All Round Gains As Nifty Touches 6100

Nifty regained 6100 as the December series saw a gain of exactly 300 points. It was a day of all round gains as almost all the sectoral indices closed in the green. Metals and IT continued the gaining spree and were amongst the top gainers for the day. Infosys moved to new highs as did Hindalco. Some of the banks too witnessed some short covering and were amongst the day gainers. But, overall, sector was subdued as Bankex saw only marginal gains. Mid cap derivative counters were the real heroes of the day as stocks like Ruchi, Praj, Aban, Hexaware and HOEC emerged as the top gainers. Some of the other names on the list were Suzlon, IBReal, GMDC, Chambal, GT Offshore, Indusind, Uniphos, Pantaloon, Alok, Bajaj Hind,  OnMobile and IOB. The OMCs were amongst the top losers as EGOM meet on diesel hike was put off. Some others to end in the red were Idea, ABB, Polaris, Tulip, Jindal Holding, India Cement, Syndicate Bank and Crompton.

Nifty continued its northward journey as it added another 40 points to move past 6100. It might see some resistance during the day tomorrow as we move into the first series for 2011. 6120- 30 could provide some resistance to the upmove and we might see a bit of consolidation again between 6000 and 6100. Banking and Realty did not see any substantial shortcovering even on the last day and remain a near term worry for the indices. We believe that IT, Metals and Capital Goods could see outperformance in the next series. CG heavyweights like Bhel, L&T and Siemens are witnessing some positive buildup technically and could be accumulated on bad days for decent returns in January. Sterlite is reaching the upper side of the range at 190-192 and might see some correction/consolidation. Tata Steel, Hindalco and JSW Steel could see positive moves in the short term. Sugar and fertilizer stocks could also witness upmoves over next 3-5 sessions. Chambal, Renuka and B.Chini are particularly looking good.

Nifty has support around 6040-50 and then around 5980 while watch out for resistance around 6120-30.

Bouyant Nifty Crosses 6000

Nifty opened on a positive note and remained positive throughout the day. Short covering in banking heavyweights and some auto stocks helped Nifty to push for higher levels. HDFC, HDFC bank, ICICI and SBI moved higher and then there was some buying in FMCG heavyweights like HUL and ITC that further provided strength to Nifty. Metal and Bharti too helped with decent gains. Some of the prominent gainers were Ruchi Soya, Hind Zinc, HCC, MLL, Indian Info, Aban, REC, HUL, Bharti, Sterlite, Srei Infra, HDFC, HDFC Bank, Allahabad Bank and Opto circuits. PFC was the biggest loser while some other losers were Moser Baer, HDIL, Havells, Cipla, Sobha and Welcorp. Nifty finally settled at the highest point of the day at 6060.

Yesterday only we spoke about a breakout/breakdown and we were obliged by the markets instantly. Nifty kept on pushing for higher levels throughout the day as it broke past 6030. Short covering helped the momentum and it seems we have a decent breakout above 6030. Nifty may continue to move up sluggishly as there would still be various resistances ahead.  We have a target of around 6180-6220 for this breakout that might take about 7-10 sessions. Support moves to around 5980 now. REC seems to have bottomed out though it might consolidate between 280 and 300. One can keep a stop below Rs270. Bharti could move to around Rs 370-375. HDFC, Bhushan, Union Bank and Hindalco are also looking positive.

Nifty has support around 6015-20 and then around 5970-80 while resistance is likely around 6120 and then 6170-80.

A Dull Day For Markets

It was an eventless, dull day of trade as Nifty traded in an extremely narrow band of about 30 points. It was a balancing act as far as Nifty was concerned as for just about every weak stock/sector there was almost an equally strong stock/sector. So we had weakness in Autos, Banks, Capital Goods while strength was seen in
FMCG, Healthcare, IT and metals. But, there were no runaway gainers or losers as stocks too traded without much of a direction. Some mid caps did see some action and volumes and that could be attributed to year end re-jig in portfolios’. Hind Oil and Moser Baer notched up significant gains on above average volumes while Praj attracted huge volumes for second successive day. Some other mid cap gainers were KS Oils, Hexaware, Noida Toll and KFA. Ranbaxy was the biggest index gainer while Tata Motors was the biggest loser. Some other significant losers were Patni, Indian Bank, Tulip, Uco Bank, Axis Bank, Mundra, OBC and BOI. Nifty ended the day almost unchanged at just below 6000.

Nothing much changed technically as it was yet another narrow range day. Still, we have supports around 5940-50 while resistance is at around 6030-45. Volatility has shrunk over past 10-12 sessions as Nifty continues to trade in a listless manner. But, this also suggests that we are witnessing the proverbial lull before the storm and Nifty could see a breakout either way. All long positions must have a Nifty stop loss at below
5930 while Shorts must keep a stop above 6070. Expansion in range with increased volatility is likely soon and may happen over next 3-4 sessions. As of now, Autos and Banks continue to show weakness while IT, Metals and selective pharma counters remain strong. Weakness is likely to persist in mid caps banking stocks in particular.

Nifty has support around 5950-60 and then around 5885-5890 while resistance is likely around 6030 and then 6080.

Negative Global Cues Keep Nifty Down

Markets opened on a flat note but then struggled to stay in the positive territory as the global cues turned negative. Shanghai was down around 2% and then European markets opened with more than 1% cut. All this impacted our markets as Nifty slipped below 6000 while Sensex just about managed to stay above 20000. Metals turned negative on Chinese cues and Sail saw the biggest cut. It lost over 4% while Tata Steel, Sterlite and JSW Steel.too ended on a negative note. Sesa Goa , however closed in the green. Banks too were in negative mode and apart from ICICI Bank, most others ended the day in the red. Some of the biggest losers were Patel Engg, Indian Info, SAIL, RMedia, IDEA, RCom, REC, Sterlite, Pantaloon, IBReal and welcorp. Praj was the surprise gainer of the day as it gained a whopping 10% on extremely heavy volumes. Some others on the gainer list were Dish TV, BGR, Bombay Dyeing, B.Chini, Bata, Ambuja and Mphasis.

Nifty closed below 6000 after testing high of 6045. Global cues have turned negative and add to the fact that we have December expiry. It seems that expiry is likely just around 5950-6000. It could be stock specific market for next 3-4 days and its likely that some mid caps could see decent run up. Some short covering is likely in stocks like Bajaj Auto, ITC, ACC, HDFC, HDFC bank and ICICI bank. Praj has seen such huge volumes after a very long time and followup buying over next 1-2 days that takes the stock above 85 could be medium term positive for the stock. Then, one can expect a rise to around Rs 110-115 over next 3-4 weeks. Bombay Dyeing could move to around Rs 530-535 if it remains above 505.

Nifty has support around 5950-60 and then around 5885-5890 while resistance is likely around 6030 and then 6080.

NIFTY - Banking Holds The Key

It was an extremely dull and boring trading session as Nifty traded in a very narrow range. In fact, the intra day range for Nifty was only 40 points, narrowest over last 5-6 weeks. Needless to say most of the heavyweights were range bound. Steel stocks were under profit taking pressure with JSW steel losing the most. Tata Steel too lost some ground as did Sail. Infosys held the index as it made a new high. Sugar stocks staged a late rally and were amongst the top gainers for the day. Some of the prominent gainers were Sintex, Sun Pharma, FSL, ABB, Polaris, Divis Lab, OBC and Triveni. Some of the losers were Mundraport, Ashok Ley, IRB, REC, APIL, IBReal, Escorts, HPCL and Andhra bank. Nifty finally closed almost around the
previous close.

