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.
Sunday, April 10, 2011
Profit Booking Sees Nifty Slipping
Thursday, April 7, 2011
Action Replay!!
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 uncertainity 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.
Wednesday, April 6, 2011
Markets See A Positive Momentum
Market opened on a positive note and promptly made a new recent high just around 5950. But again some sector churning and some profit taking mainly in the heavyweights was witnessed at higher levels. Nifty traded just around 5900 for most part of the day as yet again activity was concentrated mainly in the non-index counters. Some of the counters and sectors that have been laggards for long were in a catching up mode. Infra and Realty stocks were the prime examples of this phenomenon. So, some of the top gainers were HDIL, LITL, Unitech, NCC and HCC. Suzlon also attracted huge volumes as it gained around 8%. Some others amongst the top gainers were Polaris, Rolta, TV18, Sterlite Tech, PTC, Mcleod Russell, Sobha, KFA, Sesa Goa and REC. Profit taking dragged some of the counters that had seen strong run up over past few days. The list includes Idea, Cairn, Pantaloon, Wipro, Chambal, Tulip, Onmobile, OBC, LIC Hsg and ABG Shipyard.
Nifty remained in a consolidation mode even as broader market saw positive momentum. Polaris that was mentioned couple of days earlier has seen a strong breakout amidst huge volumes. Pattern suggests decent upside over next few weeks and one can accumulate it on dips for potential targets of around Rs 235-240. LITL has also moved out of consolidation mode and might see another 12-15% upside. Few others that could seek higher levels are IGL, Tech Mah, Aurobindo( above 205), Rolta, DLF( above 274), PFC, HCC and TV18.
Tuesday, April 5, 2011
Mid Caps Join The Party
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 target Rs 1040-1050. Others that have positive patterns are IVRCL Infra, PFC( above 254), L&T, Tata Motors and REC( above 261).
Monday, April 4, 2011
Markets On A Roll
It has been amazing week for India….markets were on a roll and Indian Cricket team has been on a roll too. Sensex continued to march northwards breaking all resistances while Indian cricketers moved past all resistances to lift the World Cup after a gap of 28 years. Well done, India and Congrats to Dhoni and team! Meanwhile, Nifty was up 3% for the week as it moved past 5800. Banks helped the indices earlier in the week while IT stocks lifted it towards the later half of the week. Markets have rallied almost 10% in last two weeks as FIIs have again turned positive on Indian markets. Although markets have moved past all resistances during past 10 days and that too without much sweat, it seems that indices could consolidate around current levels as small and mid caps do the catching up. This phenomenon was in play even on Friday as mid caps rallied sharply while mainline indices remained almost unchanged. Next week could also see stock specific moves than indices or large caps. Auto and Cement counters might react to the monthly sales figures. IT stocks have rallied ahead of quarterly numbers and now must consolidate before the results season is kicked off by Infosys numbers.
Monday, March 28, 2011
Nifty Makes A Smart Beginning For The Week
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.
Friday, March 25, 2011
Realty And Banking Lead The Way At the Markets
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.
Wednesday, March 23, 2011
Mid Cap Stocks Shine on a Positive Day
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 5375 while 5530-5550 should provide resistance as of now.
Tuesday, March 22, 2011
Another Listless Day In The Markets
Markets were in a slightly positive mode as Nifty managed to trade above 5400 for most part of the day. Indices were largely helped by heavyweights like Bharti, SBI, HDFC, JP Associates and DLF. Maruti witnessed some value buying at lower levels and was amongst the day’s top gainers. Some banking and infra stocks too were on the value buying list. Some of the prominent gainers were LITL, Tata Comm, Neyvelli, Apollo Tyres, Havells, Maruti, Opto Circuits, Pantaloon, Renuka , LIC Hsg and Bata India. But, despite the positive bias throughout the session market lacked any momentum and traders’ activity was also on the lower side.
Monday, March 21, 2011
A Listless Day at the Bourses
It was a listless day at the bourses as Nifty failed to follow any direction. It did try twice to claw its way past 5400 but could not manage to do that. Most of the global markets were trading higher but those were largely ignored by our markets as perhaps it was more concerned with the higher crude prices. Some stock specific moves brightened the otherwise dull day. HOEC gained over 9% on very heavy volumes while Ranbaxy lost substantial ground as mylan sued US FDA over lipitor. Some of the significant gainers were Escorts, Opto Circuits, Areva, Lupin, Sun Pharma and GMDC. Losers included PFC, Central Bank, Aban, S.Kumar’s, Tata Communications, Hindalco, Nalco and Jet Airways.
