Negative Sentiments Continue in Markets

Markets opened on a negative note and traded in the negative territory for the better part of the session. Nifty slipped to as low as 5416 in the early trades as the sentiments turned hugely negative. Some value buying in some heavyweights coupled with some short covering helped indices to rebound in the later half. Nifty retraced almost all its losses and managed to close above 5500. The index was largely helped by the likes of ONGC, L&T, Bhel, SBI and Maruti. Banking stocks also saw value buying at lower levels and good numbers by Canara Bank and Andhra bank also helped in boosting the sentiments a bit. Siemens was the biggest gainer for the day as its German parent announced a open offer at Rs930 per share. The sentiment rubbed off on other such companies like ABB also. Prominent gainers of the session were Can bank, LITL, Crompton Greaves, Ashok Leyland, Federal bank, BOB, ONGC, DRReddy, Indusind, Titan, Gail, UBI and Bhel. The infra and Realty counters continued to slip and were amongst the top losers. Jain Irrigation lost almost 11% on long unwinding. Losers’ include HDIL, Unitech, JP Associates, Jet, Bata, HCC, KFA, BGR Energy, Bajaj Hind, IVRCL Infra, Escorts, REC, PFC and Voltas. 

Nifty recovered from the day’s lows and closed above 5500. Banking and metal stocks witnessed some buying at lower levels. Even Auto counters saw some buying ahead of monthly sales figures. Broadly, we believe that while Autos might see some rebound, the overall technical picture is not looking pretty for most Auto stocks. Rebound should be utilized to lighten long positions. Banks, however are looking much better technically and could be accumulated in smaller lots. However, It is unreasonable to expect a painless rise in any stock considering the kind of down momentum we have been witnessing. Stocks as well as indices are likely to see selling pressure at every rise and that might make any climb upwards difficult and slippery.

Nifty has immediate support around 5430-50 while resistance is likely around 5560 and then around 5630.

Nifty Continues Downward Trend In January

January has a reputation of being a bear-friendly month and Jan of 2011 has only enhanced this reputation as we are down almost 10%, with still a day to go. Well, this thumb rule has surely worked for our markets. Nifty continued its southward journey as it lost over 3% during the expiry week and the carnage spilled over to the first day of new series. All sectoral indices were in red with Realty, Health Care and Auto being the worst impacted. Least impacted on relative basis only were IT and Banking index, both managing to lose less than the Sensex and Nifty. This continued downward spiral has brought as back to around 5500 for Nifty and around 18000 for Sensex. Negative markets have had a negative impact on sentiments and suddenly it seems that nothing could go right for India. This is in stark contrast to late October- early November when it looked as if nothing could go wrong for India. Market is down almost 14% from its recent peak at around 6350. What next? Technically, we are in oversold territory for mainline indices as well as for several heavyweights. Nifty has multiple supports between 5400 and 5550. This whole range of 5400 to 5550 provided stiff challenge for almost 11 months earlier when Nifty was trying to move higher. We believe that now this range should provide atleast a temporary respite for the markets and while it’s almost impossible to pinpoint the levels of support it does look unlikely that we would trade below 5475-5500 for a sustained period. Whether this could prove to be temporary respite or a sustainable support could only be ascertained only later. Banking stocks have seen some consolidation over last two weeks and would be amongst the first ones to see a sustainable rebound. RIL did not find any support around 950 as was our expectation and has seen huge buildup in short positions. It would be prudent to wait for it to stabilize above 950 before taking any fresh long positions. Sesa Goa is showing strength and could be bought on declines. 

Nifty is likely to find support around 5450-5480 while immediate resistance is at around 5620 and then around 5700.

