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 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.