Nifty did not do much but the fact that it failed to move past even 5400 is a cause of concern. On the hourly charts it has given a breakdown by falling and trading below 5420 and sustained trades above 5420-30 only would negate the current bearish short- term structure. On the downside support exists around 5325-30 and then around 5280. Hindalco and HUL have given a breakdown on daily charts by closing below 194 and 270 respectively. Other stocks that look weak are Ambuja Cements, Infosys, Mundra Port, Auto stocks and Jet Airways. Few stocks that are showing resilience and could move higher in even a marginally bullish market are certain banking stocks like Andhra bank, HDFC bank, Indusind bank, Axis Bank, IOB, OBC and others like HDFC, REC, Crompton, Lupin, GMDC and Opto Circuits.
Wednesday, March 16, 2011
Banking Leads The Way On A Positive Day For Nifty
Market began the day on a positive note and remained positive through out the day as Nifty closed above 5500. Banking stocks led the rally ahead of the RBI policy meet as Bankex rallied over 2% on all round buying in banking stocks. SBI was up over 3% while smart buying was seen in other banking stocks like Central Bank, Canara Bank, ICICI, Axis Bank, Yes bank, Andhra Bank and Union bank. Buoyancy was also there in Auto counters like TVS, Bajaj Auto and Tata Motors. ADA pack remained upbeat as after strong rally in Reliance Cap it was the turn of Reliance Infra to attract strong buying. Even RPower and RCom too moved higher. Some of the other significant gainers were Orchid, Welcorp, Voltas, 3i infotech, REC, Hexaware, Escorts, Exide, Bharat Forge, Opto circuits and GMDC. Mphasis slipped further to almost 18 months’ low. Jain Irrigations, Glaxo, Cummins, Indian Hotels, HUL and Apollo Tyres were some of the other losers.
Nifty continues to trade in a broad range of 5400 and 5550. Despite huge intra day volatility Nifty has neither closed above 5550 nor below 5440 for past 15 days. Trend remains sideways with positive bias and the kind of strength and resilience that our markets have shown in past 2-3 weeks does improve the chances of a positive breakout. Intra day trades above 5570 would be the first indication of a breakout while a firm close above 5550 would further confirm that. Banking stocks have rallied ahead of RBI policy and absence of any negative surprises could propel the Bankex higher. Bank Nifty is on the verge of a sharp breakout and sustained trades above 11100 on Bank Nifty could take it higher to around 11550-11600. Central bank rallied sharply ion strong volumes and has given a breakout above 165. Other banks that look good are Can bank, OBC, Yes Bank and Indusind bank. REC has seen strong volume action over past 3 sessions and may be bottoming out. Sustained trades above 232 could trigger a buy with short term targets of around 255-260 with stop loss placed below 220. Some other counters that look positive are Orchid, Ranbaxy( above 472), Auro Pharma( above 198), Bhushan Steel, LIC Hsg, Havells( above 360) and GMDC.
Nifty has immediate support around 5465-75 and then around 5415-25.
Tuesday, March 15, 2011
Markets Hold Despite Global Downward Trend
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.
Monday, March 14, 2011
Buoyant Start To A Fresh Week
Fresh week opened on a buoyant note as market absorbed the Japanese tragedy and moved higher. It was a slow but steady rise in the morning session as Nifty traded around 5500. It was only later in the day that momentum picked up as the short term shorts ran for cover. RIL led the rise with almost 3% rise on above average volumes as the stock closed well above Rs 1000 after almost 2 months. Reliance Cap also saw heavy activity after it announced stake sale in its insurance arm to Japan’s Nippon insurance. Stock zoomed up by around 10%. The cooling down in crude prices played its part in OMCs and Aviation counters. Gains were seen in BPCL, HPCL, Jet and KFA. Some other prominent gainers were Welcorp, Escorts, GAIL, Onmobile, Ashok Leyland, Dish TV, GSPL, Tata Power, Union Bank and Voltas. Banking stocks were subdued early in the day but gained towards the end on account of short covering.
Nifty has again reared its head above 5500 and is now poised to take another shot at 5600. Intraday sustained move above 5570 would trigger a swing buy in Nifty and close above 5550 would be another confirmation. The up move in RIL that was mentioned yesterday augurs well for the overall Nifty move. RIL could target Rs 1065-70 over next few sessions with some resistance around 1040-45. BPCL has target of around 590-95 if it sustains above 560. OBC and Can Bank are showing strong resilience and could see sharp upside in neutral to positive market. Others that show promise on the upside are JSPL (above 669), Gail, Ranbaxy, Indusind Bank, HDFC, Bombay Dyeing, Kotak and Godrej Ind.