Nifty Continues The Losing Streak

Last day of January series proved to be yet another bad one for bulls as Nifty lost over 80 points. January series saw Nifty lose around 500 points as the sentiments turned extremely negative in the short term. This has come in a global back drop that remains neutral to bullish. In fact, Dow made almost 30 months high yesterday as it crossed 12000. Even today most of the global markets were trading higher but local markets had no such luck as despite a positive start, Nifty continued to lose ground on long unwinding. Most heavyweights witnessed selling on almost across the board weakness. DLF, JSW Steel, Sterlite, M&M, Ranbaxy, HUL, Bharti, Bhel and ICICI bank were some of the heavyweights that contributed to the falling indices. Some of the other prominent losers were Srei Infra, LITL, Core, Jindal Holding, Indian Info, IDBI, IVRCL, Tata Chem, Lupin, HCC, Century textiles, Bajaj Hind, Pantaloon, Yes Bank and Unitech. Cement heavyweights ACC and Ambuja as well as Tata Motors were some of the heavyweights that bucked the overall trend and finished with decent gains. Few others to post gains were TV18, BRFL, Nalco, Alok, Areva, Sesa Goa and TCS. 

Nifty made a new swing low at 5595 and has maintained the trend of lower lows and lower highs. The momentum remains with the bears as even on the last day of January series market could not attempt even a small technical rebound. More downside is seen in coming days and Nifty might find it difficult to scale 5750-60. Support is seen around 5520-5540 on weekly charts and some technical rebound could materialize from around these levels. Sector- wise it is difficult to point out the stronger ones but it looks probable that banking sector could see buying at lower levels. Some stocks that still qualify as buy on dips are Sesa Goa, SBI, Sterlite, ICICI bank, Alok, Axis, HDFC bank, RIL, Bharti, Cipla, Praj and Petronet LNG. BUY on Dips or on bad days is the key here as it would be imprudent to play trade momentum on the buy side as the momentum remains with the sellers.

Nifty now has immediate support around 5570 and then around 5520-35 while resistance is at 5680 and then 5740-50.

RBI Policy Induces Heavy Selling

Market gave up all its early morning gains on account of heavy selling in key heavyweights after the announcement of RBI policy. RBI raised interest rates by only 25 bps but remained committed on tightening as inflation control remained its top priority. Banking stocks rallied initially but failed to sustain higher levels. The Auto counters also encountered selling in the late trades. Nifty lost more than 100 points from its intraday top and closed below 5700. In fact, Nifty gave up all its gains of past 3 sessions. Global cues are positive and that may keep some positive bias as the markets re-open on Thursday. Nifty is likely to see expiry just around 5700. Banking stocks have seen some technical rebound and it seems that there is still some steam left in the rebound. One could utilize any weakness to accumulate the banking counters like SBI, ICICI, Yes Bank, BOI, BOB and Allahabad bank.  Auto stocks remain weak and are a typical sell on rallies stocks. Tata Motors has some support around 1150 and close below 1150 could further weaken its technical set-up. HUL lost more than 5% after its quarterly numbers. Stock closed below 290 and sustained trades below 290 could mean more weakness in this heavyweight. RIL finds some support around 950 and has held this support for past 24-30 months. Positional traders could buy RIL on weakness with perspective of 4-6 weakness. Tata Steel has some resistance around current levels of 655-660. Short covering might sustain it around current levels on Thursday but some correction is expected after January expiry.

Nifty has immediate support around 5650 and then around 5610 while resistance is at 5740-50.

Markets Show Positivity Ahead of Credit Policy

Markets opened on a strong note primarily because better than expected results from SBI and managed to hold the gains as ICICI too posted impressive numbers. Banking stocks like Bank of Baroda, HDFC Bank, PNB and Yes Bank too saw strong buying because of improved sentiment in the banking sector. Reliance was slightly subdued because it could not beat the street estimates. The market breadth, indicating the health of the market, was strong. On BSE, 1,701 shares advanced while 1,174 shares declined. A total of 103 shares remained unchanged. Tata Steel rallied impressively and closed on a strong note. Market’s response to tomorrow’s credit policy will be extremely critical as the strength of banking stocks is extremely important for the market to rally further. BHEL was surprisingly strong and L&T’s strong closing also played a small role in boosting the sentiment of the market.

