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.

Nifty has resistance around 5900 while support is seen around 5750 and then around 5680.

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.

No Respite From Carnage

Friday session put paid to all expectations of bottoming out as benchmark indices nosedived. It looked like for first four days of last week as if 5400-5450 would prove to be a formidable support zone but one-sided move on Friday was enough to push even the hardcore bulls in a corner. Nifty lost over 130 points to slip below 5400 while Sensex shut shop just around 18k. This was the worst close in around 6 months. Carnage was seen across sectors as sentiments turned hugely negative towards the later half. On weekly basis, it was the relatively safe sector, FMCG was the worst impacted. BSE FMCG index lost over 6% during the week as investors sold heavyweights like ITC and Levers. Realty, Auto and the IT were the other ones that suffered the most, losing around 3% each. BSE metal index managed to eke out marginal gains on a relatively better show by Hindalco, NALCO and Tata Steel. Again, the global backdrop was positive as US indices moved to new post-Lehman highs. Local issues continued to bother investors.

Our expectations that Nifty might have seen a credible low around 5400 and we could see a sustainable rebound came to nought on Friday. The sheer momentum of the fall was unnerving as Nifty collapsed almost 185 points from its intraday high of 5556. Fall was aggravated due to weekend unwinding as traders rushed to square off any long positions. The fact that the worst impacted stocks were the ones that had held on relatively well suggest that investors and traders are in a panic mode now. The momentum is usually at its highest closer to the peaks as well as bottoms. Again, despite the sharp fall on Friday we do believe that Nifty might be closer to bottoming out though the momentum suggests otherwise. We have already seen correction of around 15% from November top and usually the normal corrective moves are of 12 to 17% magnitude. Then as already suggested on earlier occasions also Nifty provided stiff resistance between 5350 and 5500 when we were trying to move higher. As an INVESTOR with at least 6 months view it would be advisable to invest a part of investible funds in companies that have shown good quarterly numbers. As a trader the momentum is still down and it would be better to wait for some bottoming out patterns to emerge before attempting long positions. 

Nifty now has immediate resistance around 5440-5450 while immediate trend would change for better only on a sustained breakout beyond 5550.

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!

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.