Markets See A Positive Momentum

Market opened on a positive note and promptly made a new recent high just around 5950. But again some sector churning and some profit taking mainly in the heavyweights was witnessed at higher levels. Nifty traded just around 5900 for most part of the day as yet again activity was concentrated mainly in the non-index counters. Some of the counters and sectors that have been laggards for long were in a catching up mode. Infra and Realty stocks were the prime examples of this phenomenon. So, some of the top gainers were HDIL, LITL, Unitech, NCC and HCC. Suzlon also attracted huge volumes as it gained around 8%. Some others amongst the top gainers were Polaris, Rolta, TV18, Sterlite Tech, PTC, Mcleod Russell, Sobha, KFA, Sesa Goa and REC. Profit taking dragged some of the counters that had seen strong run up over past few days. The list includes Idea, Cairn, Pantaloon, Wipro, Chambal, Tulip, Onmobile, OBC, LIC Hsg and ABG Shipyard.

Nifty remained in a consolidation mode even as broader market saw positive momentum. Polaris that was mentioned couple of days earlier has seen a strong breakout amidst huge volumes. Pattern suggests decent upside over next few weeks and one can accumulate it on dips for potential targets of around Rs 235-240. LITL has also moved out of consolidation mode and might see another 12-15% upside. Few others that could seek higher levels are IGL, Tech Mah, Aurobindo( above 205), Rolta, DLF( above 274), PFC, HCC and TV18.

Nifty has support around 5830-40 and then around 5770 while resistance remains around 5950-65.

Mid Caps Join The Party

Market encountered some profit taking at higher levels as Nifty saw intraday dip to around 5850. But, strong momentum helped indices to recover all its intraday losses as Nifty bounced back to close above 5900. The mid caps and small caps extended their rally by one more session. Banking heavyweights led the dip earlier in the day as stocks like HDFC Bank, Axis Bank and ICICI witnessed some selling pressure at higher levels. But, the mid cap banking names attracted strong trading interest as stocks like Vijaya bank, Andhra bank, Uco Bank, Dena Bank, Syndicate Bank, IOB an Indian Bank moved up sharply on good volumes. In fact, the list of gainers was made up of mainly the mid cap counters. Onmobile extended its gains further as it surged almost 11%. Some other top gainers were Alok Ind, Patel Engg, Sesa Goa, Bajaj Hind, Moser Baer, Jindal SW Holding, Mundra Port and Tulip. HUL, M&M, DLF and Havells were amongst day’s top losers. Overall, the undercurrent was positive despite slight negative undertone in Nifty. Even Nifty did well to claw its way back above 5900.

There was some intraday hiccup in the ongoing up move as Nifty lost almost 50 points mid session. But strong buying in stocks like TCS, Tata Motors and metal heavyweights helped indices to erase all losses towards the close. Mid caps are beginning to join the party as traders get more confident about the upmove. Mid cap banks that look good for decent upside are Syndicate Bank, Indian Bank, Dena Bank, IOB and Allahabad Bank. JSW Steel has given a breakout on daily charts and is likely to target Rs 1040-1050. Others that have positive patterns are IVRCL Infra, PFC( above 254), L&T, Tata Motors and REC( above 261).

Nifty has support around 5830-40 and then around 5770 while some resistance is around 5950-65.

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.

RBI Policy Induces Heavy Selling

Market gave up all its early morning gains on account of heavy selling in key heavyweights after the announcement of RBI policy. RBI raised interest rates by only 25 bps but remained committed on tightening as inflation control remained its top priority. Banking stocks rallied initially but failed to sustain higher levels. The Auto counters also encountered selling in the late trades. Nifty lost more than 100 points from its intraday top and closed below 5700. In fact, Nifty gave up all its gains of past 3 sessions. Global cues are positive and that may keep some positive bias as the markets re-open on Thursday. Nifty is likely to see expiry just around 5700. Banking stocks have seen some technical rebound and it seems that there is still some steam left in the rebound. One could utilize any weakness to accumulate the banking counters like SBI, ICICI, Yes Bank, BOI, BOB and Allahabad bank.  Auto stocks remain weak and are a typical sell on rallies stocks. Tata Motors has some support around 1150 and close below 1150 could further weaken its technical set-up. HUL lost more than 5% after its quarterly numbers. Stock closed below 290 and sustained trades below 290 could mean more weakness in this heavyweight. RIL finds some support around 950 and has held this support for past 24-30 months. Positional traders could buy RIL on weakness with perspective of 4-6 weakness. Tata Steel has some resistance around current levels of 655-660. Short covering might sustain it around current levels on Thursday but some correction is expected after January expiry.

Nifty has immediate support around 5650 and then around 5610 while resistance is at 5740-50.

TCS Results Boost Nifty

TCS results ensured a gap-up opening and despite some volatility during the session market managed to stay in the positive for whole session. Intra day short covering, in fact lifted the indices during last 60 minutes as Nifty closed almost at the highest level of the session. TCS was up more than 5% as it hit a new high. Opto Circuits came out with good results and was the biggest intra day gainer as stock moved up by more than 10% on huge volumes. Some pharma counters too witnessed buying. Some of the top gainers for the day were Polaris, Praj, Indusind Bank, Sterlite, Sun Pharma, Orchid, Ambuja, JSW Steel, Ranbaxy , Axis Bank and JSPL. Exide results proved a big dampener for the stock as it lost more than 10% on heavy volumes. Some other stocks that continued to struggle were Bata, Zee, R-Infra, IRB, HCC, BOB and IVRCL Infra. Breadth was positive while volumes were on the lighter side.