Nothing significant happened to materially change the technical picture. Still, we have levels of 5940-50 on the downside and 6020-30 on the upside. Banking remains a joker in the pack and can tilt the balance conclusively either way. Metals and IT remain the sectors with upside momentum while Realty is clearly showing downside momentum. Autos are also not showing any strength and only Tata Motors retains the positive bias. Sugar stocks are showing positive bias and an upside till 88-89 is seen in balrampur Chini. Mid cap IT is also looking good. Hexaware may see upside till 114-116 while Polaris could move to around Rs 188-190.

Nifty has now immediate support around 5935-45 and then around 5880 while resistance is likely at 6030 and then around 6070-80.

NIFTY at 6000

Nifty opened and traded above 6000 during the early part of session. But again higher levels attracted profit taking as Nifty failed to make any significant progress beyond 6020. Profit taking gained momentum towards the later half as stocks like RIL, Tata Steel and some banking heavyweights pushed Nifty towards 5950. Some metal and auto stocks recovered towards end to pare Nifty losses to only about 16 points. Banking stocks failed to build on yesterday’s momentum as HDFC Bank, SBI and other banks attracted selling at higher levels. Some of the prominent losers for the day were Sintex, Hexaware, Onmobile, Auro Pharma, Bajaj Hind, Patni, EKC, Maruti, Reliance Infra, Bharat Forge and Wipro. Ispat however attracted buying and emerged as the biggest gainer amongst the F&O counters. Bhart was significant index gainer. Some other gainers were Syndicate Bank, Patel Engg, LIC Hsg, Yes Bank, Vijaya Bank, Core Projects, IFCI and Ranbaxy.

Nifty is at crucial levels as it trades around 6000. Despite today’s hiccup Nifty remains in an uptrend and we believe that it is likely to move higher after a brief consolidation. The immediate support is around 5930-40 while stronger and significant support levels are 5870- 80. Banks could play a significant role in deciding how far Nifty moves as short covering in banking heavyweights might create strong momentum for Nifty. On the other hand, if the short covering fails to materialize in next couple of sessions, it might force longs liquidation and that could put pressure on indices. Clear uptrend is still seen in some Auto counters, metals and  IT heavyweights. As mentioned yesterday clear breakout above 11700 in bank nifty would be critical for Nifty’s momentum. Bharti, Yes bank, Indusind Bank, Hindalco, Cipla and JSPL are looking positive.

Nifty has now immediate support around 5935-45 and then around 5880 while resistance is likely at 6030 and then around 6070-80.

Metals Push Nifty Towards 6000

It was a steady day at the markets as Nifty edged higher to 6000 while Sensex moved past 20k. Most sectors were in positive mode with even Bank Nifty gaining more than 2%. Metals were in fine form yet again as stocks like Tata Steel, Sterlite, Hind Zinc, Hindalco and Sesa Goa posted decent gains. Ispat was bagged by JSW Steel but the stock lost around 15% as the buy price at Rs 19.85 per share was much lower than the market’s anticipation. However, JSW Steel stock gained around 2%. Banking stocks witnessed some buying at lower levels as most of the banking heavyweights edged higher. ICICI led the sector with almost 3.5% rise on improved volumes. Some other prominent banking gainers were Axis, Yes Bank, Bank of India and IDBI. IDBI and IFCI were also helped by the Ispat-JSW Steel news as both are amongst the significant lenders to Ispat. IT heavyweights were mixed as while TCS and Infy witnessed some profit taking, Wipro edged higher. Mid cap IT stocks were in demand and significant gains were seen in Mphasis, Tech Mahindra, Patni, FSL and 3i Infotech.

Nifty closed at 6000 and is looking good to test 6050-6070 in coming sessions. Banks are volatile but seem to be finding some buying around current levels, atleast the better banks. Bank Nifty has found some support around 11150-200 while immediate resistance is at around 11675-750. Sustained trades beyond 11750 could result in short covering that might result in sharp rise to around 12200-300. ICICI Bank seems to be leading this time around and above 1120 it remains in positive mode. Stock could target Rs 1175-85. IDBI is also showing positive bias and is likely to target Rs 172-73. Tata Steel and Hindalco continue to lead the metals pack and now even stocks like Sterlite and JSPL are looking good. Some other stocks that look good are NMDC( above 267), Sesa Goa( above 306), IRB Infra( above 227), Exide( above 165) and Hexaware.

Nifty has now immediate support around 5935-45 and then around 5880 while resistance is likely at 6030 and then around 6070-80.

A Roller Coaster Day For Nifty

Fresh week opened on a volatile note as contrasting cues came out from Asian and Eurpoean markets. The negative Asian cues mainly from China ensured a negative gap opening for our markets as Nifty struggled around 5900. But stable to positive European markets once again energized the bulls as Nifty gained over 80 points from its intraday low. Profit taking and position unwinding in the last 30 minutes shaved off all the intraday gains as Nifty closed almost unchanged. Hero Honda was the real hero as it gained around 18% on huge volumes. The under performance owing to Hero-Honda split was a thing of past in only one session as brokerages came out with encouraging reports post management discussion. Ispat was another stock in news that gained around 10%, again on good volumes. JSW Steel was rumored to be the front runner to take management control at Ispat. Broadly, Steel stocks as well as the IT stocks continued to be in positive mode while Banking failed to see any stability even at current levels. In fact, banking heavyweights were largely responsible for Nifty giving up all its gains in the last 30 minutes. Bank Nifty was down over 1.5%. Some of the gainers of the day were IFCI, Rolta, KFA, Renuka, Maruti, Cipla, Hexaware, Colpal, FSL and Asian Paints. On the lsers list were Uniphos, Max, DrReddy, IBReal, S.Kumar’s, Indusind, IOC, Axis Bank, India Info and Sterlite. Volumes were on the lower side.

Nifty saw a rebound from 5900 but again failed to close above 5950, though it did make an intraday high at 5985. Higher levels are attracting some residual selling especially in banking counters. IT heavyweights have seen sustained rise over past few sessions but might see some profit taking/consolidation around current levels. On the other hand, the mid cap IT stocks like Mphasis, Polaris, Hexaware and Onmobile are looking good and could seek higher levels. Cipla may have completed its corrective move and is likely to move to around Rs 385- 390 over next few sessions. Petronet, IFCI and GSPL could also seek higher levels. 

Nifty has support around 5880-85 and then around 5825-35 while some resistance is likely around 6020-30.

A Positive Week For Nifty

It was a relatively better week for the markets as Nifty managed to gain around 2%. The sentiments remained brittle and the threat of breakdown loomed throughout the week but IT and metal stocks helped indices to stay in the positive territory. BSE IT index was the biggest gainer as it gained over 5% and moved to new all time high. Both Infosys and TCS also hit new highs were the major gainers of the week. Metals also did well with Tata Steel and Sail gaining over 6%. Banks however remained under pressure as most banking counters posted weekly losses. Auto also came under pressure as Tata Motors was the only Auto major to post decent weekly gains. Mid caps saw some value buying in the later part of the week. RBI left all its policy rates unchanged but did infuse some liquidity in the system by lowering SLR. Inflation remains a threat and RBI might be forced to take a hawkish stance in next policy meet.

