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.

Negative Sentiments Continue in Markets

Markets opened on a negative note and traded in the negative territory for the better part of the session. Nifty slipped to as low as 5416 in the early trades as the sentiments turned hugely negative. Some value buying in some heavyweights coupled with some short covering helped indices to rebound in the later half. Nifty retraced almost all its losses and managed to close above 5500. The index was largely helped by the likes of ONGC, L&T, Bhel, SBI and Maruti. Banking stocks also saw value buying at lower levels and good numbers by Canara Bank and Andhra bank also helped in boosting the sentiments a bit. Siemens was the biggest gainer for the day as its German parent announced a open offer at Rs930 per share. The sentiment rubbed off on other such companies like ABB also. Prominent gainers of the session were Can bank, LITL, Crompton Greaves, Ashok Leyland, Federal bank, BOB, ONGC, DRReddy, Indusind, Titan, Gail, UBI and Bhel. The infra and Realty counters continued to slip and were amongst the top losers. Jain Irrigation lost almost 11% on long unwinding. Losers’ include HDIL, Unitech, JP Associates, Jet, Bata, HCC, KFA, BGR Energy, Bajaj Hind, IVRCL Infra, Escorts, REC, PFC and Voltas. 

Nifty recovered from the day’s lows and closed above 5500. Banking and metal stocks witnessed some buying at lower levels. Even Auto counters saw some buying ahead of monthly sales figures. Broadly, we believe that while Autos might see some rebound, the overall technical picture is not looking pretty for most Auto stocks. Rebound should be utilized to lighten long positions. Banks, however are looking much better technically and could be accumulated in smaller lots. However, It is unreasonable to expect a painless rise in any stock considering the kind of down momentum we have been witnessing. Stocks as well as indices are likely to see selling pressure at every rise and that might make any climb upwards difficult and slippery.

Nifty has immediate support around 5430-50 while resistance is likely around 5560 and then around 5630.

Selling in Key Heavyweights Keeps Nifty in Check

Nifty failed to make any headway beyond 5750 and despite some positive cues from overseas markets as well as gapped up opening, Nifty succumbed to selling at higher levels to slip below 5700. Broad market was positive but Nifty was affected negatively by selling in key heavyweights like RIL, SBI and Infosys. Metal stocks were positive and buying was seen in stocks like Tata Steel, Hindalco, SAIL, Sterlite, Ispat and JSW Steel. HCL Tech surprised the markets positively and was one of the leading gainer for the day. Some of the mid cap banking counters moved higher on account of some short covering as did some Realty counters. So, in the gainers list we had stocks like Can Bank, LIC Hsg, Yes Bank, OBC, Dena Bank, Andhra Bank, DLF and Sobha. 

Nifty faltered around 5740-5750 as key heavyweights witnessed selling. It seems that Nifty is trying to stabilize around 5650-5700 but broadly the momentum would remain with the sellers as long as Nifty remains below 5750. Heavyweights are showing divergent trends and that is keeping Nifty in check. Short covering bout could continue to lift some mid cap banking counters and some more upside is likely in stocks like Dena Bank, Andhra Bank, Allahabad Bank and the likes. But still it would be too early to call a bottom in these counters. We continue to believe that bottoms would first be visible in bigger banking counters like SBI, ICICI, Axis and HDFC Bank. Hindlaco and Sterlite have seen good moves in last two sessions and both are approaching significant resistance at 240-42 and 186-89 respectively. Sesa Goa could see more upside if it manages to move past 328.

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

A Quiet Day in The Markets

It was a relatively quiet day for the markets as Nifty tried to stabilize above its 200 DMA. But, the disquiet and nervousness was still visible as far as stock and sector specific moves were concerned. So, while IT held the Nifty to neutral territory, metals, Realty and Capital Goods stocks were weak. L&T numbers were not liked by the street as stock continued its southwards journey. Stock is now below Rs 1700. ADAG stocks responded negatively to the SEBI ruling as all the group stocks took a knock. R-Infra was down almost 8% and is now trading consistently below the May’2009 levels. There was no respite for realty and infra stocks. So, while Nifty managed to close without any damage, majority of the actively traded stocks were not as lucky. TCS came out with better that expected numbers after the market hours and might trigger some short covering in broad market. But, still the trend remains tricky and its likely that we might slip below the 200 DMA and 5600. The current weakness seems to be more on account of bull liquidation than pure short covering and that could largely explain any strong short covering rebounds so far. Market and some of its heavyweights continue to trade in oversold zone and still not much of positive divergence in momentum indicators is visible in these charts. So, charts are not showing any signs of bottoming out and any technical rebounds could prove to be short-lived and would find resistance at even slightly higher levels. Nifty’s rebound could falter around 5730-40. Most of the better results are also not finding favors with marketmen as was witnessed in Indusind and to a lesser extent in Axis Bank. Axis could rebound to around Rs 1250/Rs 1285. Overall, there is not enough technical evidence to suggest that the pain could be over.

