Market Outlook FOR 04 02 2011

Finally, we witnessed a rally that was able to sustain for a whole session. Nifty opened on a slightly positive note and kept on building momentum as the day progressed. It was a mix of buying in some stronger counters like Hindalco and short covering in highly oversold counters like DLF and others. Heavyweights like SBI, L&T, RIL and Tata Motors witnessed some interest at lower levels and for a change this interest persisted for the whole day. Bharti was the biggest gainer amongst the index heavyweights as it gained over 5%. Some of the other big gainers were Polaris, DLF, HDIL, JP Associates, Syndicate bank, Renuka, REC, Bata, IVRCL Infra, Hindalco, Sintex, HCC, Adani and Exide. But , there were a few that remained on the selling list. The list includes Sobha, Cummins, Voltas, OFSS, Ashok Leyland, IOC and HCL Tech. Nifty managed to close above 5500.
Nifty faces immediate resistance at around 5540-50 but as stated earlier also we believe that the rebound has some more legs to it and Nifty could inch up towards 5650-5680. The efforts to break below 5400 have been unsuccessful despite strong negative sentiments. It seems that combination of short covering and value buying could sustain Nifty and should it take it higher. Even the weaker stocks/ sectors like realty and infra could also move higher on short covering. The stronger stocks are Hindalco, Bharti, Sterlite, TCS and Tata Steel. Banks have seen consolidation for past 7-10 sessions and could now move higher. The better looking charts in the short term are SBI, ICICI, Syndicate bank, Indusind Bank and Union bank. Bank Nifty might move above 11000 in coming sessions. Hindalco has given a break out above 240 and one can accumulate it for next technical target of around Rs 265.

Nifty has immediate support around 5465-70 while above 5550 it could move to around 5620-30.

Nifty Chart

• Nifty started the day with a flat opening and gained momentum after first hour of trading breaking the resistance of 5480 and 5520 and finally closed at 5526.
• The short term down trend for the market would reverse and traders can initiate long positions with 5380 as stop on closing basis.
• Today market is expected to trade in the range of 5380– 5620.
• Wait for any fresh trade in nifty.

Todays Sentence

Patience is important not only in waiting for the right trades, but also in staying with the
trades that are working. The failure to adequately profit from correct trades is a key profitlimiting factor. – Jack Schwager

Stock To Trade

• TV-18 :- NR7 bar pattern in TV-18. Buy above 77.50, Sell below 75.50.
• Cipla :- TA Turtle downside breakout in Cipla 30 min chart. Sell with stop loss above 330.
• Cairn :- Oversold Ta Insync in Cairn. Buy with stop loss below 327.

Nifty shows strong support

Nifty Watch:- Today nifty open gap up at 5470 with a gain of 47 points, And remain in a range between 5450-5510, finally in the last trading hour Nifty faces a decline of 80 points and closed at 5429, very near to last day close.

Trend:- Today’s market shows an intermediate downtrend. Forming pattern of lower highs - lower lows and also market is trading below its 200 days and 50 days moving average.

TA Insync is now oversold. Thus we can expect a relief rally soon enough.

Level:- Looking for support first at 5380 and then at 5350. The resistance comes at 5510.
Summary:- Today’s market shows some bullishness at its start but at the end it closed near to previous day closed.