Nifty oscillated between 5850 and 5950 in the last two sessions and good news is that 5850 has emerged as a decent short term support. Nifty closed just around 5950 on Thursday and follow up in momentum on Monday could mean that Nifty gives a minor breakout. Sustained trades above 5960 could open up targets of 6070-6080 over next week. Couple of successive closes above 6025 would be technically significant as that would suggest that the correction has indeed ended and market might make another attempt at taking out all time high. The behavior of past two weeks also suggests that it would be different sectors that would lead Nifty to 6300- 6350 again. Oil&Gas, IT and Metals are showing clear leadership capabilities with Infosys, TCS, Tata Steel and RIL beginning to see some momentum. Bank index has strong support around 10850-11000(current value 11424) and may stabilize around current levels but could continue to be volatile. Investors with atleast 6-9 months perspective might look at accumulating stronger banking counters like BOB, Indusind Bank, IDBI, Central Bank, ICICI bank, Federal Bank, KTK Bank and Yes Bank. This is for patient investors and don’t expect instant gratification. Trading momentum is seen in Tisco, TCS, Wipro, Mphasis, Polaris, Ispat, Auro pharma, Bharti, SKumars, Chambal, Tata Chem, Petronet, IGL, GSPL, Hexaware and Renuka.

Nifty has support around 5865-70 and then around 5825-35 while fresh move is likely above 5960.

Banking Stocks Hold Nifty Down

The 3 day rally was interrupted as Nifty failed to move past 5950. The global cues were also not helpful as most of the Asian as well as European markets were flat or negative. Banking led the decline as after a weak-ish rebound of past 3 days almost all banking stocks resumed their southward journey. SBI slipped below 2700 while other major banking losers were Uco Bank, Dena Bank, Indusind Bank, Can bank, Allahabad Bank and Indian bank. Heavyweights like RIL, Bharti, Tata Steel and IT majors did try to positively influence the indices but failed to provide enough momentum. OMCs also bounced back but were unable to hold on to all intraday gains. Some of the prominent gainers were KS Oils, Patni, IGL, HPCL, BPCL, PTC, Ispat, TCS, Dabur and Apollo tyres. Losers included KFA, Hero Honda, DLF, IB Real, SCI, IFCI, Jet, Titan, Escorts, HDIL, SKumars and Punj Lloyd. The new listing MOIL opened on a strong note but found sustained selling pressure throughout the session and gave up more than Rs100 from its intraday peak. Overall breadth was negative.

Nifty failed to move past 5940-50 and slipped below 5900. It was a typical 3 day rebound formation followed by continuation of downtrend again. This pattern was more prominent in almost all banking counters that continue to show momentum on the downside. 5945-5960 now becomes an important resistance to tackle and a sustained move past this zone would be needed to create some upside momentum. Nifty found support just around 5870 but might slip to around 5820-30. IT heavyweights have emerged as the safe bets in current controversial scenario and are providing some support to the indices. Both TCS and Infosys have bullish patterns and could see more upside in coming sessions though it may not be a one-sided kind of move. IT heavyweights alongwith Tata Steel, RIL, Bhel, L&T and Bharti remain buy on dips candidates while banks and financials alongwith Realty counters should be avoided as of now for buying purposes.

Nifty has support around 5865-70 and then around 5825-35 while fresh move is likely above 5950.

European Markets Help Nifty Cross 5900

It was a volatile opening to the week as Nifty fluctuated in and out of positive territory. After a positive open to the trade Nifty suddenly lost significant ground as Nifty slipped below 5800. Positive open at European markets not only help recover ground but also to move up sharply in the positive zone. Finally, Nifty closed above 5900 up almost 50 points. Recovery was led by RIL as stock moved to around 3 weeks high at 1046. Banking looked weak for most part of the session but recovered significant ground towards last one hour. Capital goods were also in demand as stocks like Bhel, Siemens and later L&T found buying at lower levels. Some of the prominent gainers were SKumars, KS Oil, Hexaware, JSW Steel, Pantaloon, IRB, Ruchi Soya, IBReal, Jindal Holding, Petronet, APIL and Welcorp. Cement turned a bit weak after sharp Friday surge while some other stocks to lose ground were Uniphos, ALL, ITC, Rolta, M&M and HPCL.  

Nifty sustained above 5800 and later found enough muscle to move past 5900. Last week Nifty made a panic low at 5720 that was higher then the previous panic low of 5690. The late surge took Nifty past 5880-90 that was looking like a significant resistance. Broadly, sustained trades above 5930-40 would suggest that we have formed a decent bottom at around 5700. Nifty is likely to challenge the recent swing high of around 6070 if the resistance at 5930-40 is successfully negotiated. RIL seems to be taking the lead while the leaders of the previous rally banking and Autos are either correcting or consolidating. Bhel, APIL, Siemens and L&T are also showing positive bias and it suggests that Capital Goods could also take the lead whenever the next upmove begins. Tata Steel and Bharti are the other two heavyweights that are likely to lend support to any upmove. The above mentioned names are the ones that could be accumulated on bad days for decent returns over next 4-6 weeks. The battered mid caps are also showing early signs of recovery but short term trades should be avoided in mid caps and only good quality mid caps be accumulated with 3-6 months investment horizon in mind. 

Nifty has support around 5825-35 and significant one around 5740-50 while fresh momentum is likely above 5940.

Markets Heave A Sigh Of Relief

Markets heaved a sigh of relief as institutional support came for important stocks like ACC, Axis Bank, ICICI Bank, SBI and BHEL in Friday’s trading. IIP numbers which surprised the market also helped to boost the sentiment of the market. Key benchmark indices surged on the last day of the week as investors sought bargains after recent steep slide. Market breadth was strong in contrast with a weak breadth in early trade as many small and mid-cap stocks recovered after suffering steep fall in the past few sessions. ACC counter witnessed big block deals and as a result the stock gained by Rs.75 to close higher at Rs.1075. Movements on Nifty still continued to be volatile.

It is a bit early to conclude that the worst is over and one needs to assess the market closely in the coming days to get more clarity about the short term direction. However, the fact that bigger investors have started purchasing frontline stocks like OBC, Reliance, ACC and BHEL in a small way does gives hope that we are very close to the end of the process of bottom formation. Banking stocks like Axis Bank, OBC, Indian Bank chart structure in the lower time frame chart have started showing some signs of promise in the short term of a small upmove. Midcap and smallcap stocks still would need some more time to move up since recovery would initially will be restricted to frontline stocks. Hence, sticking to frontline stocks would be a prudent strategy in the current circumstances.

Nifty futures has strong support around 5850 and 5825 levels whereas it will face resistance around 5898 and 5930 levels.

Broadbased Selling Dominates Markets

Markets were in an extremely jittery mode as there was a broadbased selling across all sectors and stocks. The only saving grace was seen in stocks like Infosys, Wipro, ITC and Oriental Bank of Commerce which closed in the green. The damage in the midcap and smallcap stocks was the most painful for investors as rumours of a large number of company promoters being involved in rigging of stocks alongwith shady operators was doing the rounds of Dalal Street, We are of the view that very soon SEBI will come out and clarify the companies and promoters which are involved so that rumour mongering stops and investors have clarity about the companies which are in their portfolio.

Nifty can fall to its previous swing low of 5690 and we feel that it might find support around the range of 5650-5725 levels. We very strongly advise not to bottompick stocks and stay away from the market till some sense of stability comes back. Bottoming out is a process and not an event and hence one should have the patience for the market to complete this process. Till then, it would be wise to stay on the sidelines.