Spot Nifty has strong support at 5694 and 5674 levels whereas it will face resistance around 5790 and 5835 levels. We feel that the market has the potential to rally to around 5835 levels but for that tomorrow’s credit policy should not disappoint the market.

Nifty Looking For Support !

Nifty moved up sharply in the latter part of the session to close above 5700. For greater part of the session market traded in the red as yet again a few heavyweights like RIL put pressure on indices. Nifty slipped below 5650 mid session before short covering coupled with some value buying in banking counters improved the sentiments. Banking heavyweights like ICICI bank and HDFC bank were amongst the prominent gainers and that boosted the sagging indices. Even SBI that made a new recent low at 2463 recovered sharply to claw its way back above 2500. Other mid cap banking counters too continued to move up. Some of the prominent gainers for the day were Orchid, Indian Bank, Dena Bank, IDBI, Syndicate bank, IFCI, IOB, Al Bank, Can bank and Central Bank. RIL was bogged down yet again by various rumors as it slipped to around Rs 950. It recovered a great part of its intraday loss towards the close but still ended the day in red. Some other losers were Crompton, United Spirits, Gail, PTC, Jain irrigation, Petronet, ITC and ONGC.

Nifty bounced back from just around the previous recent low at 5628 and recovered smartly to close above 5700. It seems that market is finding support around 5630-5650 and could again try to move past 5740-50. Banks are finding some buying around current levels as most of the banking results have been good so far. That is perhaps leading to some kind of short covering ahead of credit policy on 25^th Jan. Even a reasonable technical rebound in banking counters could support indices. Allahabad Bank, Indusind Bank, Central bank (above 174), IOB, Syndicate Bank, Can Bank ( 602) and Yes Bank( above 278) could see reasonable upside from current levels.

Nifty has immediate support around 5650 and then around 5610 while resistance is at 5740-50.

Selling in Key Heavyweights Keeps Nifty in Check

Nifty failed to make any headway beyond 5750 and despite some positive cues from overseas markets as well as gapped up opening, Nifty succumbed to selling at higher levels to slip below 5700. Broad market was positive but Nifty was affected negatively by selling in key heavyweights like RIL, SBI and Infosys. Metal stocks were positive and buying was seen in stocks like Tata Steel, Hindalco, SAIL, Sterlite, Ispat and JSW Steel. HCL Tech surprised the markets positively and was one of the leading gainer for the day. Some of the mid cap banking counters moved higher on account of some short covering as did some Realty counters. So, in the gainers list we had stocks like Can Bank, LIC Hsg, Yes Bank, OBC, Dena Bank, Andhra Bank, DLF and Sobha. 

Nifty faltered around 5740-5750 as key heavyweights witnessed selling. It seems that Nifty is trying to stabilize around 5650-5700 but broadly the momentum would remain with the sellers as long as Nifty remains below 5750. Heavyweights are showing divergent trends and that is keeping Nifty in check. Short covering bout could continue to lift some mid cap banking counters and some more upside is likely in stocks like Dena Bank, Andhra Bank, Allahabad Bank and the likes. But still it would be too early to call a bottom in these counters. We continue to believe that bottoms would first be visible in bigger banking counters like SBI, ICICI, Axis and HDFC Bank. Hindlaco and Sterlite have seen good moves in last two sessions and both are approaching significant resistance at 240-42 and 186-89 respectively. Sesa Goa could see more upside if it manages to move past 328.

Nifty has immediate support around 5650 and then around 5610 while resistance is at 5740-50.

TCS Results Boost Nifty

TCS results ensured a gap-up opening and despite some volatility during the session market managed to stay in the positive for whole session. Intra day short covering, in fact lifted the indices during last 60 minutes as Nifty closed almost at the highest level of the session. TCS was up more than 5% as it hit a new high. Opto Circuits came out with good results and was the biggest intra day gainer as stock moved up by more than 10% on huge volumes. Some pharma counters too witnessed buying. Some of the top gainers for the day were Polaris, Praj, Indusind Bank, Sterlite, Sun Pharma, Orchid, Ambuja, JSW Steel, Ranbaxy , Axis Bank and JSPL. Exide results proved a big dampener for the stock as it lost more than 10% on heavy volumes. Some other stocks that continued to struggle were Bata, Zee, R-Infra, IRB, HCC, BOB and IVRCL Infra. Breadth was positive while volumes were on the lighter side.

