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.

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.

Nifty has immediate support around 5410-15 and then around 5375-80 while resistance is likely around 5485-90 and then around 5530-40.

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.

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.

Nifty has immediate support around 5450-60 and then around 5375-5390 while resistance is seen around 5560-70 and then around 5620.

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.

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.

Nifty has immediate support around 5470-85 while immediate resistance is just around 5560-75 and then around 5620-30.

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.

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 11^th 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.

We expect Nifty to trade in the 5400-5550 band for some time and stock specific action will be more pronounced during this period. One should be prepared to trade both sides of the market for the next 1-2 trading sessions but till budget we are of the view that the market is likely to have a positive bias.

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.

Nifty has immediate support around 5370-80 and then around 5310-25 while key resistance is likely around 5510-25.

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.

Nifty has immediate support around 5225-5240 and significant one around 5150-60 while resistance is likely around 5375-85 and then around 5440-50.

Crisis of Confidence

The damage in mainline indices doesn’t truly reflect the kind of carnage that was seen in many stocks. Nifty showed a cut of only about 1% at the close but a look at the list of losers and the kind of damage, reflects the true story. The whole ADA pack was massacred on account of heavy unwinding. R-infra, RMedia, RCom and Reliance Cap lost between 14 to 20% each on huge volumes. Most of the selling was seen in the last 60 minutes. The selling was not restricted only to this group as there were many stocks that suffered more than 10% cut and that too on big volumes. The list includes Aban, BEML, LITL, Bombay Dyeing, Orbit, Punj Lloyd, Onmobile, IVRCL Infra, Srei Infra, GMR Infra, JP Associates and TTML. Most of the stocks on this list have been under severe bear pressure for past few sessions and had already seen significant erosion in mkt Cap even before today’s big cuts. The list of losers was a big one as breadth was hugely negative. As seen yesterday there were no buyers even at lower levels. There is a clear crisis of confidence at bourses and nobody wishes to even look for bargain buys. Mid and small caps continue to be sold into as reflected in more than 3% cut in madcap index. Few stocks that managed to prop up index were Infosys, M&M, HDFC, HUL and Sun Pharma. 

The kind of deep cuts with very big volumes suggest almost a capitulation kind of situation in various stocks, if not in the index itself. Almost all stocks that suffered double digit percentage losses did that on above average volumes. In some cases like the ADA pack it was almost 4-5 times the average. This has come after a sustained bear trend in most of these stocks. This could suggest capitulation and while it may not be a one- day affair, it does point towards almost selling climax. But, it would be better to look for certain other signs, technical as well as psychological before deciding to cherry pick. Nifty continues to make new lows on almost daily basis. 5325-35 is the immediate resistance level while stronger one are placed at 5380-90 and 5440-50.

Inconclusive Meet on JPC Pushes Nifty Further Down

Market reacted negatively to the inconclusive end to the meet called to discuss parliament logjam. Nifty traded below 5400 for the whole session and lack of any support even at lower levels resulted in another sharp cut of more than 1.5%. There were sharp cuts in various counters mainly in infrastructure space. LITL that came out with results yesterday was down more than 17% as the stock collapsed to almost 18 months low. GMR Infra, Punj Lloyd, IRB Infra, GVK, Unitech and NCC witnessed cuts of 6 to 10 % each on relentless selling and almost no buying support even at almost 24-30 months lows. Other counters that witnessed significant loss in market cap were BEML, Ispat, JSW Steel, S.Kumars, KS Oils, Praj, MLL, Indian Info, IFCI, TVS Motors, Triveni, M&M and Titan. There was a clear disinterest in value picking any stock/sector as almost all sectors struggled. Bank Nifty made a new recent low after moving sideways for past 2-3 weeks and that doesn’t augur well for the broader markets. ICICI, HDFC bank and PNB lost ground. Number of mid cap banking counters made new recent lows. Few stocks that did manage to see some stock specific upmoves were Fortis, Bajaj Auto, ABG Ship, NMDC and Auro Pharma. But apart from Fortis that gained more than 5% on huge stocks others just about manage to eke out small gains. Overall, it was yet another good day for bears as they pushed for lower levels on almost no resistance by bulls.