Nifty has immediate support around 5610( around 200 dma) and then at around 5550-60 while resistance is likely around 5730-40.

A Good Beginning for the New Year 2011

2011 got underway on a positive note as markets posted reasonable gains. Nifty shed almost half its intraday gains towards the close but still the day turned out to be a good one. Metals led the rally with Tata Steel, Hind Zinc, Sterlite, Sesa Goa and SAIL posting good gains. The metal mid caps performed even better as we saw big gains in stocks like Guj NRE, Tata Sponge, Timken, Tinplate , Uttam Steel and other such stocks. ADA stocks further extended their rebound and RCap, R-Infra and R Media managed smart gains. The Auto stocks began on a positive note but the rally fizzled out as the day progressed as heavyweights Bajaj Auto, Tata Motors and Maruti witnessed selling pressure at higher levels. Escorts and Ashok Leyland, however closed on a positive note. Some of the infra names like Nagarjuna constructions, GMR and IVRCL Infra saw some value buying and were amongst the top gainers for the day. Some other prominent gainers were JSW Holding, Hexaware, Godrej Ind, Polaris, Srei Infra, Ind Hotels, HOEC, 3-I infotech, B Chini, Bhushan, Voltas and Punj Lloyd. B.Auto, REC, Uniphos, Wipro, IBReal and Patni were amongst the few that ended the day in red.

Nifty faced some resistance around 6180 and we believe that the 6180-6220 zone could provide stiff resistance in the short term. The trend remains positive as of now but the bullishness might spread to the non-index counters even as Nifty consolidates/corrects. Mid cap IT continues to see momentum as was witnessed even today. Polaris has seen a technical breakout above 185 and sustained trades above 185 could take this stock higher to around 198-205. Metals remain the strongest amongst the heavyweights and more upside is likely in Tata Steel. Both Sesa Goa and Sterlite are at interesting levels as both face resistance around 345-349 and 192-195 respectively. Sterlite in particular has traded in this broad range of 160  to 195 for past 7-8 months now and a breakout above 195 could mean a potential targets of around 225-230. Some others that look good for next 5-7 days are ind Hotels, IVRCL Infra, Voltas, Sintex, Educomp, ABB and B. Chini.

Nifty faces resistance around 6200 while support is seen at 6120 and then around 6150-60.

A Nice End To Year 2010

The final day as well as the week of 2010 capped the last year of first decade of current century with smart gains. 2010 turned out to be another good one for the investors with Sensex gaining around 18%. Despite a few sectors hogging limelight it was a fairly all round show with various sectors outperforming the Sensex. While Auto and banking sector grabbed the headlines as well as media space, the others like FMCG, HC and IT also did equally well. All these sectoral indices were up 30-37% for 2010. Consumer durables was the biggest gainer for the year as the index gained around 68% despite losing some sheen in the last 6-8 weeks. Realty remained out of radar for most investors as it was the biggest loser. Autos and Health care were the most consistent and stable performers while IT took off in the last couple of months. So, as we enter 2011 IT is the one that shows strong momentum. Metals, Capital Goods and Oil & Gas were mostly subdued though metals did show some momentum over last few weeks. So, what now as we enter a brand new decade. We believe that broadly market remains in a decent uptrend and we should see the new highs being made in 2011. First leg of the current bull run was terminated just around the all time highs and we have had a decent correction of about 10-11%.

