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.
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