Support for Nifty lies around 5725/5690 and 5650 whereas resistance lies around 5790 and 5825-5840 levels.

Nifty Succumbs To Nervous Sentiments

Markets succumbed to the nervous sentiments as Nifty slipped below 5900 during the session. Nervousness was aided by the reports that IB has submitted reports of price rigging in few companies. So, there was sharp sell-off seen in some of these scrips like KS Oils, IRB Infra and Ruchi Soya. Mid and small caps were hurt the most as stocks plummeted due to lack of buying rather than any other particular reason. Amongst the large caps, banking remained under pressure and list of prominent losers was crowded with many banking names. Bank Nifty shed another 2% as it closed almost on a 3 months low. OMCs were up on reports that petrol prices might be raised as Crude moved above $90. There were some other gainers like Hexaware, Ranbaxy and ACC but overall the sentiments were extremely negative and there were much more losers than gainers. Some of the major losers were Ruchi Soya, KS Oils, Renuka, IRB, KFA, ABG Ship, Al bank, Union bank, Jain Irrigations, Orchid, Axis, Bajaj Hind and BGR Energy.

Nifty failed to sustain above 5940 but found some intraday support around 5880. But, the short term trend again has shifted into negative and would remain so as long as we trade below 5950. On the downside, levels of 5835-45 and then 5770 are possible. Banks are not showing any signs yet of bottoming out and could continue to bother indices in coming days. IT and metals to lesser extent are showing some signs of stability. Short term sentiments are being affected by all kind probes be it market related (Mkt operators, price rigging) or Government agencies related (2G Scam etc). It would be advisable to stay away till some sanity and stability returns. Few stocks that have been hammered because of short term events but hold investment values could be bought in small quantities with medium to long term investment horizon. (9-12 months). Some names that could be considered are IRB Infra, Welspun Guj and HCC.

Nifty has support around 5835-40 and then around 5770 while resistance is likely around 5960-70.

Banking Stocks Witness Strong Selling

Nifty opened on a buoyant note and traded above 6050 for considerable period. Metals and IT were largely responsible for this buoyancy. But, the leader thus far, banking saw significant amount of selling throughout the session and was largely responsible for markets shaving off all its gains. In fact Nifty closed marginally in the red at 5992. Most of the PSU banks witnessed strong selling as investors were spooked by RBI Governor’s advice to the banks on reducing lending rates and increasing deposit rates. This advice, if followed could mean reduction in NIMs of most banks. SBI lost around 4% while Can bank, BOI, Indian Bank, OBC, PNB, BOB and Allahabad Bank were other major losers. Bank Nifty was down around 2.5%. Metals were significant gainers as Tata Steel led the sector with an intraday gain of over 3%. JSW Steel, Ispat, Bhushan, JSPL and Sterlite were other prominent gainers. Tata Motors continued to accelerate as it hit a new all time high. Some other notable gainers were Welcorp, Ruchi Soya, Havells, CESC, IGL, Srei Infra, Sun Pharma, Siemens and United Spirits.

Nifty failed to encounter stiff resistance around 6050 and lost significant ground in the later half to slip below 6000. Twice now, market has failed to close above psychological levels of 20k and 6K despite spending significant intraday period above these levels. 6040-6070 remains a stiff resistance and it seems that we could see a swing to lower side and possibly a test of support at 5920-30 or even 5870-80. Banking that had taken the market higher has reversed its direction and could under perform in coming weeks. It would be prudent to avoid bargain hunting in banking stocks, particularly the PSU ones till the time the profit taking/selling subsides. Metals are showing some resilience as are some Capital Goods counters. Down days could be utilized to take long positions in leaders from these two sectors. IGL has given a daily breakout by closing above Rs340. Sustained trades above Rs 340 could take the stock higher to around Rs 365-370. Havells could target Rs 418-425 above Rs 404.

Nifty has support around 5925-40 and then around 5865-80 while resistance is likely around 6030-6040.

Nifty Rebounds Amidst Fragile Sentiments

Market recovered smartly over the week as Nifty gained over 4%. The rebound was across the board with the worst impacted sectors like Realty and Metals gaining the most. But, despite a stronger looking rebound the sentiments remained fragile as rumors continued to impact trading. It was particularly so on Friday as mid and small caps reacted adversely to the SEBI’s decision to ban promoters of four companies. However, despite the fragile sentiments it was a strong recovery that too Nifty to 6000 levels again and it was only the strong resistance around 6030-50 that stopped Nifty from going further. Incidentally both Sensex and Nifty found resistance round the psychologically important levels of 20K and 6K respectively.

Technically, the levels of 5020-40 and then 5850 are important supports on daily and weekly charts, while sustained move above 6050 could pave the path for another smooth move to around 6180-6220. Banking stocks made a strong comeback but it’s the IT stocks that look to be the best bet to take Nifty higher. BSE IT index closed on a weekly all time high as did BSE Healthcare index. Followup buying and support in Infosys, TCS, Wipro and HCL Tech on Monday or Tuesday could open up higher targets for these stocks. Tata Motors, M&M and Bajaj Auto are also looking good. L&T, Cummins and Crompton are also showing positive bias and here again followup in next couple of sessions could mean higher levels. Bharti is finding some resistance around Rs360 but it has strong support around Rs330 and any dips towards this could be utilized to take fresh positions. Infra and Realty did see some rebound last week but still are not out of the woods completely. So as a trader it would be better to stay away from long positions in these two sectors. Metals are looking better than Realty. JSPL has bounced back significantly from the low of around Rs 575 a few sessions ago and sustained trades above Rs 690 could take it further to around Rs 735-750. Tata Steel is moving sideways between 585 and 625. Positional trades could be taken on the long side in Tata Steel with a 6-8 weeks view.

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Performance HIGHLIGHTS

 

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62%(Made a High of Rs 280)

Nifty In A Consolidation Mode

Nifty opened with a big positive gap, thanks to the positive cues from US. From then on markets went into a consolidation mode as Nifty traded around 6000 for most part of the session. Stock specific moves were seen as certain stocks rallied sharply while others like Hero Honda reacted negatively to company specific announcements. Metals witnessed follow-up buying as stocks like Sterlite, tata steel and Hindalco moved higher. Certain stocks that had witnessed heavy sell offs like HDIL continued to gain ground. RIL was the prominent index mover as it was primarily instrumental in Nifty closing past 6000. Some of the other major gainers were Praj, Jain Irrigation, Pantaloon, Bombay Dyeing, Apollo Tyres, GSPL, Dabur, Polaris, Max, Dish TV and Punj Lloyd.  Losers were Ultratech, IRB, Jet Airways, Chambal, Mundra Port and Lupin.

Nifty found resistance around 6030 and then consolidated around 6000. 5970 and 5920 are important support levels in the immediate term and probability is that Nifty might consolidate its gains of past 4 days and could be sideways between 5920 and 6050. Fresh momentum is likely once Nifty sustains above 6050 and then the levels of 6180-6220 could be targeted. Bharti has seen sideways consolidation for past couple of sessions and could resume its upward journey soon. Havell’s could move to around Rs 425 if it sustains above Rs 395. HDFC has some resistance around 710 and above that it could move to around Rs 725-730. Sobha could breakout above 337 and might target Rs 355-360.

Nifty has support around 5960-70 and then around 5915-25 while fresh momentum is likely above 6050.

