Sterlite Tech, HOEC, IFCI, Welcorp, Tata Global and Ruchi Soya.

Nifty continued its dream run as it now trades within the zone that could provide some stiff resistance. HDFC faces some resistance around 690 and sustained trades above 690 could mean a strong breakout that could open up potential targets of around Rs 740-750. DLF is also on the verge of breakout and sustained trades above 255 could potentially take it to around 280-282. Some other stocks that have positive patterns are Sesa Goa( above 285), OnMobile, Crompton( above 275), Indian Bank, BOI, JSPL and JSW Steel( above 926).

Nifty is now trading within the resistance band at 5740-5775 while support is seen around 5650-65 and then 5610-20.

Market Outlook for 29 03 2011

The week began on a happy note as markets had a steady day. In fact, Sensex as well as Nifty briefly went past the psychological level of 19000 and 5700 respectively. Autos, Capital Goods and Banks had a good day while some profit taking was seen in Healthcare, Metals and IT stocks. Index heavyweights that helped the indices move higher were Bharti, L&T, IDFC, Tata Motors and HUL. LIC Hsg however hogged the limelight by posting intraday gain of around 8% amidst huge volumes. Some other prominent gainers were Sterlite Tech, GT Offshore, Noida Toll, IDBI, LITL, IVRCL, TVS Motors, IRB, Dena Bank, Vijaya Bank, Sintex, Godrej Ind and Federal Bank. Auribindo Pharma was the biggest loser as it shed more than 6%. Some others that lost were Pantaloon, Piramal Health, Sun Pharma, Core, Jain Irrigations, Suzlon, Unitech and GMDC.

It was fifth successive day of gains for markets as Nifty moved towards 5700. In fact, Nifty has gained around 350 points over last 5 sessions. There could be a brief consolidation/resistance as market grapples with twin psychological resistances of 200DMA as well 5700/19000. 5735-5770 could provide stiff resistance to the uptrend and one need to be careful around these levels as far as long positions in Nifty are concerned. Stock- specific moves could hog the limelight even as indices consolidate/correct. The mid cap banking counters could see action as technically some of these like Andhra Bank, Federal, OBC, Uco and Dena Bank are looking positive. IFCI has given a breakout above 55 and could target Rs 61-62 if it sustains above 55. Auto stocks like Bajaj Auto, TVS, Ecsorts are also showing positive intent. LIC hsg closed at almost 4 months’ high and sustained trades above 215 could take it to around Rs 240-245.

Nifty faces stiff resistance around 5730-5750 while support is seen around 5620-30 and then around 5545- 60.

Market Outlook FOR 28 03 2011

Markets opened with a huge positive gap primarily on account of positive global cues and the best past of Friday’s trading was that bulls maintained a firm grip on the whole day’s proceedings and managed to closed on a very strong note. Stock markets mimicked Indian cricket team's all round performance as bulls went on rampage sending stocks across sectors rallying. Heavyweight stocks like Infosys, ICICI Bank and Reliance Industries anchored the BSE Sensex and the S&P CNX Nifty to two-month closing highs. The market breadth was strong. All the sectoral indices on BSE logged gains. Auto stocks were in demand on renewed buying. Banking stocks extended recent gains after the government tabled banking sector amendment bill in parliament. Metals stocks extended Thursday's gain on hopes of higher demand as Japan begins redevelopment after a devastating earthquake and tsunami on 11 March 2011. Software stocks were in demand on encouraging US tech earnings overnight. Fertiliser shares edged higher on reports of higher demand for fertilizer in the upcoming monsoon season.

Nifty will now have to cross the crucial resistance of 200 DMA of Spot Nifty which lies at 5688. There could be a small pause at this level which is just 30 odd points from the current level. We would advise investors and traders to watch this crucial level closely as one can expect short term reaction from this level.

However, any short term correction should be used as a buying opportunity The immediate resistance for Nifty future lies at 5725 and 5765 levels whereas it has short term supports at
5645 and 5610 levels.

Market Outlook 25 03 2011

It was a steady day at the bourses as Nifty traded above 5500 for majority of the session. Decent showing was seen in almost all sectors with Realty and banking leading the way. Unitech was up almost 10% on very good volumes. Many mid caps again hogged the limelight. There was strong buying in stocks like Videocon, Orbit, IBReal, Sobha and Dish TV. Auto and metals also witnessed value buying at lower levels. Ashok Leyland, Hindalco, Welcorp and TVS Motors were the major gainers from these two sectors. Some other prominent gainers were Aban, Karnataka Bank, Pantaloon, IDFC, ABB, Tech mahindra, REC, GVK, Kotak and Yes bank. Some of the yesterday’s gainers met with profit taking and shed some weight. The list includes Tata Com, Lupin, Havells, GAIL and Renuka sugars.
Nifty gained for the third consecutive day which is a rare occurrence in the present volatile scenario. But, that also means that Nifty is now staring at strong resistance zone of around 5540-50. Nifty has not managed a close above 5540 in current month despite few attempts. Nifty has seen base building over last two months and as we did mentioned earlier also, close above 5540 and then a decent follow up could open up 150-200 points upside. Again, banks are the key and Bank Nifty is on the verge of a sharp and strong breakout above 11200. Realty counters are showing interesting patterns and stocks like Sobha, HDIL, Orbit, IB Real and Unitech could see substantial upside once they manage to sustain current levels. Dish TV closed above Rs 64 and could target Rs 71-72 over next few sessions. Ambuja Cement managed to close above 133-135 resistance zone after a gap of about 10 weeks and likely to target 146-149. Banks that have bullish patterns are Kotak, Indusind and Yes Bank.
Nifty now has support around 5460-70 and then around 5420 while strong momentum is likely once Nifty sustains above 5550-65.