Nifty managed to claw its way back above 5700 on the back of good showing by TCS. Nifty closed almost within the resistance zone of 5730-40. Positive global cues could ensure further upside to around 5785-5810 level. It still looks like a relief rally and one needs to be extremely cautious in stock- selection to play this rally. Pharma and IT are the ones that are throwing up buying opportunities and even the metal stocks remain in the buy on dips category. Petronet LNG is repeatedly finding resistance around 130-132 and sustained trades above 132 could propel the stock higher to around 145 levels. IDFC could see a technical rebound to around 167-169 if it sustains above 160 while some upside is likely in Indusind Bank( above 240), Orchid Chem, NMDC( above 269) and Ranbaxy.

Nifty has immediate support around 5650-70 and then around 5610 while 5780-5810 is likely above 5745

A Quiet Day in The Markets

It was a relatively quiet day for the markets as Nifty tried to stabilize above its 200 DMA. But, the disquiet and nervousness was still visible as far as stock and sector specific moves were concerned. So, while IT held the Nifty to neutral territory, metals, Realty and Capital Goods stocks were weak. L&T numbers were not liked by the street as stock continued its southwards journey. Stock is now below Rs 1700. ADAG stocks responded negatively to the SEBI ruling as all the group stocks took a knock. R-Infra was down almost 8% and is now trading consistently below the May’2009 levels. There was no respite for realty and infra stocks. So, while Nifty managed to close without any damage, majority of the actively traded stocks were not as lucky. TCS came out with better that expected numbers after the market hours and might trigger some short covering in broad market. But, still the trend remains tricky and its likely that we might slip below the 200 DMA and 5600. The current weakness seems to be more on account of bull liquidation than pure short covering and that could largely explain any strong short covering rebounds so far. Market and some of its heavyweights continue to trade in oversold zone and still not much of positive divergence in momentum indicators is visible in these charts. So, charts are not showing any signs of bottoming out and any technical rebounds could prove to be short-lived and would find resistance at even slightly higher levels. Nifty’s rebound could falter around 5730-40. Most of the better results are also not finding favors with marketmen as was witnessed in Indusind and to a lesser extent in Axis Bank. Axis could rebound to around Rs 1250/Rs 1285. Overall, there is not enough technical evidence to suggest that the pain could be over.

Nifty has immediate support around 5610( around 200 dma) and then at around 5550-60 while resistance is likely around 5730-40.

Another Uninspiring Week For Nifty

It was almost a repeat of previous Friday as Nifty plunged over 100 points. The fall looks more menacing if one considers that Nifty had in fact moved up by almost 75 points at one point. It was a panic like situation as sell off gripped almost all sectors and stocks. Nifty had found firm support around 5700 on numerous occasions in the past but it was not to be this time as Nifty slipped below 5700 and closed around 5650. This capped the overall weak show during the week. Nifty has plunged around 9% in past two weeks and this time Indian market has really seem to have de-coupled from the global markets, atleast in the near term. Most of the global markets have gone up in past two weeks and its only Indian and Chinese stocks that have been singled out for selling. The local factors have really caught up and foreign funds are suddenly finding valuations back home much more tempting. The selling that began with the interest rate sensitive sectors has spread to almost all the major sectors. So, Capital Goods was the worst performer last week along with Oil Gas, banking and Realty. IT reacted to somewhat muted performance as well as guidance by Infosys. HDFC came out with good results but was largely ignored as markets plummeted on Friday. This could be the trend in coming weeks as macro factors take precedence. Technically, Nifty has broken significant support at 5700 and could plunge further 100-125 points from current levels. 5830-5850 could now become a new ceiling for coming weeks. Overall structure is weak and its not advisable to catch the falling knife. Market might need to stop falling and then consolidate and currently even the first step (that of fall) does not seem to be over. It would be good idea to take note of the good quarterly performances and then buy these stocks during the consolidation process. For traders there would be technical rebounds but the trend is clearly down and it would be a better idea to use rebounds to trade on the short side.