Bulls Have A Good Day At The Markets

Bulls had a great outing after what seems like a long time as Nifty leapfrogged by more than 100 points. After a steady opening markets gathered momentum as the day progressed. Banking stocks were in fine fettle and the sector was led by SBI as the stock moved up smartly. Bank Nifty gained almost 3%. Major banking gainers were Dena Bank, Vijaya Bank, OBC, Yes Bank, Central Bank, Union Bank and DCB. Cipla was one of the biggest gainer as it made a fresh new high. Tata Motors led the rally in auto stocks as it rallied strongly to around Rs 1300. Metals made a strong comeback on positive data from China. JSW Steel gained 7% and others like Tata Steel and Hindalco were also significant gainers. Some of the other prominent gainers were IOC, IVRCL, Punj Lloyd, Orbit, Bhushan Steel, Suzlon, Dish TV, MLL, GMR Infra, Aban, Bharat Forge and NCC. Hero Honda was the biggest loser as it dropped almost Rs100 from its intra day peak. Other losers were Mphasis, Bharti and Sesa Goa. 

Nifty consolidated around 5920-25 in the early trades and then moved up gradually to around 5970. The resistance at 5920-30 was taken out without much effort as global sentiments also helped. We are staring at 6000 again and it’s likely that Nifty could rally to around 6030-40 soon. Banking has again taken the lead and the rally in banks could continue. Dish TV moved to fresh 52-week high and is looking good for more. Stock could target Rs 80-82 within this move. Petronet LNG is likely to target Rs 130 while more upside is also seen in ABB, Central bank, ABG Ship( above 425), IFCI( above 65), Indusind Bank, Videocon( above 232), Divis, Aurobindo and Bata.

Nifty has support around 5910-20 and then around 5865-80 while resistance is likely around 6030-6040.

Realty Gains As Nifty Stages Recovery

The GDP numbers provided some relief to the battered bulls as Nifty staged a smart recovery from sub 5800 levels. GDP came at better that expected 8.9% but even that initially failed to have much impact as Nifty dropped almost 50 points lower to 5770. But then recovery was seen across the board and particularly in the stocks that have seen significant erosion in market cap over past 7 days. So, the best performing sector of the day was Realty as short covering and perhaps some value buying at lower levels helped stocks like DLF, Unitech, Orbit, HDIL and IBRealty to gain ground. The financial stocks too were amongst the gainers as buying returned in stocks like SBI and LIC Hsg. Metals remained under pressure on global worries particularly China. Some of the top gainers of the day were Core, Orbit, REC, HCC, IBReal, DCHL, DLF, BGR Energy, Bharti, IOB, Sobha, LIC Hsg, Renuka, HDIL and Can Bank. Stocks that remained under pressure were Pantaloon, GMDC, Escorts, Divis, Ashok Ley, Tata Steel and Voltas.

Nifty saw a significant rebound from 5770 and rallied more than 100 points intraday. But the 5880-90 level provided stiff resistance as Nifty failed to move past this level. But a small consolation for bulls was that Nifty managed to close above 5850. Broadly we believe that 5880-5915 is likely to be significant level to take out. More significantly Nifty now must stay above 5740-50 to stave off the threat of falling into downward spiral yet again. Bharti has provided leadership in past 5-7 days and it seems that Bharti could continue to outperform. Some resistance is likely around 375-380 but the overall set-up suggests that it could target Rs 425-440 in coming weeks. Some banking stocks like Central Bank( above 192), IDBI( above 166), Federal bank ( above 449), Uco bank and PNB( above 1230) are also showing signs of bottoming out.

Nifty has support around 5810-20 and then around 5760-75 while fresh momentum is likely above 5915.

Nifty Breaks The Losing Streak

There was some respite for the bulls as Nifty snapped its losing streak. Bailout package for Ireland and relief for Greece calmed the nerves a bit as far as global sentiments were concerned. Back home it was a nervous day despite some buying in certain key heavyweights like RIL, Bhel and L&T. Realty counters remained under pressure and the rebound seen in some of these was mild and hesitant. Index movement was basically on account of some buying at lower levels in Bharti, RIL and Bhel. BGR Energy was the biggest gainer amongst the F&O counters as it gained almost 22% on record volumes. Few others that found bargain buyers were IRB Infra, Chambal, Adani, Renuka, IFCI, Onmobile, Cairns, Bank of India, APIL and GMR Infra. Core Projects continued to struggle and selling was also seen in Escorts, Reliance Infra, Neyvelli, Welcorp, IVRCL Infra, EKC, Power Grid and RCOM.

Nifty did not make a fresh low and hesitatingly managed to move past 5800. Its real test would be to sustain above 5850-5880 as higher levels could invite fresh selling. The stocks and the sectors that have struggled over last few days continue to look jittery despite having fallen sharply. It needs to be seen whether index as well as the weaker stocks hold their Friday’s lows. IT and Pharma counters are being looked upon as safe havens and the price behaviour also reflects this. So, stocks like Lupin, Sun Pharma, TCS and Infosys are looking good. Bharti has been resilient and could be looked at as a positional trade or investment. Few others that are showing positive tendency are Indusind Bank, IFCI, Ultratech, Voltas, GE Shipping, Renuka Sugars and Auro Pharma.

Nifty has support around 5740-50 and then around 5680-90 while resistance is seen around 5870 and then 5925-30.

Scandals Continue To Put Pressure on Nifty

Nifty remained under immense pressure for the 4th consecutive week as market was rattled by yet another scandal. This time it was LIC Hsg and other banking institutions that were rocked by bribing scandal. CBI probe into realty companies getting loans from these institutions by paying bribes set the cat amongst the pigeons as various realty and financial stocks went into a tailspin. Friday was particularly bad for many stocks as panic gripped the bourses and marginal calls forced brokers to square off positions. So, we had stocks like Core Projects, HCC, Unitech, Orbit and the likes running for cover. HCC was the worst impacted as it also had to deal with Environment ministry that sent a show cause notice for its Lavassa project. JSPL too had to grapple with environment concern and stock hit a new 52 week low before recovering a bit in the end. Overall, it was yet another negative week for the markets as Nifty lost about 2.3%.

Downward spiral continues as Nifty failed to hold on to even the stronger support levels between 5800 and 5850. The leading sector (banking) has been rocked by various scandals and has been witnessing sharp sell off. Realty remains vulnerable given the current scenario and may be witnessing some kind of capitulation. The global scene also is not positive given the Ireland concerns coupled with Chinese tightening. Technically, the 5800-5850 support has not held as Nifty continues to hit new short term lows. Sensex has a bullish gap at around 18850 that has not been filled as yet and provides some faint hope for the bulls. The levels of 18800-900 could provide some support as the indicators have also reached extreme oversold readings. 19400-500 is a resistance area and till the time market sustains above 19500 it would be prudent not to take aggressively long positions. These are tricky times and it would be advisable to wait for some clarity to emerge before resorting to trading long positions.

However, investors with at least 6 months horizon could utilize panics to buy strong stocks. Nifty has support around 5680-5710 and resistance is seen around 5825-5850.

Markets on 25 Nov 10 - Midcap Stocks Have No Takers

Markets opened on a slightly positive note, rallied a bit, managed to remain steady till afternoon but later it gave way as the selling pressure of the expiry day was very heavy. Among the banking stocks PNB , Axis Bank and Bank of India were the big losers. LIC Housing Finance which was the big loser yesterday opened on a negative note and made a low of Rs.945 but managed to buck the trend and rallied smartly to an intraday high of Rs.1113.50 and finally closed at Rs.1053.80 with very minor losses. Infosys, HDFC Bank, Bajaj Auto, TCS, Hero Honda and HDFC were the major gainers and it was primarily Infosys and Bharti which helped the index close around 5800 levels. 
 