Market Outlook for 24 03 2011

Markets opened with a slight negative bias in line with the other Asian markets but gained momentum as the day progressed. Early in the session Nifty moved above 5425 and remained above that for the remaining part of the session. It was a combined strength of many heavyweights that propelled Nifty to higher levels. So, we had positive momentum in RIL, Bharti, SBI, ICICI Bank, IDFC and Bhel that sustained throughout the session. Bank Nifty gained around 1.7% and even the Realty counters had a positive day. But the main activity was confined to some mid cap stocks like HOEC, DCHL, Tata Comm and BGR Energy. Some other prominent gainers were IB Real, Pantaloon, MLL, Sesa Goa, Cipla,Hexaware, Indusind Bank, Havells, JP Associates, PFC, Orchid and REC. Few stocks did witness some selling and prominent amongst these were Escorts, TV18, NCC, ZEE, Jet Airways, HPCL and Neyvelli. Volumes were better particularly in the top gaining counters. As suggested yesterday Nifty did move up steadily once it was above the immediate resistance at 5425 and closed almost at the highest point of the day. This suggests that the 5350-75 support has held for now and we are once again in the sideways range between 5375 and 5570. Bank Nifty has once again led the way and it is approaching breakout level of 11200 again. Bank Nifty has seen strong base building/consolidation for past 10 weeks now and a sustained breakout beyond 11200 could mean another 10-12% up move. ICICI bank closed just around 1040 and followup buying could see it move to around 1075-1080. Indusind Bank is looking good and seem to have formed a decent base. Stock could be headed towards 275-280. BGR energy is another counter that is showing positive intent and has once again moved past 465. Stock could target Rs 510 if it manages to stay above 450. Gail, Petronet and DLF are also looking good for decent gains over next 5-7 trading sessions. Nifty would find decent support around 5415-25 now and then around 5375while 5530-5550 should provide resistance as of now.

Market Outlook for 18 03 2011

Markets opened in the negative territory primarily on account of negative global cues but still managed to show the resilience as the cuts were not deep. Political uncertainity because of the Wikileaks and concerns on rising interest rate environment because of rate hikes of 25 bps both on Repo and Reverse Repo saw some unwinding of positions. Banking majors like SBI, ICICI and Axis Bank saw their share prices drifting lower in a slow manner throughout the day. Other important stocks like Infosys, Maruti, Tata Motors and Dr Reddy also were on the top of losers category. Reliance ADAG group stocks like Reliance Capital and Reliance Infra saw some buying from interested quarters and were marginally up by apprx 2% each. Other stocks like BHEL, Titan and Asian Paints were the gainers primarily because of fund buying.

We are of the clear view that markets here in India have shown strong resilience in spite of several problems both on the domestic front and global arena and hence the bias is clearly on the long side. One should attempt to buy dips and once the Nifty moves past 5550, we could see an easy 100-125 points upmove till 5670 where the 200 DMA lies. Select midcap stocks like VIP Industries, Asian Paints, Tata Elxsi, TTK Prestige, Talwalkars and BF Utilities where fund interest is high could see some decent rise in the coming days because of NAV propping as the financial year end approaches.

Nifty has strong support around 5448 and 5400 levels whereas resistance lies at 5499 and 5525 levels. Trade with a positive bias and buy on dips as long as 5400 level of Nifty is held.

Market Outlook 16 03 2011

Indian market was an island of relative calm amidst crumbling global indices. Taken in isolation one would be tempted to believe that market collapsed as it opened almost 150 points lower and closed almost 1.5% lower. But, if one just looks around the globe it would appear that Indian markets held up nicely even as the other Asian markets lost around 4%. Japanese market was down over 12% as life came to a standstill on growing concerns about nuclear radiation spread. Even the European markets were trading lower and DAX was down almost 5%. RIL led the rebound again as Nifty rallied more than 100 points from the opening levels. Some profit taking and selling in the last 60 minutes pared almost half of the intraday gains as Nifty closed at 5450. RIL witnessed heavy volumes and was up almost 2.5% before finishing the day almost 1.9% higher at 1038. Tyre stocks were also in demand as rubber prices continued to dip. Apollo Tyres, MRF, JL Tyres and Ceat were up significantly on good volumes. Reliance Capital too managed to shrug off early morning blues and closed in the positive. Breadth was negative while volumes picked up as the day progressed. Nifty managed to close around 5450 despite global turbulence and has shown significant resilience over past couple of sessions. But, things may change if the global negative sentiments persist. Technically, Nifty was able to sustain above the intraday support zone of 5350-5370. Even on closing basis the supports were maintained. RIL continues to provide strong support and it’s good to see the stock building on momentum rather than struggle around resistance zones. The volumes are also good and it seems stock could be headed higher. Bhushan Steel is showing strength and is looking good for another 8-10% rise over next few sessions. But, The Auto and metal counters are not looking positive and may be headed lower. Bajaj Auto seems to be an exception and one could buy it on dips. Nifty has immediate support around 5415-20 while critical support lies at 5350-5375.