Sunday, March 13, 2011
Nifty Fails To Sustain Above 5500
Market remained in a sideways mode throughout the last week, with bears gaining a slight upper hand towards the end. Nifty failed to sustain above 5550 as global cues turned negative. Crude continued to trade at uncomfortable levels even as the news flow from Euro zone deteriorated. To cap it all there was natural calamity in the form of Earthquake and Tsunami that hit North Japan. Against such backdrop one might be tempted to believe that Indian markets showed some resilience as Nifty managed to stay around 5450. But there were signs of fatigue on various heavyweights’ chart patterns even as the volumes dipped on lack of participation. Most of the sector indices registered weekly losses and only Oil and Gas and Realty index managing to show some gains. Metals and the Capital Goods were the worst hit, both losing around 3% for the week. Heavyweight stocks that are showing weakness are SBI, Bhel, L&T and the three biggies from Tata stable, TCS, Tata Steel and Tata Motors. Tata Steel close on Friday was the lowest in around 6 months both on daily and weekly basis. It has some support now around 545-550 but clearly it has become a ‘sell on rise’ stock. TCS has some support around 1050-55 but technical the stock has turned weak and could see even lower levels in coming sessions. Banks had led the rebound post budget but now the smaller banks in particular are looking vulnerable. The list includes Andhra Bank, Vijaya Bank, DCB, Allahabad Bank and Uco bank. Some positively inclined chart patterns are that of HDFC, HDFC bank, RIL and Ranbaxy amongst the heavyweights. RIL could see a clear breakout once it settles above Rs 1000 while Ranbaxy could target Rs 485-490 above 465. Amongst others Bhushan Steel has target of around Rs 480-485 once it stabilizes above Rs 440. Areva( above 260), Divis( above 630), Exide( above 141), Tech Mahindra, Aban and OBC( above Rs 360) are some others with positive bias.
Nifty has immediate support around 5385-5410 while resistance is likely around 5510-5525.
Thursday, March 10, 2011
A Difficult Trading Day
The two day winning streak was halted as market saw some selling in select banking stocks because of weak global cues. The West Asia crisis saw further escalation and crude continues to trouble to market and downgrading of Spain also played a small role in the bearishness. The market edged lower in early trade as Asian stocks fell on escalating fighting in Libya. The market recovered after hitting a fresh intraday low in morning trade. An intraday recovery in afternoon trade proved short-lived with the market soon losing ground again in mid-afternoon trade as European stocks fell. The market once again came off lows at the fag end of the trading session. Banking stocks dropped ahead of a monetary policy review from the central bank next week. India's largest private sector bank by net profit ICICI Bank lost 1.87% and India's second largest private sector bank by net profit HDFC Bank fell 0.16%. India's largest bank by net profit and branch network State Bank of India shed 1.63%. Stocks like Reliance Capital, APIL, ABB and BHEL were the few stocks which were on the gainers list.
Today was a very difficult trading day as movements were very choppy. Tomorrow however, we expect the market to gain some momentum and hence the probability of it being a trended day is on the higher side. The critical levels for the Nifty futures on the upside would be 5525 and 5460 on the lower side. Trade on the short side if the support is broken and on the long side if the resistance is broken on the upside.
Wednesday, March 9, 2011
Nifty Holds Even
Nifty swung both ways before closing almost unchanged. The intra day range was almost 100 points as Nifty dipped below 5500 mid session before staging a smart recovery that took it past 5550. Stock specific moves dominated the session and most of the action was seen in the mid caps space. The tea counters were very active and most rose sharply on heavy volumes. Mcleod Russell was up around 9% while Tata Coffee rallied for second successive day and gained over 13%. Some other prominent mid cap gainers were S.Kumar’s, BGR Energy, MLL, IVRCL Infra, Bombay Dyeing, Apollo Tyres, Noida toll, Wel Corp and Hexaware. The ADA group stocks also gained ground on some short covering. Certain stocks that have gained ground in the last few sessions witnessed some profit taking. This list includes Cairns, DCHL, Indusind Bank, PNB and Sun Pharma.
Nifty has been trading around 5500 for past 4-5 sessions now but has failed to give a closing above 5550. The range between 5550 and 5600 continues to provide stiff resistance. RIL has been consolidating between 970 and 1000. Breakout is likely above Rs 1000 that could open higher targets of around 1035 and even Rs 1060-65. Breakout in RIL, if and when that happens could also help Nifty to move past 5600. BGR Energy was mentioned as a breakout candidate above 455 and that breakout has taken place. Sustained trades above 450 could take it around 485 and 510. LIC Hsg has potential to target 215 and even 228-230 over next few sessions. Some other stocks that might show an uptrend over next few sessions are Bombay Dyeing, Welcorp, Jet Airways( above 460) and CESC.
Tuesday, March 8, 2011
Crude Still A Worry For Markets
Markets opened on a positive note and continued to move up in a slow and steady manner and finally spot Nifty closed 57 points higher at 5520. Market breadth was relatively strong as advances on NSE were an impressive at 943 as against 487 declines. Among the frontline stocks Infosys Technologies led the market from the front and it got support from other stocks like Tata Motors, HDFC Bank and Bajaj Auto. Tech Mahindra was the surprise winner as it closed at Rs.743 ( went up by Rs.65). With the political stalemate between DMK and Congress getting resolved, a little bit of more short covering will be expected tomorrow. Rising crude oil prices still continue to remain a worry as Libya crisis is still to be resolved. The 200 DMA lies at 5660 and the best case scenario for the bulls would be a rally till this level. The journey to this level is however not expected to be smooth as higher levels would definitely see intense selling . Crude is the biggest worry for the market and market movements will hence be extremely volatile and choppy till this issue gets resolved.