Market seems to be slowly but surely coming out of that corrective phase even as most investors/traders remain wary of the rally. The sentiment is still negative and the carnage in small and mid caps is largely to be blamed for that. We feel that Nifty could continue to move higher over next couple of months though in almost a similar manner as it has from around 5700 level. A clear change in leadership is seen and sectors like Metals and Capital Goods could take centre stage with IT continuing to move higher. The biggest newsmakers of 2010, Autos, Banking and even Consumer Durables are likely to play a second fiddle and might lead the corrective moves rather than the rallies. Smaller sectors like Sugar, textiles and fertilizers would also be in focus particularly in the next couple of months. So, as it stands now one needs to focus on stocks like BHEL, L&T, Siemens, ABB, APIL, Reliance Infra, Tata Steel, Hindalco, Sterlite, Sesa Goa, Cairns, RIL, Bharti, Wipro, Mphasis, Hexaware, Polaris, Praj, Renuka, B.Chini, Arvind, Alok etc for decent and stable gains. These are just a few names and many new stocks from within these sectors would surely pop up as the trend becomes more visible. Technical patterns of various underperformers of 2010 still don’t provide enough confidence to suggest that these stocks could seek sustained higher levels. But, we surely believe that some of these names might just provide excellent trading and investing opportunities as the Year progresses.

We sincerely wish all our subscribers an extremely profitable 2011!

All Round Gains As Nifty Touches 6100

Nifty regained 6100 as the December series saw a gain of exactly 300 points. It was a day of all round gains as almost all the sectoral indices closed in the green. Metals and IT continued the gaining spree and were amongst the top gainers for the day. Infosys moved to new highs as did Hindalco. Some of the banks too witnessed some short covering and were amongst the day gainers. But, overall, sector was subdued as Bankex saw only marginal gains. Mid cap derivative counters were the real heroes of the day as stocks like Ruchi, Praj, Aban, Hexaware and HOEC emerged as the top gainers. Some of the other names on the list were Suzlon, IBReal, GMDC, Chambal, GT Offshore, Indusind, Uniphos, Pantaloon, Alok, Bajaj Hind,  OnMobile and IOB. The OMCs were amongst the top losers as EGOM meet on diesel hike was put off. Some others to end in the red were Idea, ABB, Polaris, Tulip, Jindal Holding, India Cement, Syndicate Bank and Crompton.

Nifty continued its northward journey as it added another 40 points to move past 6100. It might see some resistance during the day tomorrow as we move into the first series for 2011. 6120- 30 could provide some resistance to the upmove and we might see a bit of consolidation again between 6000 and 6100. Banking and Realty did not see any substantial shortcovering even on the last day and remain a near term worry for the indices. We believe that IT, Metals and Capital Goods could see outperformance in the next series. CG heavyweights like Bhel, L&T and Siemens are witnessing some positive buildup technically and could be accumulated on bad days for decent returns in January. Sterlite is reaching the upper side of the range at 190-192 and might see some correction/consolidation. Tata Steel, Hindalco and JSW Steel could see positive moves in the short term. Sugar and fertilizer stocks could also witness upmoves over next 3-5 sessions. Chambal, Renuka and B.Chini are particularly looking good.

Nifty has support around 6040-50 and then around 5980 while watch out for resistance around 6120-30.

Negative Global Cues Keep Nifty Down

Markets opened on a flat note but then struggled to stay in the positive territory as the global cues turned negative. Shanghai was down around 2% and then European markets opened with more than 1% cut. All this impacted our markets as Nifty slipped below 6000 while Sensex just about managed to stay above 20000. Metals turned negative on Chinese cues and Sail saw the biggest cut. It lost over 4% while Tata Steel, Sterlite and JSW Steel.too ended on a negative note. Sesa Goa , however closed in the green. Banks too were in negative mode and apart from ICICI Bank, most others ended the day in the red. Some of the biggest losers were Patel Engg, Indian Info, SAIL, RMedia, IDEA, RCom, REC, Sterlite, Pantaloon, IBReal and welcorp. Praj was the surprise gainer of the day as it gained a whopping 10% on extremely heavy volumes. Some others on the gainer list were Dish TV, BGR, Bombay Dyeing, B.Chini, Bata, Ambuja and Mphasis.

Nifty closed below 6000 after testing high of 6045. Global cues have turned negative and add to the fact that we have December expiry. It seems that expiry is likely just around 5950-6000. It could be stock specific market for next 3-4 days and its likely that some mid caps could see decent run up. Some short covering is likely in stocks like Bajaj Auto, ITC, ACC, HDFC, HDFC bank and ICICI bank. Praj has seen such huge volumes after a very long time and followup buying over next 1-2 days that takes the stock above 85 could be medium term positive for the stock. Then, one can expect a rise to around Rs 110-115 over next 3-4 weeks. Bombay Dyeing could move to around Rs 530-535 if it remains above 505.