Nifty has immediate support around 5570 and then around 5520-30 while resistance is likely around 5760-65 and then 5810-20.

Infosys Leads As Nifty Plunges

Infosys numbers came as a disappointment and the technical rebound that showed some promise yesterday just fizzled out. Nifty opened in red and turned deeper into red as the day progressed. The inflation figures did not look good and the banking stocks that were also beginning to look good for at least some technical rebound met with heavy selling pressure. In fact Bank Nifty was down more than 3.5% as stocks like ICICI, SBI and HDFC bank moved lower. Infosys lost more than 5% and hurt the sentiments towards the whole IT sector. Some of the biggest losers for the day were Infosys, Praj, HPCL, OBC, PNB, Pantaloon, IOB, Titan and LIC hsg. Realty stocks surprisingly did well as most of them closed in the green. Some others that bucked the trend were Adani, Ambuja, Ultratech, GE Shipping, Havells, Grasim and Exide. On the whole it was a disappointing day as Nifty had yet another triple digit fall.

All the hopes for a tradable rebound were dashed early in the session as Infosys disappointed. More disappointing was the fact that banking heavyweights just failed to develop any followup momentum and on the contrary were amongst the top losing counters. Bank Nifty is back to its recent lows giving up all its gains of past two sessions in a single day. Market continues to witness volatile sessions and is basically trading violently between 5700 and 5850. Stocks are having alternative bouts of buying and selling and it is increasingly becoming difficult to find even marginally high probability trades. Break below 5700 could trigger fresh selling and might take Nifty lower to around 5575-5600. Considering the choppiness and volatility it would be better to wait for somewhat clear signals before taking any fresh trades.

Nifty finds immediate and crucial support around 5690-5710 while resistance is likely around 5835-5850.

Market Volatility Continues

It was yet another volatile session like yesterday but the outcome was much better. Markets reacted adversely to the dismal IIP data but then recovered yet again from around 5700 to stage a remarkable recovery. It was more or less across the board recovery but the interest rate sensitive sectors were the ones with strongest rebound. Banks moved up smartly as did the Auto stocks. Even the beleaguered Realty sector too witnessed a decent rebound. Nifty rallied almost 170 points (almost 3%) from the day’s low. Biggest gains were seen in Suzlon, Orchid, Renuka, Titan, Praj, Sterlite, Bata, Unitech, Alok and HOEC. Capital Goods and OMCs however remained under pressure and were amongst the day’s losers.

Nifty tested 5700 twice in last two sessions and on both occasions a smart recovery was witnessed.  By closing above 5840 market has raised the probability of carrying the rebound further to around 5950-5980. Volatility might still persist as market reacts to fundamental factors like inflation data and infosys numbers. Banks, as mentioned yesterday should continue to lead the rebound and more upside is likely in banking heavyweights followed by some other banking mid caps. The Vedanta group stocks, sterlite, Sesa and Hind Zinc are looking much better technically then Tata Steel and even Hindalco. Sesa might see a strong breakout above 345. Amongst Autos M&M has a better technical structure and could move to around 775. Some others that might see more upside are Praj, IDBI( above 154), Central bank( above 170), IOB ( above 137), HDFC ( above 685), IFCI and Union bank.

Nifty finds immediate support around 5810 and then around 5760-70 while some resistance is likely around 5910-25.