Bulls seem to have thrown in towel as levels are being taken out without much effort. Till about two days ago we were discussing the possibility of 5450 providing some support and here we are about 150 points lower even from that level. Almost all sectors are succumbing to the negative sentiments with infrastructure being the current favorite with bears. The way some of the infra stocks have seen erosion of market cap over last 2-3 weeks is simply amazing. Many stocks have entered heavily oversold positions. 5350 has also not held and now we are firmly in the 4800 to 5450 range where we traded for almost 11 months before the Nifty broke out. 5440-50 has become an immediate strong resistance while 5550-60 remains a strong intermediate reversal level. One should be careful to be on the short side as stocks and indices have entered oversold zone and any positive factor (one of them could be Govt agreeing for JPC) could trigger a sharp rebound. 5375-5380 would be the initial level to watch and then 5440-50.

Markets Sluggish, Nifty Struggling

Market did not do much as indices stayed almost unchanged in the end. But there was volatility during the session. Nifty struggled to sustain above 5400 and the GDP numbers also didn’t help much. Nifty did find some rebound after the GDP announcement but late selling in key heavyweights again pushed it back to around 5400. It was a mixed session as some stocks did find some value picking at lower levels. Heavyweights like Hero Honda, ITC, NTPC, RIL and OMCs were amongst those attracting buyers. But, on the other hand there was selling in banking counters, infra counters, ABB, Jet Airways, Lupin, Cipla, Ranbaxy, Wipro, HDFC, TCS and L&T. Uncertainty about the governance still seems to be the topmost issue and the meeting scheduled for tomorrow to discuss parliament imbroglio might play a crucial role in deciding the short term direction of the market. Anything that favors a smooth functioning of parliament could trigger a sharp rebound in the markets as we are already trading in an oversold zone. But anything that prolongs the uncertainty could be a big negative in the short term. Technically, we are in an oversold market and there is crucial support at 5350. Immediate resistance is likely around 5450-70 and then a crucial one is placed at 5550-60.

No Respite From Carnage

Friday session put paid to all expectations of bottoming out as benchmark indices nosedived. It looked like for first four days of last week as if 5400-5450 would prove to be a formidable support zone but one-sided move on Friday was enough to push even the hardcore bulls in a corner. Nifty lost over 130 points to slip below 5400 while Sensex shut shop just around 18k. This was the worst close in around 6 months. Carnage was seen across sectors as sentiments turned hugely negative towards the later half. On weekly basis, it was the relatively safe sector, FMCG was the worst impacted. BSE FMCG index lost over 6% during the week as investors sold heavyweights like ITC and Levers. Realty, Auto and the IT were the other ones that suffered the most, losing around 3% each. BSE metal index managed to eke out marginal gains on a relatively better show by Hindalco, NALCO and Tata Steel. Again, the global backdrop was positive as US indices moved to new post-Lehman highs. Local issues continued to bother investors.

Our expectations that Nifty might have seen a credible low around 5400 and we could see a sustainable rebound came to nought on Friday. The sheer momentum of the fall was unnerving as Nifty collapsed almost 185 points from its intraday high of 5556. Fall was aggravated due to weekend unwinding as traders rushed to square off any long positions. The fact that the worst impacted stocks were the ones that had held on relatively well suggest that investors and traders are in a panic mode now. The momentum is usually at its highest closer to the peaks as well as bottoms. Again, despite the sharp fall on Friday we do believe that Nifty might be closer to bottoming out though the momentum suggests otherwise. We have already seen correction of around 15% from November top and usually the normal corrective moves are of 12 to 17% magnitude. Then as already suggested on earlier occasions also Nifty provided stiff resistance between 5350 and 5500 when we were trying to move higher. As an INVESTOR with at least 6 months view it would be advisable to invest a part of investible funds in companies that have shown good quarterly numbers. As a trader the momentum is still down and it would be better to wait for some bottoming out patterns to emerge before attempting long positions. 

Nifty now has immediate resistance around 5440-5450 while immediate trend would change for better only on a sustained breakout beyond 5550.