The best strategy in the current scenario would be to adopt a trading approach in frontline stocks and investment in midcap and smallcap stocks postponed till the 200 DMA is decisively crosses. One should stay in cash and there is no hurry to invest into the market. Short term preferably intraday trading is what one should follow.
Monday, March 7, 2011
DMK and Libya Have Their Impact on Nifty
Markets opened lower on account of soaring crude price because of unrest in Libya and also because of the political crisis as a result of DMK pulling out of the government. The weakness persisted till afternoon but as rumours of a patch up between DMK and the Congress party surfaced, Nifty futures smartly bounced back from a low of 5400 to a high of 5482 in a span of just 2 hours. The dramatic recovery of 80 odd points was a surprise but the improved sentiment could not spill over to the broader market as the advance decline ratio remained miserable at 375 advances as against 1072 declines.
We are of the view that for the markets crude oil is a bigger worry as it has the potential to derail the economy whereas the political crisis will not have any impact on the stability of the government as it has sufficient outside support for survival. The Libya crisis is expected to be over in the short run and hence will have a limited impact. The issue which worries the market is whether this problem in Gulf extends to Saudi and other countries also. For the time being, Nifty is expected to trade in the range of 5200 and 5600. Crude Oil movement alone can break this range of Nifty on either side. If Libya crisis gets resolved early and the problems do not spread to other parts of Gulf, then an upward breakout is possible. The lower breakdown will happen only if oil moves beyond $125. Till then Nifty might trade in the range of 5200 on the lower side and 5600 on the higher side.
Sunday, March 6, 2011
Saturday, March 5, 2011
Auto, Banking Sectors Lead Rally In Budget Week
The Budget week lived upto its reputation of being a volatile one. Volatility began on the Budget day itself as Nifty rallied initially, only to give up most of its gains. But, the day after saw a one sided up move of around 200 points as Nifty moved past 5500. Overall, it was a good week for bulls as indices rallied over 4%. This came against the backdrop of higher Crude prices and a lukewarm Budget. But, the fact that there were no expectations whatsoever from the Budget and there were short positions going into the Budget helped the markets. Auto, FMCG and Banking indices were the top three gainers for various reasons associated to Budget. There were no sectoral losers but the least gains were seen in IT and Oil and Gas. Nifty crossed 5600 briefly on Friday before selling set in at higher levels. Markets have seen a decent rally post Budget but now we are placed just around the strong resistance zone of 5550 to 5600. As mentioned earlier, it may not be easier to take out this resistance in one go. But, we do believe that market has made a sustainable bottom around 5230 and for the first time since November 2010, we have a higher bottom and now higher top( 5608 on Friday). The resistance at 5600 is likely to be taken out eventually maybe over next 5-7 trading sessions. Any correction should find initial support around 5440-60 and then a strong one around 5350-5375. The second level is unlikely to be breached and positional traders could take long positions on declines in Nifty as well as bullish counters with positional stop loss below 5340. Clear breakout is seen above 5625 with potential targets of 5770 and around 5900. Banks and Autos have been the leaders in the current rally. One needs to be selective in Autos and we see positive bias in Bajaj Auto and Hero Honda (above 1560). Banking is looking to be in a better shape and one can use dips to accumulate stocks like HDFC Bank, SBI, Yes Bank, Indusind Bank, Allahabad bank, OBC, Canara Bank and BOI. Another important thing to note is that once Nifty stabilizes above 5625 short covering could lift the weaker sectors like Infra and Realty too. Certain other counters that are looking positive and are Buy on dips candidates are L&T, IDFC, Havells, Cairns
Thursday, March 3, 2011
Nifty In Consolidation Mode
It was a choppy day for the markets as Nifty see-sawed between 5470 and 5570. Nifty opened on a weak note and traded with negative bias in the morning session. But, sentiments recovered and turned for the better on news that Col. Gaddafi has accepted peace moves. Nifty recovered more than 100 points from the day’s lows. But, expectedly selling came in at above 5550 levels as Nifty closed at 5536. Overall, it was a satisfactory day considering the fact that we had gained around 200 points on Tuesday. DCHL was the biggest gainer amongst the derivatives counters as it gained over 14% on huge volumes. Other significant gainers were Sobha, Triveni, Orbit, Renuka, Karnataka Bank, KFA, Godrej Ind, Indian bank, JP Associates, Tata Power, Bhel, L&T and Apollo Tyres. On the losers’ list were S.Kumar’s, Welcorp, IDFC, Sun Pharma, LITL, Hotel Leela, Adani Power, Aurobindo, Reliance Infra and Jain Irrigation.