A Volatile Day For Nifty

It was an extremely volatile day of trade as Nifty fluctuated wildly, particularly in the last 45 minutes of trade. Nifty dropped almost 100 points to slip below 5700 and then recovered all its losses in the last 15-20 minutes. Banks saw some short covering and were amongst the first ones to recover. The large banks in particular saw some buying at lower levels and helped the indices to stage some comeback. SBI, Axis, ICICI, Indusind, Yes Bank and PNB were amongst the prominent gainers. Some metal counters were also in demand and gains were seen in Hindalco, Sesa Goa and Hind Zinc. JSW Steel however was under immense pressure as it lost over 5%. RIL and most realty counters were also under pressure. Some of the prominent losers were Unitech, GMR Infra, HDIL, Orbit, Orchid, Ispat and Suzlon. IT heavyweights too witnessed some profit taking ahead of Infy’s results on 13^th Jan.

Nifty traded around 5800 for major part of the session before witnessing extreme volatility in last 45 minutes. Nifty bounced back smartly and swiftly from just under 5700. The day’s trading pattern suggests that we may have hit at least a temporary bottom around 5690-5700. Banks could lead a sustainable rebound that might see Nifty move to around 5900-5930 over next 3-4 sessions. Bank Nifty is also finding some support around 10700 and might stage a tradable recovery. It could move to around 11300-11400. Banks have fallen between 25-40% over last 5-6 weeks and might recover 8-12% in this rebound. But, this should still be treated as technical rebound only and one should use this rebound to lighten positions. Some stocks that could see some upside are Sesa Goa, Hindalco (to around 240), Bharti, BOB, SBI, Yes Bank, ICICI bank, REC, Praj and M&M. Any long trades taken in these counters should have a stop loss just below today’s lows.

Nifty finds immediate support around 5730-40 and then around 5685-90 while move past 5845 could take Nifty to around 5925-30.

Selling Dominates the Market

It was a terrible open to the new week as Nifty tumbled more than 150 points. There was no let up in selling momentum and there was all round selling pressure. Breadth was extremely poor as selling spread across almost every sector. Worst hit were the usual ones like Realty, banking and Autos while Capital Goods heavyweights too suffered sharp sell offs. Both L&T and Bhel were worst impacted as both saw huge institutional selling. FIIs have turned heavy sellers and despite some support from DIIs stocks continue to tumble. Banking heavyweights that looked like finding some support on Friday as well as during the morning sessions, lost ground as the day progressed and Bankex lost over 3%. Some of the worst performers were Praj, HDIL, Sintex, United Spirits, Renuka, Bajaj Hind, Syndicate bank, Rolta, Adani Ent., Alok, LIC Hsg, Aban, Havells, B.Chini, Apollo Tyres and Onmobile,all losing over 5% each. Gainers were difficult to spot and only a few like ACC, Infosys and Dabur managed to stay in the green.

Nifty has lost over 300 points in two trading sessions and 5700-5720 is being put to test again. It had held twice in past two months but the severity and the momentum of the fall suggests that we may not be third time lucky. There could be some technical rebound from around 5700 but overall pattern doesn’t inspire much confidence. There is usually a one-sided move when FIIs turn heavy sellers and the rebounds are usually short lived. Same pattern could be unfolding right now as despite heavily oversold indicators Nifty and heavyweight stocks have not managed any tradable rebound. These oversold indicators could help market to see some relief rally soon. We believe that a rebound is likely from around 5675-5700 levels. But these rebounds would be difficult to trade as the overall direction remains down. It would still be prudent to stay out and let the market stabilize, whenever that happens.

Nifty finds immediate support around 5675-5690 and resistance is likely around 5840 and then around 5885-5910.

