Profit booking and winding up of positions saw the index slipping up in a slow and steady manner throughout the day. The real damage came in the second half of the trading session when the key support level of 5870 of Nifty futures was broken. The weekend pressure and the truncated next trading week because of two trading holidays saw both investors and traders reducing the exposure in the markets. Nifty now can slowly drop to its first strong support level of 5790-5800 and from there onwards the future course of action will be dictated by the first quarter results. Infosys comes out with its results on 15th and till then we are of the view that Nifty will be range bound between 5700 and 5900 with a slightly negative bias. Instead of buying and selling breakouts and breakdowns, one should make a strategy of buying supports and selling rallies. Lot of stock specific action will be seen as we now entering the quarterly results season. Since there will be a lot of volatility during this period we would very strongly advise to trade in lower volumes.
Showing posts with label markets. Show all posts
Showing posts with label markets. Show all posts
Sunday, April 10, 2011
Profit Booking Sees Nifty Slipping
Monday, April 4, 2011
Markets On A Roll
It has been amazing week for India….markets were on a roll and Indian Cricket team has been on a roll too. Sensex continued to march northwards breaking all resistances while Indian cricketers moved past all resistances to lift the World Cup after a gap of 28 years. Well done, India and Congrats to Dhoni and team! Meanwhile, Nifty was up 3% for the week as it moved past 5800. Banks helped the indices earlier in the week while IT stocks lifted it towards the later half of the week. Markets have rallied almost 10% in last two weeks as FIIs have again turned positive on Indian markets. Although markets have moved past all resistances during past 10 days and that too without much sweat, it seems that indices could consolidate around current levels as small and mid caps do the catching up. This phenomenon was in play even on Friday as mid caps rallied sharply while mainline indices remained almost unchanged. Next week could also see stock specific moves than indices or large caps. Auto and Cement counters might react to the monthly sales figures. IT stocks have rallied ahead of quarterly numbers and now must consolidate before the results season is kicked off by Infosys numbers.
Monday, March 28, 2011
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.
Wednesday, March 23, 2011
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.
Tuesday, March 22, 2011
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.
Monday, March 21, 2011
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.
Sunday, March 13, 2011
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.
Thursday, March 10, 2011
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.
Tuesday, March 8, 2011
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.
Monday, March 7, 2011
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.
Saturday, March 5, 2011
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
Thursday, March 3, 2011
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.
Monday, February 28, 2011
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.
Thursday, February 24, 2011
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.
Tuesday, February 22, 2011
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.
Monday, February 21, 2011
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.
Saturday, February 19, 2011
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.
Wednesday, February 16, 2011
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.
Tuesday, February 15, 2011
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 11th 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.
Wednesday, February 9, 2011
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.
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