The biggest casualty was in the midcap stocks where there were no buyers and as a result the breadth was extremely poor. We are of the view that the corporate loan scandal to a very large extent has been discounted as market feels that this is not a systematic failure. The massive fall in the market to a very large extent can be attributed to the expiry of the derivative segment where rollover did not take place because of lack of confidence in the uptrend.

 

Other stocks which managed to buck the trend were Lupin, Indusind Bank, Bata India, Ultratech Cement, ACC and GE Shipping. These are the stocks which should be bought if the market remains steady tomorrow.

Nifty will face strong support at 5785 and 5750 and will face strong resistance around 5840 and 5885 levels.

Markets on 24 Nov 10 - LIC Loan Scam Affects Markets

Markets had opened on a steady note and were trading in a tight range but in the late afternoon the LIC Housing corporate loan scam saw the market and especially the PSU banking stocks tank by more than 10-12%. LIC Housing was the worst hit because of its direct involvement saw the stock losing Rs.238 in a single trading session. It fell to Rs.1070 against its previous closing of Rs.1245. The other PSU banking stocks which were badly hit were Bank of India, Central Banl, PNB, Canara Bank and SBI. But we do not think that this negative event has the potential to derail the Indian Bull market story. There could be some more fall because of this event but quality stocks will attract investors and will even attract premium because of strong fundamentals and strong corporate governance.

 

The market breadth turned negative after the reports of loan scam, in contrast with a strong breadth earlier in the day. The BSE 30-share Sensex lost 231.99 points or 1.18%, off close to 375 points from the day's high and up close to 85 points from the day's low. Volatility was high as traders rolled over positions in the derivatives segment. We are of the opinion that markets will have a bearish bias in the next few trading sessions and hence all rallies should be sold into. The medium and long term structure of the India growth story and the bull market is intact but it is the short term which will give problems to the market. However, it will not be a situation where every stock irrespective of its fundamentals will be hammered like 2008 crash. This time select stocks which have strong fundamentals will be bought during panic situations. Moreover, the market too is not heavily overleveraged. So there will be a decline but it might get arrested around 5800 or at the worst 5750 levels. Strong resistance will be witnessed around 6000 levels. Hence for the next one month, market might trade between 5750 and 6050. It will be extremely choppy and volatile to say the least.

The strategy for the short term would be to trade only on an intraday basis with tight stop losses and invest only for long term. Positional trading should be avoided because of volatility and gapped openings.

Markets on 22 Nov - Nifty Bounces Back

Nifty bounced back strongly to regain level of 6000. After a slightly positive opening, market traded nervously around 5930 for 2-3 hours before gaining strength and momentum as the day progressed. The second half was particularly convincing for bulls as Nifty moved past 5960 and then 6000. Recovery was led by IT, Autos and Banking stocks and later it spread to almost all sectors. Fertilizer stocks however were under pressure and were amongst the biggest losers. S Kumar’s was the biggest gainer amongst the derivative stocks as it zoomed up by more than 12%. Other major gainers were Uco bank, Triveni, Havells, Ruchi Soya, Indusind bank, Srei Infra, KFA, IDFC, Dena Bank, Escorts, Wipro, JP and Kotak bank. 
 

Nifty came close to 5900 during the day but managed to sustain above that and staged a smart recovery to close more than 2% higher at 6010. 5930-5950 again becomes a crucial and significant support in the short term. Market has been making these one day kind of moves and it would be difficult to call a bottom for now but probability is on higher side that we may have hit a credible bottom on Friday. 6040-50 is the next level to watch out for as it did provide resistance last time around. So, broadly we are looking at 5930 as a support on the downside while watching out for 6050 to provide some resistance. Sustained move past 6050 would further confirm the analyses that uptrend has indeed resumed. Tata Steel looks bullish above 625 and might challenge the resistance at 650-55 again. In number of stocks 3-day bullish set-ups are in place now and would be confirmed over next couple of days. The list includes Havells, KFA, Indisind Bank, Escorts, REC( above 366), Jain Irrigation( above 220), Exide( above 170) and Can Bank.

 Nifty has support around 5960-70 and then around 5925-30 while fresh momentum is likely above 6050.

Matching a Trading Style to Your Personality

If there is one SINGLE factor which is extremely crucial in determining whether an individual would be successful in making money as a trader/investor, it mainly depends on one’s chosen method that is consistent with one’s own personality and within their comfort zone. Virtually every successful trader/investor that I am familiar with has ultimately ended up with a trading/investment style suited to his / her own personality.

I have learnt from my own experience and it is my firm belief and strong conviction that there is no trading system that comes ready-made, one size fits all. There are so many trading styles that successful traders have adopted and the first thing a prospective trader or a trader after a few years of trading should do is to conduct a self- personality assessment to find out the specific approach that one is comfortable with. This according to me is the single most important factor that separates winning traders from losing traders.

Each trader must select the right market (equities, commodities, currencies), choose between discretionary trading and system trading, fundamental or technical methods, duration of trading (intraday , swing, positional or spread trading), aggressive and conservative styles, and so on and so forth. For all of these diametrically opposite choices, one should make the right selection that matches his/her individual personality so as to avoid internal conflict which might prove to be disastrous. At the end it seems that majority of the traders would have done this homework beforehand but in reality rarely does one seriously select a method that is in sync with one’s own personality. In a general sense, it is remarkably common for traders to adopt methods entirely unsuited to their personalities.

Instead what I find in the market place is traders who are good at system development end up consistently interfering with their own systems and overriding it due to lack of discipline that might often lead to disastrous results. There are traders who buy stocks with an intraday horizon and end up keeping them in their long term portfolio due to incapability of booking losses. For them, a long term investment is a short term trade gone wrong. It is noticed that plenty of investors who are naturally inclined towards searching for potential long term ideas end up instead doing short term trading because of emotional weaknesses like impatience or a habitual compulsion to be in a hyperactive need of consistently doing something in the market. There are several naturally born floor traders or screen readers who have great intuitive skills but abandon their special talent while listening to the loud opinion of the market which always turn out to be wrong at a very critical juncture. At the extreme end, one will also find plenty of theoretically oriented traders who after a lot of hard work develop intricate, low-risk arbitrage strategies but instead of putting them into effective practice they decide to become positional trader which is an approach that requires a different degree of risk acceptance far beyond their comfort levels. It is not uncommon to find investors loaded with momentum stocks in spite of having an aversion to volatility. Also it is uncommon to find investors holding on to value stocks (bought on tips) when they have a natural inclination for instant gratification which momentum stocks provide.

In all the cases mentioned above, one thing which stands out very clear is that, traders/investors with a natural bent for one style of trading/investing end up using a diametrically opposite style, usually to fulfil some emotional need which unfortunately they are not even aware of. To put it rightly, the need to match personality and trading style may be a matter of simplicity and common sense but it is certainly not common.

One should be aware of the following observations about one’s own personality to find out the right approach that would suit him. If you can’t stand to give back significant paper profits, then you are totally

1.      Unsuited for a long-term trend following approach. Even the best long term trend following system will be a disaster because you will never be able to follow it.