Positive Global Cues Fail To Prop Up Markets

Markets failed to respond to the positive global cues as local factors dominated the proceedings. Food inflation came in at a high of more than 18% and that largely spooked the marketmen. The interest rate sensitives that were already under pressure further bore the brunt on fears of impending RBI action. Banks, Realty and Autos continued to lose ground on sustained selling. SBI and ICICI bank fell to almost 4 months’ low. Bajaj Autos and Tata Motors led the decline in Auto stocks. Fertiliser stocks expectedly reacted negatively to the postponement of Urea policy and were amongst the leading losers for the day. Chambal and NFCL lost more than 7% each. Some other names on the losers’ list were BGR Energy, Escorts, Ultratech Cements, Praj, Ambuja, TVS Motors, EKC, Unitech, HOEC, Dish TV, BOB, Bombay Dyeing, JSW Steel and Nagarjuna construction. IT heavyweights did provide some support to the indices as did RIL. Even some banks also managed to buck the overall negative trend and posted some gains. Some prominent gainers were Jain Irrigation, KTK Bank, Sun Pharma, Ind Hotels, Jet, Hindalco( new high), TCS, IRB, Petronet and Bharti.

Nifty continued to slide and severely tested the support at 6030-6040 and barely managed to close above this zone.  Market has retraced around 33% of the rally from recent lows of 5720 and there is a high probability that it would find some support around current levels. Banks have been under pressure for almost 6 weeks now and current down leg could be the last one before a sustainable support and rebound is seen in most banking counters. This might coincide with the expected hike in interest rates by RBI. What this means as a trader is that one should be prepared to close shorts and perhaps go long in banking stocks once the hike is announced.  Some other stocks that look good for next few sessions are Ind Hotels, Hindalco, Petronet, IRB( above 234), Bharti, RIL, Tata Steel and NCC.

Nifty has immediate support around 6025-30 and then around 5980 while res is around 6085-6100.

Weakness Persists in Banks and Autos

The corrective move gathered momentum on further weakness in interest rate sensitive sectors like banks, realty and Autos. Bankex shed more than 2% as banking counters capitulated further. ICICI bank , HDFC bank and SBI continued to slide downwards as did other smaller banking counters. Auto stocks were also under a bearish spell as 2-wheelers led the decline. Bajaj Auto and Hero Honda lost close to 4% each. FMCG turned out to be the best sector for the days as both ITC and HUL managed to close in the green. RIL was up for better part of the day but shed all its gains as higher levels attracted profit taking. Jindal SAW was the biggest gainer amongst the F&O counters as it gained almost 7% on extremely healthy volumes. Some other that bucked the overall negative trend were Mundra, Piramal Health, Jain Irrigations, HCL Tech, Sesa Goa, Gail, Asian Paints and Tata Power. Nifty slipped below 6100 and closed around 6080.

Nifty is likely to find support around 6025-6040 and its highly probable that we might trade between 6000 and 6150 for next 7-10 sessions. Weakness persists in banking and Autos while strength remains in Metal, IT, FMCG and Pharma. Banking has consistently underperformed for past 4-5 weeks now and some more downside cannot be ruled out completely. BankNifty that is trading around 11300 has short term support around 10800-10900., while stiff resistance is likely around 11600. Autos are also looking weak and in fact technical patterns of Auto majors is a bigger worry than banking counters. Bajaj Auto, Maruti, Ashok Leyland and even Tata Motors are looking weak. On the other hand, IT heavyweights continue to look good and more upside is likely in TCS, Wipro and HCL Tech. Some correction was seen in Tata Steel but it remains in an uptrend and stock could rebound from around current levels. HUL is sustaining above 320 and could target Rs 345-350 over next 2-3 weeks.

Nifty has immediate support around 6030-40 and then around 5980.

A Good Beginning for the New Year 2011

2011 got underway on a positive note as markets posted reasonable gains. Nifty shed almost half its intraday gains towards the close but still the day turned out to be a good one. Metals led the rally with Tata Steel, Hind Zinc, Sterlite, Sesa Goa and SAIL posting good gains. The metal mid caps performed even better as we saw big gains in stocks like Guj NRE, Tata Sponge, Timken, Tinplate , Uttam Steel and other such stocks. ADA stocks further extended their rebound and RCap, R-Infra and R Media managed smart gains. The Auto stocks began on a positive note but the rally fizzled out as the day progressed as heavyweights Bajaj Auto, Tata Motors and Maruti witnessed selling pressure at higher levels. Escorts and Ashok Leyland, however closed on a positive note. Some of the infra names like Nagarjuna constructions, GMR and IVRCL Infra saw some value buying and were amongst the top gainers for the day. Some other prominent gainers were JSW Holding, Hexaware, Godrej Ind, Polaris, Srei Infra, Ind Hotels, HOEC, 3-I infotech, B Chini, Bhushan, Voltas and Punj Lloyd. B.Auto, REC, Uniphos, Wipro, IBReal and Patni were amongst the few that ended the day in red.