Nifty managed to sustain and close above 5500. Markets are showing strength and a close above 5550 would be very positive for the short to medium term trend. It may take some time and Nifty might consolidate between 5400 and 5600 for 3-5 days. But, broadly the trend has turned positive and any declines should be used to accumulate positively biased counters. Sustained trades above 5600 could trigger another wave of short covering and that might benefit the badly mauled counters like IVRCL Infra, DLF, JP Associates, LITL and the likes. As of now the large caps HDFC, HDFC Bank, L&T, SBI, Bhel and Bajaj Auto are looking good and should be accumulated for decent trading gains over next 2-4 weeks. JSW Steel has given a breakout above 940 and is likely to target Rs 1025-1040 in next few sessions. Similarly Bajaj Auto has broken out from an inverted head & shoulders pattern and is looking bullish. Some others that are looking bullish are Godrej Ind( above 177), Apollo Tyres, IOB( above 140), Havells, LIC Hsg( above 202), Wipro( above 448), Kotak and IRB( above 195).
Nifty has immediate support around 5445-60 and then around 5375-5400 while resistance should be seen between 5570-5610.
Wednesday, March 2, 2011
Nifty Goes Through A Post Budget Big Bang
Nothing big bang was there in the Union Budget but it was a big bang day at the bourses as indices gained over 3%. The session began on a marginally positive note but momentum gathered as the day progressed. Auto and financial stocks led the rally as was mentioned in the previous newsletter but the velocity of the up move as witnessed in stocks as well as indices was totally unexpected. The monthly sales figures released by Auto manufacturers further fuelled the momentum. The biggest gains were seen in TVS Motors, Ashok Leyland, M&M, Maruti and Escorts. Bank Nifty zoomed higher by more than 4% on across the board buying in banking stocks. Short covering too aided the up move. Nifty finished the day at 5530 almost at the high point of the day. Nifty has moved up sharply and is now placed just below the strong and crucial resistance zone of 5545 to 5575. This single day up move of around 200 points has raised hopes for a positive bias over short to medium term. This is not to suggest that it would be a straight upmove without any corrections/consolidations. In fact, we could see some consolidation just around the current levels before making another attempt at taking out 5600. The global cues could trigger some kind of correction. Technically, the levels to watch for on the downside are 5440 and then 5370-5380. We could retrace back to the second level but this level should provide strong support for the upward bias to persist. So, practically as a trader one should use declines towards 5440 and 5375 to take bullish positions in Nifty as well as stocks. Bullish pattern is seen in LIC Hsg and sustained moves above 202 could trigger strong up move. As mentioned in previous newsletter some banking and auto stocks are also looking positive and one can accumulate these stocks on decline.
Monday, February 28, 2011
Budget Fails To Impact Markets
Union Budget was presented in the Parliament and the markets witnessed a see-saw movement post Budget. It rallied sharply immediately after the Budget speech and Nifty was up more than 3% at one point of time. As the current Budget was low on expectations it seemed more like a relief rally. But, as the Budget lacked any big bang announcements, the higher levels once again attracted selling and Nifty lost almost all its post speech gains in the last 60 minutes to close with a marginal gain of only 30 points. The stocks or sectors that gained post Budget were the ones that were expecting some negative announcements and the absence of such negative measures provided a leg up to these sectors. Cases in point are Auto stocks and tobacco stocks. The banking or financial stocks were also amongst the gainers as FM pegged the fiscal deficit at just around 4.6%. So, the prominent gainers were ITC, IDFC, TVS Motors, IOB, Central Bank, Reliance Cap, Canara Bank, Federal Bank, M&M and Maruti.Coal India was nother nig stock to gain sharply as the Coal prices were increased 30%. But this measure had a negative fallout on the user sectors and power and cement stocks reacted negatively. There were some measures to boost infra spending but nothing much to enthuse the markets. Sesa Goa was impacted negatively as 20% duty was imposed on iron ore exports. So, the list of losers had stocks like BGR Energy, Patel Engg., Sesa Goa, Jain Irrigation, Mundra Ports, Pantaloon, Educomp, Reliance Infra, Ambuja Cement, TV18, Ranbaxy and JP Industries.
So, the Budget has come and gone and has largely failed to have much of impacts on markets. We are back to looking at Global cues and Crude oil movement. But, since there were no or muted expectations market is unlikely to react much on the lower side. We could see a drop in volatility and perhaps a sideways movement between 5200 and 5600 for the short term. Some base building is likely in certain banking/financial stocks. The Auto counters too could consolidate around current levels before moving higher. But, broadly nothing much seems to have changed technically for the overall markets and the bigger sectors. Nifty must trade above 5375-85 consistently to be in the neutral territory, atleast. 5250-60 is likely to provide support in the near term.
