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 13th 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.
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