Nifty faced some resistance around 6180 and we believe that the 6180-6220 zone could provide stiff resistance in the short term. The trend remains positive as of now but the bullishness might spread to the non-index counters even as Nifty consolidates/corrects. Mid cap IT continues to see momentum as was witnessed even today. Polaris has seen a technical breakout above 185 and sustained trades above 185 could take this stock higher to around 198-205. Metals remain the strongest amongst the heavyweights and more upside is likely in Tata Steel. Both Sesa Goa and Sterlite are at interesting levels as both face resistance around 345-349 and 192-195 respectively. Sterlite in particular has traded in this broad range of 160  to 195 for past 7-8 months now and a breakout above 195 could mean a potential targets of around 225-230. Some others that look good for next 5-7 days are ind Hotels, IVRCL Infra, Voltas, Sintex, Educomp, ABB and B. Chini.

Nifty faces resistance around 6200 while support is seen at 6120 and then around 6150-60.

A Nice End To Year 2010

The final day as well as the week of 2010 capped the last year of first decade of current century with smart gains. 2010 turned out to be another good one for the investors with Sensex gaining around 18%. Despite a few sectors hogging limelight it was a fairly all round show with various sectors outperforming the Sensex. While Auto and banking sector grabbed the headlines as well as media space, the others like FMCG, HC and IT also did equally well. All these sectoral indices were up 30-37% for 2010. Consumer durables was the biggest gainer for the year as the index gained around 68% despite losing some sheen in the last 6-8 weeks. Realty remained out of radar for most investors as it was the biggest loser. Autos and Health care were the most consistent and stable performers while IT took off in the last couple of months. So, as we enter 2011 IT is the one that shows strong momentum. Metals, Capital Goods and Oil & Gas were mostly subdued though metals did show some momentum over last few weeks. So, what now as we enter a brand new decade. We believe that broadly market remains in a decent uptrend and we should see the new highs being made in 2011. First leg of the current bull run was terminated just around the all time highs and we have had a decent correction of about 10-11%.

Market seems to be slowly but surely coming out of that corrective phase even as most investors/traders remain wary of the rally. The sentiment is still negative and the carnage in small and mid caps is largely to be blamed for that. We feel that Nifty could continue to move higher over next couple of months though in almost a similar manner as it has from around 5700 level. A clear change in leadership is seen and sectors like Metals and Capital Goods could take centre stage with IT continuing to move higher. The biggest newsmakers of 2010, Autos, Banking and even Consumer Durables are likely to play a second fiddle and might lead the corrective moves rather than the rallies. Smaller sectors like Sugar, textiles and fertilizers would also be in focus particularly in the next couple of months. So, as it stands now one needs to focus on stocks like BHEL, L&T, Siemens, ABB, APIL, Reliance Infra, Tata Steel, Hindalco, Sterlite, Sesa Goa, Cairns, RIL, Bharti, Wipro, Mphasis, Hexaware, Polaris, Praj, Renuka, B.Chini, Arvind, Alok etc for decent and stable gains. These are just a few names and many new stocks from within these sectors would surely pop up as the trend becomes more visible. Technical patterns of various underperformers of 2010 still don’t provide enough confidence to suggest that these stocks could seek sustained higher levels. But, we surely believe that some of these names might just provide excellent trading and investing opportunities as the Year progresses.

We sincerely wish all our subscribers an extremely profitable 2011!