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.

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.

Nifty now has support around 5460-70 and then around 5420 while strong momentum is likely once Nifty sustains above 5550-65.

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.

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.

Nothing much changed technically as Nifty failed to build any positive momentum. The 5420-25 zone provided intraday resistance and despite trading around that level Nifty failed to make any substantial headway. Nothing much is happening at the bourses and there are not much trading opportunities even for the short term. Lack of momentum is visible on both sides, Buy as well as side and it seems waiting for even reasonably probable trading opportunities is the only option as of now. For Nifty, support is seen around 5330-35 and sustained trades above 5430 could open a 50-60 points opportunity on the upside.

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.

Nifty has immediate support around 5330 and then around 5280 while resistance is seen around 5420-5430.

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.

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.

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.

Nifty has immediate support around 5470-85 and then around 5435-40 while fresh momentum is likely above 5570.

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.

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.

Immediate supports for Nifty futures are 5460 and 5420/5395 and the resistance lies at 5525 and 5548 and 5580.

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.

Nifty has immediate support around 5470-80 and then around 5430-45 while resistance is likely between 5570-5610.

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.

Nifty futures will face resistance at 5562, 5620 and 5660 levels and strong support on the downside lies at 5495 and 5465 levels.

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.

For the immediate short term, Nifty has strong support around 5448, 5400 and then 5375 levels whereas it will face resistance around 5510 and 5545 levels.

Equity Strategists : Market Commentary

Equity Strategists : Market Commentary

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 and Sterlite.

Nifty has immediate support around 5445-60 and then around 5375-5400 while resistance should be seen between 5570-5610.

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.

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.