Thursday, February 24, 2011
A Day To Forget
It was a day to forget for bulls and day to cherish for bears. Markets opened on a slight negative note but it was a painful slide throughout the session. The levels were broken with utmost ease as there was not any attempt whatsoever by the bulls. Nifty lost a whopping 200 points before closing with a loss of around 175 points. It was the biggest single day drop seen in many months. No sector or heavyweight was spared as gainers were difficult to spot. The Feb series ended on an extremely bearish note with no buildup whatsoever ahead of Budget. Nifty has now gone below even 5300 while we expected Nifty to find some support around 5375-5400. Nifty is now precariously placed very near to the previous low of 5177 and the momentum as well as the technical structure of many heavyweights suggests that this level is not safe anymore and we could be headed lower towards 5000. The levels of 5375-5400 that were expected to provide support would now act as strong resistance. Any attempts to any technical rebound would find resistance around 5375-5380 and then around 5440-50.
Nifty Continues to Drift Lower
Nifty continued to drift lower ahead of expiry of Feb series of derivatives. The sector that had led the rebound, the banking sector was the one responsible for dragging the indices lower. SBI was the main culprit as it dropped sharply by around 4%. Other banking heavyweights too did not fare any better as both HDFC Bank and ICICI appeared prominently on the list of losers’. Ranbaxy that came out with disappointing set of numbers yesterday fell to almost six month low, losing over 6% on huge volumes. Some of the key stocks amongst the day’s losers were Aurobindo, PTC, Punj Lloyd, Jain irrigation, Ashok Leyland, United Phosphorous, DLF, TVS Motors, Jet Airways and Mphasis. Reliance Infra managed to recover some lost ground on account of short covering as the stock moved up by more than 12%. Another forgotten heavyweight to see sharp recovery was Hero Honda. Some others to gain on a lackluster day were Hexaware, ABB, Pantaloon, Indian Info, Reliance Cap, BOI and Dr Reddy. But, overall, it was yet another disappointing day for the markets.
Nifty traded in the red for most part of the session as some of the key heavyweights came under a lot of selling pressure. But, technically, things stand as they were yesterday as we are still above the crucial levels of 5375-5400. As of now it looks likely that expiry could happen around 5450 only. Beyond tomorrow, we believe that it would be better to wait till Budget announcements to take a confident call on markets as well as stocks. We could see some recovery if the aforementioned support holds on expiry day and we might enter the Budget day around 5525-5550.
Tuesday, February 22, 2011
RIL-BP Deal Fails To Create Magic
RIL magic failed to work as the global cues took precedence over the RIL-BP deal. Though RIL remained in the positive territory and traded just around Rs1000 for most part of the session, it failed to have any rub-off impact on other stocks. The other heavyweights were under pressure throughout the session and that kept the indices in check. Nifty did try to trade above 5500 but failed to do so as the European markets too opened on a weak note. The airlines stocks as well as the OMCs were the worst impacted as crude oil zoomed past $ 92 on increasing Middle East crisis. Jet lost around 8% on heavy volumes while BPCL, HPCL and IOC were amongst significant losers. Idea was also amongst the losers as it dropped around 5%. Even the banking stocks that were looking resilient till last session also succumbed to the overall negative sentiments. Some of the top losers were GE Shipping, Cummins, Educomp, IVRCL infra, Bombay Dyeing, Areva, MLL, Sun Tv, Aurobindo, Suzlon, Petronet, Hero Honda and Ranbaxy. RIL led the list of gainers that includes Cairns, HDIL, Titan, GSPL, Indusind bank, Sterlite and Renuka sugars. But, overall it was a disappointing session as Nifty failed to sustain higher levels.
We expected markets to trade higher after the RIL announcement but global cues caught up with the sentiments and came as a shot in the arm for bears. It’s difficult to take any confident call and that has been the case for past 3-4 weeks now. There has been a deluge of bad news and now the global cues are also turning negative. 5375-5400 should continue to be a strong support zone till the budget and we might see a technical rebound from these levels. The stocks that could lead the rebound are Bajaj Auto, Axis Bank, SBI ( support likely around 2680-2700) and RIL. Some others that are looking positive are Sterlite, Indusind Bank, ACC and Sobha.
Nifty has immediate support around 5440, 5415 and then around 5375-80.
Monday, February 21, 2011
Last Hour Buying Pushes Up Nifty
Markets opened with a slight negative bias and traded in negative territory for all but last 90 minutes. Nifty dropped to just around 5400 before some strong buying in key heavyweights. IT bigwigs TCS, Wipro and Infosys were the ones that really kick started the recovery and later the others like SBI, RIL and L&T too joined in. RIL came out with its tie-up with BP after the market hours and that should help market to retain the positive momentum. RIL stock should have a positive impact and it is expected to regain four figure mark. SBI has also been resilient and is likely to move up towards 2835-2850. L&T opened on a positive note but then struggled to sustain higher levels and dropped to around Rs 1610. But the rebound from these lower levels suggests that the stock has retained neutral to positive bias and could move up to around Rs 1720-25 and then even to around Rs 1765-1775. Overall, Nifty has found support just around 5400 and it looks likely that Nifty may not break 5375-5400 ahead of Union Budget. On the upside resistance could be seen as the markets heads higher to around 5650. Some of the banking stocks like SBI, HDFC bank, Syndicate Bank, Allahabad Bank, BOB, BOI and IOB could see more upside. Others that are looking positive are Welspun Corp, HDFC, Educomp, Sobha, Bajaj Auto and JSW Steel.