At Last! Nifty Moves Up

Finally, we witnessed a rally that was able to sustain for a whole session. Nifty opened on a slightly positive note and kept on building momentum as the day progressed. It was a mix of buying in some stronger counters like Hindalco and short covering in highly oversold counters like DLF and others. Heavyweights like SBI, L&T, RIL and Tata Motors witnessed some interest at lower levels and for a change this interest persisted for the whole day. Bharti was the biggest gainer amongst the index heavyweights as it gained over 5%. Some of the other big gainers were Polaris, DLF, HDIL, JP Associates, Syndicate bank, Renuka, REC, Bata, IVRCL Infra, Hindalco, Sintex, HCC, Adani and Exide. But , there were a few that remained on the selling list. The list includes Sobha, Cummins, Voltas, OFSS, Ashok Leyland, IOC and HCL Tech. Nifty managed to close above 5500.

Nifty faces immediate resistance at around 5540-50 but as stated earlier also we believe that the rebound has some more legs to it and Nifty could inch up towards 5650-5680. The efforts to break below 5400 have been unsuccessful despite strong negative sentiments. It seems that combination of short covering and value buying could sustain Nifty and should it take it higher. Even the weaker stocks/ sectors like realty and infra could also move higher on short covering. The stronger stocks are Hindalco, Bharti, Sterlite, TCS and Tata Steel. Banks have seen consolidation for past 7-10 sessions and could now move higher. The better looking charts in the short term are SBI, ICICI, Syndicate bank, Indusind Bank and Union bank. Bank Nifty might move above 11000 in coming sessions. Hindalco has given a break out above 240 and one can accumulate it for next technical target of around Rs 265.

Nifty has immediate support around 5465-70 while above 5550 it could move to around 5620-30.

Bottom Continues To Elude Markets

Markets shed all its intraday gains towards the close. Mr. A. Raja’s arrest by CBI triggered the change in sentiments as Nifty suddenly shed about 50 points in a matter of 15-20 minutes. But, whatever the reason, fact is that Nifty is unable to sustain higher levels and this is in a backdrop of persistent positive global cues. There were a number of stocks that did find buying support at lower levels, be it on short covering or value buying. But, there were more stocks that weighed heavily on the indices. Hero Honda reacted negatively to its numbers and was the biggest drag on indices. Other index losers were NTPC, Bhel, Bajaj Auto and HDFC. Nifty failed to move past 5500 and closed almost unchanged at 5430.  Despite, the late sell-off we continue to be of the view that Nifty is unlikely to sustain below 5400 and this level is likely to provide a strong support even if a temporary one. On an intra-day basis we might slip to around 5350 but closing is unlikely below 5380-5400. RIL is witnessing strong volumes around Rs 900 and a move above 930 could take it to around Rs 965-970. Volatility is likely to be on higher side as market tries to find a bottom.

Nifty has immediate support around 5380 and then around 5350 while resistance is likely around 5485-90 and then around 5550-60.

No Respite From All Around Selling

Market opened on a flat note but saw huge selling immediately especially in stocks like Tata Motors whose monthly sales figures disappointed the markets in a big way. Yesterday’s gainers like Bank of Baroda, Canara Bank and SBI gave up all its gains. Weakness and heavy selling by FIIs in Tata Motors and Reliance broke the strong Nifty Support of 5425 and the market finally closed on a very weak note. The factors which are affecting the market in a big way are the macro concerns like interest rates, inflation figures and serious governance deficit which has weakened the sentiments in a very big way. ADAG stocks witnessed fresh bouts of selling as Reliance Infra closed below Rs.700 and Reliance Capital made an intraday breach of Rs.500. Titan made some brave attempts to rally but that too faced a lot of resistance around 3650 levels. The only stocks which showed some decent buying were HDFC and HDFC Bank.

There is very little one can do at this stage and hence it would be prudent to stay on sidelines. Bottom picking the market would be like catching a falling knife. Hence, we are of the view that one should not invest fresh money in the market till the time markets make a higher bottom at least on the hourly charts.

Nifty will now face strong resistance at 5450 and 5485 levels. It might find some support around 5350 levels and if this level is broken, the next important support lies only at 5295-5310 levels.