Nifty has support around 5950-60 and then around 5885-5890 while resistance is likely around 6030 and then 6080.

Metals Push Nifty Towards 6000

It was a steady day at the markets as Nifty edged higher to 6000 while Sensex moved past 20k. Most sectors were in positive mode with even Bank Nifty gaining more than 2%. Metals were in fine form yet again as stocks like Tata Steel, Sterlite, Hind Zinc, Hindalco and Sesa Goa posted decent gains. Ispat was bagged by JSW Steel but the stock lost around 15% as the buy price at Rs 19.85 per share was much lower than the market’s anticipation. However, JSW Steel stock gained around 2%. Banking stocks witnessed some buying at lower levels as most of the banking heavyweights edged higher. ICICI led the sector with almost 3.5% rise on improved volumes. Some other prominent banking gainers were Axis, Yes Bank, Bank of India and IDBI. IDBI and IFCI were also helped by the Ispat-JSW Steel news as both are amongst the significant lenders to Ispat. IT heavyweights were mixed as while TCS and Infy witnessed some profit taking, Wipro edged higher. Mid cap IT stocks were in demand and significant gains were seen in Mphasis, Tech Mahindra, Patni, FSL and 3i Infotech.

Nifty closed at 6000 and is looking good to test 6050-6070 in coming sessions. Banks are volatile but seem to be finding some buying around current levels, atleast the better banks. Bank Nifty has found some support around 11150-200 while immediate resistance is at around 11675-750. Sustained trades beyond 11750 could result in short covering that might result in sharp rise to around 12200-300. ICICI Bank seems to be leading this time around and above 1120 it remains in positive mode. Stock could target Rs 1175-85. IDBI is also showing positive bias and is likely to target Rs 172-73. Tata Steel and Hindalco continue to lead the metals pack and now even stocks like Sterlite and JSPL are looking good. Some other stocks that look good are NMDC( above 267), Sesa Goa( above 306), IRB Infra( above 227), Exide( above 165) and Hexaware.

Nifty has now immediate support around 5935-45 and then around 5880 while resistance is likely at 6030 and then around 6070-80.

Banking Stocks Witness Strong Selling

Nifty opened on a buoyant note and traded above 6050 for considerable period. Metals and IT were largely responsible for this buoyancy. But, the leader thus far, banking saw significant amount of selling throughout the session and was largely responsible for markets shaving off all its gains. In fact Nifty closed marginally in the red at 5992. Most of the PSU banks witnessed strong selling as investors were spooked by RBI Governor’s advice to the banks on reducing lending rates and increasing deposit rates. This advice, if followed could mean reduction in NIMs of most banks. SBI lost around 4% while Can bank, BOI, Indian Bank, OBC, PNB, BOB and Allahabad Bank were other major losers. Bank Nifty was down around 2.5%. Metals were significant gainers as Tata Steel led the sector with an intraday gain of over 3%. JSW Steel, Ispat, Bhushan, JSPL and Sterlite were other prominent gainers. Tata Motors continued to accelerate as it hit a new all time high. Some other notable gainers were Welcorp, Ruchi Soya, Havells, CESC, IGL, Srei Infra, Sun Pharma, Siemens and United Spirits.

Nifty failed to encounter stiff resistance around 6050 and lost significant ground in the later half to slip below 6000. Twice now, market has failed to close above psychological levels of 20k and 6K despite spending significant intraday period above these levels. 6040-6070 remains a stiff resistance and it seems that we could see a swing to lower side and possibly a test of support at 5920-30 or even 5870-80. Banking that had taken the market higher has reversed its direction and could under perform in coming weeks. It would be prudent to avoid bargain hunting in banking stocks, particularly the PSU ones till the time the profit taking/selling subsides. Metals are showing some resilience as are some Capital Goods counters. Down days could be utilized to take long positions in leaders from these two sectors. IGL has given a daily breakout by closing above Rs340. Sustained trades above Rs 340 could take the stock higher to around Rs 365-370. Havells could target Rs 418-425 above Rs 404.

Nifty has support around 5925-40 and then around 5865-80 while resistance is likely around 6030-6040.