Saturday, February 19, 2011
Markets Brace For More Surprises
The ongoing 5 day rally was cut short abruptly and violently on Friday as Nifty slipped more than 150 points from its intraday peak of 5600. Nifty had rallied another 50 points in the morning session before selling in most heavyweights pushed the indices lower. Selling was seen across the board as bears pounced upon the opportunity. The infra and realty were the first to lose ground but even the banking counters encountered a drubbing. Still, Nifty ended the week with a gain of around 2.8%. Banking index emerged as the biggest gainer with Capital gains and metals index following closely. All sectors finished the week in green. But, as we enter the expiry week for the Feb series the momentum may have shifted towards the bearish scenario as the volumes on Friday were huge. 5350-70 would be the first significant support zone on the downside and while it was broken without much sweat, it is expected to provide some strong support this time around. But more than the technicals, it’s the other happenings that could impact the markets. Monday happens to be the beginning of Budget session and traders and investors would be watching it with anxiety and nervousness. If the parliament is not allowed to function properly then it would provide more fodder to the confident bears and would be a big negative. Then, the CBI enquiries into 2G scam is another event that’s causing much nervousness and there’s always a question hanging in air, ‘who’s next’. Even Friday’s session was hot on various rumors and that may have added to the unwinding/short selling. And then, we have not even touched upon the various international events, be it Middle-east crisis or tightening by China. So, overall next week is expected to be extremely volatile and it would be foolhardy to anticipate anything. As for technical levels, as mentioned earlier 5350-5370 should be the first hurdle for bears while more support is seen around 5280-5300. Drop to the second support could be utilized for some bargain buying in banking and Capital Goods/infra counters. On the way up, 5510-25 would be the initial hurdle while strong resistance is likely around 5575-5610.
Thursday, February 17, 2011
Banks & Capital Goods Push NIfty Up
After hesitating around 5500 for couple of days and even in the early part of session Nifty finally moved decisively past 5500 and shut shop around 5550. Banks and Capital Goods heavyweight helped the bullish cause as stocks like HDFC bank and L&T pushed for higher levels. IDFC, Suzlon, Bharti, HDFC, Tata Steel and M&M were other significant index gainers. The breadth was positive as more sectors and stocks participated in the rally. Some of the prominent gainers were Sobha, Tata Global, Patel Eng, Jain irrigation, Century, IOB, Educomp, Escorts, Tech Mah, Mphasis, LICHsg, IVRCL, Al Bnk and REC. Few that missed the list and eneded up on losers’ list were Unitech, Sun TV, IBReal, Fortis, Auro Pharma, GMR Infra, HCL Tech, Gail and Wipro.
Nifty managed to stay above 5450 and finally moved higher to close just around 5550. We have seen around 7% rise in 5 sessions. There is likely to be some resistance around current levels of 5550-75. But, the fact that market held the levels of 5450 and consolidated around 5500 for couple of sessions suggests that after a brief correction/resistance Nifty could move higher to challenge the next crucial levels of around 5625-40. Banks continue to lead and that is good news for bulls. HDFC bank has seen a nice up move and could move further to around 2220-30 before experiencing some resistance. SBI has more headroom as it could target 2830-40 and then 2910-30 in coming sessions. It finds significant support at lower levels around 2730 and then 2685-90. LIC has given a breakout on daily charts and could be headed higher to Rs 215 and even Rs 240. Rs 188-193 becomes a strong support level in the short term. Others that are looking good are HDFC( above 653), Indusind Bank, Allahabad Bank, Andhra bank( above 152), ABG ship and L&T.
Wednesday, February 16, 2011
Nifty Holds Levels
Markets opened on a flat note and for the whole day Nifty traded in a range of 50 odd points ( 5508 on the higher side and 5463 on the lower side). It oscillated up and down on alternate bouts of buying and selling but could not breakout on the either side of the range. Market response to Tata Steel’s results were positive as the stock closed on a strong note at Rs.641 and it appears that the stock has the potential to cross its previous swing high of Rs.664.50. The other stocks which ended with minor gains were Titan, L& T, Axis Bank, Jindal Steel and Bombay Dyeing. On the other hand stocks which were on the losing side were BHEL, Dr Reddy, HDFC and M&M but the losses were of a very minor nature. A few cash stocks like TTK Prestige, Jindal Polyester and ARSS Infra closed with minor gains with low volumes.
As discussed yesterday, we expect the markets to inch up in a slow and steady manner till the presentation of the budget. Nifty is expected to consolidate between 5450 on the lower side and 5550 on the higher end for some time and once it is able to move beyond 5550, it can move upto a level of 5650-5700. As long as 5450 level is held it would be prudent to trade with a positive bias.