2.      If you can’t stay away from the screen, then investment will never suit you. Instead you should be day trading.

3.      On the other hand if you don’t want to watch the quote monitor, forget about intraday trading.

4.      If you can’t stand the emotional strain of making trading decisions, then focus on a mechanical trading system.

5.      If you cannot handle the uncertainty of overnight newsflow, then you are suited only to be a daytrader.

In a nutshell, the approach you use must be right for you; you must be comfortable following it. The importance of this cannot be overemphasized. Incidentally, it is because of this singular reason of mismatch of trading style and personality that purchased trading systems rarely make profits for those who buy them, even if the system is a good one. The odds of getting a winning system may be reasonable but the odds of getting a system that fits your personality is very little. System traders cannot create a system that fits everyone’s personality.

How does one find a system that is in sync with his personality? Given below is a list of questions whose honest answers will help a trader/investor to select a system suited to his personality.

1. What is my greatest weakness as a trader/investor?
2. What is my greatest strength as a trader/investor?
3. What do I find most interesting about trading/investing?
4. What do I find least interesting about trading/investing?
5. Can I handle drawdowns?
6. Do I have the patience to sit on stocks?
7. How much effort (time and money) am I willing to commit to trading/investing?
8. Should I trade as per a mechanical system or a discretionary system?
9. Can I handle volatility?
10. What all should my ideal system contain?

As one introspects and carefully answers the above questions and evaluates, it should become clear to you exactly what you will need for your system to be successful. Knowing one’s personality type and the specific idiosyncrasies of one’s temperament is the piece that will round out the ultimate success of your trading puzzle.

D Prasad is a Chartered Accountant and is in stock market for the past 15 years both as an investor following fundamentals and also as a trader following technical analysis. He is very well read on the subjects of Trading Psychology and Behavioural Finance. He is a partner of Equity Strategists which is an Investment Advisory firm providing Daily Newsletter and SMS Advices to traders, investors and brokerage houses. He is a regular invitee on business channels like NDTV Profit, UTV Bloomberg, CNBC Awaaz, ET Now, Zee Business and TV5. He can be reached at dvprasad1965@gmail.com

The Markets on 18 Nov 10 - Volatile Nifty

Nifty was extremely volatile as market and stocks reacted to a host of rumors floating around in the marketplace. It was a slightly bullish opening as Nifty opened well above 6000 but swung wildly as the day progressed. 2G spectrum scam dominated the proceedings as did the banking exposure to MFIs. Both hit the banking stocks negatively as Bank Nifty plunged over 3% at one point of time. Nifty too made a new recent low at 5906 before staging a smart comeback mainly on buoyant global cues. But broadly, domestic events took a centre stage and most of them were negative. Rumors that PM is stepping down aided to the nervousness. Banks were the worst hit as heavyweights like ICICI, Axis, SBI and HDFC Bank witnessed selling. Volumes were heavy in most banking stocks. However, on the positive side metal stocks turned positive mostly on positive global cues. So, strong buying was witnessed throughout the session in stocks like Hindalco, Tata Steel, JSW Steel and Sterlite. Pharma stocks too were active on the positive side as buying was seen in Cipla, Lupin and other pharma counters. Some of the other prominent gainers were Bata, Hero Honda, Bhushan, TVS Motors, GMDC, Jet Airways, Bharti, IOB, Auro Pharma and Ashok Leyland. RCom was the main loser amongst the derivative stocks and despite recovering almost 50% of its intraday losses ended the day around 5% lower. Some other losers included Ruchi Soya, Noida Toll, Unitech, Reliance Cap, Escorts, Rolta, Syndicate Bank, ABG Ship and Indusind.
 

Nifty broadly followed the scenario given yesterday. Only point missing that could have convincingly tilted the balance in favor of bulls is the fact that Nifty couldn’t move past 6000. Sustained trades above 6040 could firmly tilt the balance and one should start building fresh positions again in strong counters. Going by the session’s behavior it looks that stocks like IDBI, Tata Steel, Auto stocks, Cipla, Hindalco, Sesa Goa( keep a stop below 325), Jet Airways, KFA, JP( Stop loss below 116), Voltas and Crompton, to name a few are showing good interest at lower levels.

Nifty has support around 5940-50 and then around 5870 while resistance is likely around 6050.

Markets on 17 Nov 10 - Nifty Collapse

Nifty collapsed in the midsession after a relatively quiet start to the day. The sell off was once again across the board as basket selling was seen in Nifty counters. Nifty tried to stay above 6040-50 but weight of selling ensured a steep decline below 6050 and even below 6000. Nifty collapsed to 5970 before staging a weak rebound to close below 6000 at 5988. Nifty seem to be crucially poised at current levels as the levels of around 5950 have been providing support for past 10 weeks now. Any sustained trades below 5950 would fuel further unwinding and forced bull liquidation. The global cues continue to be negative and there have been renewed fears of Euro zone panic as well as some emanating from China. Next couple of days of trade could be significant and provide cues for future direction. In our view, intraday panic might see Nifty breach the levels of 5940-50 and might even see it drift to around 5875-80. But as of now it seems that market is likely to see a significant rebound and might not see a close below 5950. This volatility could be used by big position players to roll over their positions to next series. In case of the above scenario works out it would be prudent to wait for Nifty to rebound above 6000 to build small positions in resilient and stronger stocks. 
 
Nifty has support around 5940-50 and then around 5870 while resistance is likely around 6050.

Markets on 15 Nov 10 - Banking Stocks Lead Rebound

Nifty opened on a cautious note and looked shaky for the first few hours. There were bouts of selling during the session that repeatedly took Nifty to around 6050. Banking stocks, expectedly led the rebound as heavyweight banking stocks like SBI, ICICI and HDFC bank attracted buying since morning. The rebound gathered some momentum in the last 90 minutes as the buying spread to some other sectors like metals, pharma and FMCG too. Realty remained under pressure. SBI was the biggest gainer amongst the Nifty heavyweights as it gained over 4.5%. Other significant gainers amongst the derivative stocks were Syndicate Bank, Srei Infra, Orchid, Jet Airways, Cipla, Vijaya Bank, PTC, Dena Bank, IDBI, Uco Bank, Indusind Bank, Lupin and Escorts. Renuka Sugars came out with good numbers and was amongst the gainers. The ADA pack, however continued to disappoint and almost all group stocks with the exception of Rel Media were amongst the losers. Other significant losers were NFCL, Ispat, Orbit, Chambal, Triveni, Polaris, Pantaloon, Hotel Leela, BalramChini, IVRCL Infra and Unitech. Nifty managed to claw its way back above 6100 and closed almost 50 points higher at 6121.
 

Nifty found support at 6050 after looking a bit shaky for major part of the day. Significantly the banks have led the rebound and that prima facie augurs well for bulls. Bank Nifty was up almost 2.5%.  After a steep fall last couple of sessions it may not be prudent to suggest that Nifty has found credible support at 6050. But sustained trades above 6110 might take the rebound further to around 6150 and then around 6190-6200 where significant test is likely. Again Pharma and Banks could be the better ones to play on the long side. HDFC Bank could move further to around 2425 while some others like IDBI( above 195), Uco Bank( above 149), DCB and Indusind Bank could see decent upside form current levels. Cipla has shown strength post results and the 326-330 band has emerged as a strong support. It could try and challenge the supply zone of 358-363 again. But overall, it would be better to play this rebound with caution and maybe in smaller quantities.

 Nifty has resistance around 6150 and then around 6190.