Nifty managed to claw its way back above 5700 on the back of good showing by TCS. Nifty closed almost within the resistance zone of 5730-40. Positive global cues could ensure further upside to around 5785-5810 level. It still looks like a relief rally and one needs to be extremely cautious in stock- selection to play this rally. Pharma and IT are the ones that are throwing up buying opportunities and even the metal stocks remain in the buy on dips category. Petronet LNG is repeatedly finding resistance around 130-132 and sustained trades above 132 could propel the stock higher to around 145 levels. IDFC could see a technical rebound to around 167-169 if it sustains above 160 while some upside is likely in Indusind Bank( above 240), Orchid Chem, NMDC( above 269) and Ranbaxy.

Nifty has immediate support around 5650-70 and then around 5610 while 5780-5810 is likely above 5745

Another Uninspiring Week For Nifty

It was almost a repeat of previous Friday as Nifty plunged over 100 points. The fall looks more menacing if one considers that Nifty had in fact moved up by almost 75 points at one point. It was a panic like situation as sell off gripped almost all sectors and stocks. Nifty had found firm support around 5700 on numerous occasions in the past but it was not to be this time as Nifty slipped below 5700 and closed around 5650. This capped the overall weak show during the week. Nifty has plunged around 9% in past two weeks and this time Indian market has really seem to have de-coupled from the global markets, atleast in the near term. Most of the global markets have gone up in past two weeks and its only Indian and Chinese stocks that have been singled out for selling. The local factors have really caught up and foreign funds are suddenly finding valuations back home much more tempting. The selling that began with the interest rate sensitive sectors has spread to almost all the major sectors. So, Capital Goods was the worst performer last week along with Oil Gas, banking and Realty. IT reacted to somewhat muted performance as well as guidance by Infosys. HDFC came out with good results but was largely ignored as markets plummeted on Friday. This could be the trend in coming weeks as macro factors take precedence. Technically, Nifty has broken significant support at 5700 and could plunge further 100-125 points from current levels. 5830-5850 could now become a new ceiling for coming weeks. Overall structure is weak and its not advisable to catch the falling knife. Market might need to stop falling and then consolidate and currently even the first step (that of fall) does not seem to be over. It would be good idea to take note of the good quarterly performances and then buy these stocks during the consolidation process. For traders there would be technical rebounds but the trend is clearly down and it would be a better idea to use rebounds to trade on the short side.

Nifty has immediate support around 5570 and then around 5520-30 while resistance is likely around 5760-65 and then 5810-20.

Infosys Leads As Nifty Plunges

Infosys numbers came as a disappointment and the technical rebound that showed some promise yesterday just fizzled out. Nifty opened in red and turned deeper into red as the day progressed. The inflation figures did not look good and the banking stocks that were also beginning to look good for at least some technical rebound met with heavy selling pressure. In fact Bank Nifty was down more than 3.5% as stocks like ICICI, SBI and HDFC bank moved lower. Infosys lost more than 5% and hurt the sentiments towards the whole IT sector. Some of the biggest losers for the day were Infosys, Praj, HPCL, OBC, PNB, Pantaloon, IOB, Titan and LIC hsg. Realty stocks surprisingly did well as most of them closed in the green. Some others that bucked the trend were Adani, Ambuja, Ultratech, GE Shipping, Havells, Grasim and Exide. On the whole it was a disappointing day as Nifty had yet another triple digit fall.

All the hopes for a tradable rebound were dashed early in the session as Infosys disappointed. More disappointing was the fact that banking heavyweights just failed to develop any followup momentum and on the contrary were amongst the top losing counters. Bank Nifty is back to its recent lows giving up all its gains of past two sessions in a single day. Market continues to witness volatile sessions and is basically trading violently between 5700 and 5850. Stocks are having alternative bouts of buying and selling and it is increasingly becoming difficult to find even marginally high probability trades. Break below 5700 could trigger fresh selling and might take Nifty lower to around 5575-5600. Considering the choppiness and volatility it would be better to wait for somewhat clear signals before taking any fresh trades.

Nifty finds immediate and crucial support around 5690-5710 while resistance is likely around 5835-5850.

Nifty Rebounds Amidst Fragile Sentiments

Market recovered smartly over the week as Nifty gained over 4%. The rebound was across the board with the worst impacted sectors like Realty and Metals gaining the most. But, despite a stronger looking rebound the sentiments remained fragile as rumors continued to impact trading. It was particularly so on Friday as mid and small caps reacted adversely to the SEBI’s decision to ban promoters of four companies. However, despite the fragile sentiments it was a strong recovery that too Nifty to 6000 levels again and it was only the strong resistance around 6030-50 that stopped Nifty from going further. Incidentally both Sensex and Nifty found resistance round the psychologically important levels of 20K and 6K respectively.

Technically, the levels of 5020-40 and then 5850 are important supports on daily and weekly charts, while sustained move above 6050 could pave the path for another smooth move to around 6180-6220. Banking stocks made a strong comeback but it’s the IT stocks that look to be the best bet to take Nifty higher. BSE IT index closed on a weekly all time high as did BSE Healthcare index. Followup buying and support in Infosys, TCS, Wipro and HCL Tech on Monday or Tuesday could open up higher targets for these stocks. Tata Motors, M&M and Bajaj Auto are also looking good. L&T, Cummins and Crompton are also showing positive bias and here again followup in next couple of sessions could mean higher levels. Bharti is finding some resistance around Rs360 but it has strong support around Rs330 and any dips towards this could be utilized to take fresh positions. Infra and Realty did see some rebound last week but still are not out of the woods completely. So as a trader it would be better to stay away from long positions in these two sectors. Metals are looking better than Realty. JSPL has bounced back significantly from the low of around Rs 575 a few sessions ago and sustained trades above Rs 690 could take it further to around Rs 735-750. Tata Steel is moving sideways between 585 and 625. Positional trades could be taken on the long side in Tata Steel with a 6-8 weeks view.