Tuesday, February 15, 2011
Banking Stocks Make Hay As Nifty Consolidates
Markets opened on a flat note and after a small decline of 40 odd points in Nifty in the first two hours it bounced back smartly to cross the crucial resistance level of 5500 in the second half. However, it witnessed profit booking around 5500 levels and finally managed to close at a respectable 5481 levels. From the low of 5177 made on 11th Feb, Nifty has rallied to an intraday high of 5506.50 ( recovery of 329 points). Since the recovery has been too swift and sharp, Nifty might consolidate between 5400 and 5550 levels for some time before takes any fresh directional move. Banking Stocks especially the likes of SBI, ICICI Bank, HDFC Bank and Bank of Baroda were the ones which appreciated the most during this rally. Reliance showed a lot of strength in today’s trading and now if it is able to trade above Rs.950, then it will help the recovery to gain further steam as it has the highest weightage in the Nifty. ADAG stocks were in limelight as Reliance Capital and Reliance Infra saw huge volumes. Capital good sector stocks like BHEL and L&T saw selling right from the morning and both of them lost around 2% each.
Monday, February 14, 2011
Nifty Bounces Back and How!
After a long time did we see strongly up trending day as Nifty not only managed to sustain the positive gap, it also built on the gains as the day progressed. Nifty galloped more than 150 points and closed at the highest point of the day. All round buying was see as most sectors finished the day with sharp gains. Banks rallied sharply for the second successive and Capital Goods sector too saw solid gains. L&T was the biggest gainer amongst the index heavyweights. Some of the big movers for the day were United Spirits, PTC, TVS Motors, Tech Mah, Educomp, Apollo Tyres, Jet, IVRCL Infra, Balrampur Chini, GMR Infra, HDIL, Opto, Havells, JP Associates, Welcorp, KFA, Bajaj Hind, Suzlon, BGR Energy, Jindal SAW and KTK bank. Breadth was extremely positive and for a change it was difficult to spot losers though some pressure was seen in RIL, DLF and Rcom.
Such strong and sharp rebound has been witnessed for the first time since Nifty started its southward journey from the levels of 6180-6200 in the first week of January. In the two days Nifty has bounced back almost 300 points from the intra day lows of Friday. Nifty is likely to face resistance around 5510-25 and could retreat from around these levels. Most of the stocks that have seen sharp rebounds are approaching decent resistance levels and one needs to be a bit cautious in taking long positions in these. Certain stocks that could still see higher levels are Welspun Corp, HDFC bank( to around 2145-2160), Sesa Goa, TCS and REC.
Sunday, February 13, 2011
A Positive Friday After A Long Wait
Finally, we did get a positive Friday after 5 consecutive down (4 out of 5 were severely down) Fridays. It was again a combination of short covering and value buying at sub 5200 levels. The sentiments were again low as IIP data was at its lowest in 20 months. We believe that more than just short covering, it was more to do with value buying by HNIs and institutions that helped the indices to claw their way back up. From a high of 6181 in the first week of January we have lost more than 1000 points in about 5 weeks. Nifty has consistently made lower lows and lower highs and momentum has been so strong that even slightest of rebound have been sold into. Most of the sectors have suffered but the bears have been particularly harsh on infra stocks in this leg. Most of the infra stocks have more than halved in value over last 4-5 weeks. But, the question is whether we have hit a sustainable bottom? It would be too early to take a confirmed call on that as it usually is. Nifty has lost almost 18% and around 5400 also we suggested that Nifty had lost almost 15% from recent top and we could be nearing a sustainable bottom. But, that was not to be as Nifty went through the support at 5350 as momentum picked up on the downside. Technically, we are still in the lower low, lower high spiral. Nifty has initial resistance around 5385 and then significant one around 5440-50. Banking stocks bounced back sharply on Friday and led the overall rebound. Positive divergence in leading indicator, RSI is visible in banking heavyweights like HDFC bank, Axis and SBI but many mid cap banking charts still may not be out of woods. Tata Motors came out with very good numbers just at the closing bell and might see a positive open on Monday. However, it might encounter resistance around 1225-1230. TCS has strong support around 1070-80 and could see a technical rebound from current levels. Renuka sugars that also came out with results on Friday is looking weak and a breakdown is possible below Rs 82. One needs to keep a stop below Rs 82 for all long positions. Hindalco is another one that has displayed weakness over last 3-4 sessions and needs to trade consistently above Rs 220-222 to retain the bullish bias. Certain infra stocks like LITL, GMR Infra, Reliance Infra and IVRCL may have seen what we call climactic selling as they witnessed huge volumes last week. But while it may suggest that these stocks may have seen intermediate bottoms it may not necessarily mean an immediate upside. These stocks could enter a consolidation phase before making an attempt to move higher. To summarize, while we may have some evidence of a market that could be bottoming out it would be too early to take a firm view on that. For traders wishing to go long, it would be better to buy call options or to hedge long futures with put options to minimize risk.
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