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.