Track Record - Major Buy/Sell Recommendations in Oct 2010

Reco. Date	Scrip	Reco. Price	Target Price	Remarks
22/10/10	RAYMONDS	378.35	458	TARGET ACHIEVED
12/10/10	CHAMBAL FERT	82	92	SECOND TARGET HIT ON 14/10/2010
11/10/10	ARSHIYA INTER	283	363	BOTH TARGETS HIT ON 12/10/2010
01/10/10	JYOTHI LAB	298.25	321	TARGET ACHIEVED

The Markets on 12 Nov 2010

It was a tough day for bulls as market headed southwards after being in a sideways mode for past few sessions. It was a slow grind mid session but the downward momentum picked up in the last 60 minutes as Nifty decisively slipped below 6250. All round selling accounted for weakness in Nifty that fell to as low as 6180 during the day. DLF lost over 4% while other significant Nifty losers were JP Associates, Cipla, Bharti, Bhel, TCS, Tata Motors, RIL, HDFC, Wipro and HDFC bank. As the list suggests all major sectors were affected by the negative sentiments. These sentiments were probably triggered by huge selling by FIIs in Korean market.  Standout stock of the day was RPower that powered its way almost 10% higher on huge volumes. Company has managed to get international financing at extremely reasonable interest rate. Then there were stocks like Lupin, Indusind Bank and LIC hsg that  reacted positively to inclusion in MSCI. Some other gainers were Bata India, ICSA, Hindalco, Syndicate Bank, Uco Bank, Tata Power, DCB and Reliance Infra. Mid caps too cracked in the later stages and shed significant weight. 
 

Nifty did breakout of the range of past few sessions but the direction was not as per our expectations and analysis. Nifty broke down below 6240 and in fact almost reached the targets for this breakdown during the day itself. The technical targets for range breakout was about 70-75 nifty points (around 6170). Now, the 6145-6170 band assumes a lot of significance for Nifty as the current breakout occurred above 6150. While an intra-session breach of 6140 cant be ruled out completely, inability to sustain and close above 6150 could put the current leg of rally in serious doubt. We believe that for markets to scale new highs stocks like RIL, HUL, Tata Steel and ICICI would have to assume leadership. RIL has strong short term support at 1065-70 while HUL sees a significant breakout beyond 315. 

Nifty has support crucial support around 6150-70 while resistance would be seen around 6250-60 and then around 6310.

The Markets on 11 Nov 2010

Markets remained in a sideways/consolidation mode as Nifty traded in a narrow band of about 40 points. Tata motors zoomed to higher levels in early trades reacting to its better than expected numbers. It gave up some of its intraday gains on profit taking but still managed to close above Rs 1300. SBI, on the other hand struggled as stock continued to adjust to its lower than expected results. Another heavyweight Bharti was also under pressure post results and was one of the main drag on the indices. It was a dull or mixed day for the heavyweights and it were the mid caps that provided all the excitement. Titan added another 8% to move above Rs 4100 while Shipping stocks were also in demand. Some of the prominent gainers for the day were 3i infotech, Bata, Bombay dyeing, HCC, MLL, Sun TV, ICSA, Renuka, Alok, Tata Global, Ind Hotels, M&M, Bharat Forge, Sintex, Apollo Tyres and Hotel leela. List of losers comprised of Colpal, Chambal, Onmobile, Divis Lab, Crompton, Ambuja, Jindal SAW, Ranbaxy and Core.
 

Nifty seems to be trapped between 6250 and 6320 as of now but narrow day today suggests that Nifty could be moving out of this range in couple of sessions. Probability of breakout on the upper side is greater as of now and we maintain short term targets of around 6420 for Nifty. Autos continue to display strong momentum and stocks like TVS, Escorts, M&M and Ashok Leyland could move up over next few sessions. HCC is again witnessing some buildup and could head towards Rs 70-71 where it faces strong resistance.

 

Nifty has immediate support around 6250-65 and then around 6210-15 while fresh momentum is seen above 6320.

The Markets on 10 Nov 2010

It was a choppy day for the markets as Nifty moved up and down through out the session. After a neutral start market moved higher but gave up all its gains immediately and traded in negative territory. Strong buying in index heavyweights like HUL, ICICI, Infosys and TCS lifted Nifty above 6300 in the last 30 minutes of trade. SBI was the main drag on the indices as stock witnessed strong profit taking after disappointing Quarterly numbers. IDFC too moved lower post results. Aviation stocks were in fly mode as Jet Airways zoomed up by more than 10% while KFA too posted strong gains. Fertiliser stocks found fresh momentum as strong gains were seen in Chambal, GSFC, NFCL, Deepak Fert and GSFC. Some other smart movers for the day were IBReal, TVS Motors, SKumars, Petronet, Power Grid, Alok, LIC Hsg, Crompton, BOI, Core, Can bank, Dabur, GVK, MRPL, Dena Bank, Indusind and HDFC bank. Losers included Srei Infra, Patni, JSW Holding, Indian info, Hind Zinc, IVRCL Infra, GMDC, BGR Energy, BOB, IGL and APIL. 

 

Nifty closed above 6300 after dipping to around 6240 during the day. Strong close after a sluggish session suggests that market might be ready for taking out the previous peak after a couple of days of consolidation. It might move all the way towards 6400-6420 soon. HUL made a strong move and made a new 10 years high. Technically, stock continues to look very strong and could be headed much higher from current levels over next few weeks. After Alok Ind, SKumar’s seems to have broken out. Sustained trades above 86 could take the stock higher to around Rs 104-106 in next few sessions. Indusind bank and BOI have are also showing positive intentions after brief consolidation and could see decent upside.  Few others that look positive are Ultratech, Lupin, Unitech and MRPL.

Nifty has immediate support around 6250-65 and then around 6210-15.

The Markets on 09 Nov 2010

It was a typical hangover day as markets re-opened after diwali blast. The energy was missing and that was evident in the index movement. It was lackluster to say the least mostly on account of lack of any substantial activity. There was some profit taking in IT heavyweights as well as OMCs. SBI too witnessed some selling ahead of its numbers. The commodities were at the centrestage as both soft commodity stocks like Sugar as well others like metals witnessed strong buying. Sugar stocks were amongst the biggest gainers of the day while significant gains were seen in TataSteel and Sterlite. Cement stocks continue to move higher and Ambuja cements hogged the limelight by moving to life time highs amidst heavy volumes. Some of the other significant gainers were Can bank, Chambal, HOEC, KFA, Hexaware, Divis Lab, Alok, RPower, IFCI and JP Associates. Losers included Mphasis, Power Grid, GMDC, IGL, Apollo Tyres, IVRCL, HDFC bank and Neyvelli.
 

 Nifty paused for breath just around the previous peak and shed some 40 points at close. The undertone remains bullish and we could be heading towards 6400 in coming sessions. Immediate support to Nifty is seen around 6240 and then around 6210. IFCI has given a fresh breakout above 76 and could be headed to around 85-86 in coming sessions. JP is interestingly poised and sustained trades above 140 could open up strong upside. Sterlite broke out of range of past 6-7 months and is looking good for another 12-15% rise from current levels. Tata Steel is also showing momentum and could be accumulated on dips for target of around Rs 670. Amongst others more upside is seen in Godrej Ind, KTK bank, IDBI, Exide, Triveni , HOEC and Chambal.

 

 Nifty has immediate support around 6260-70 and then around 6215-20 while some resistance is likely around 6420.