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.

Nifty Continues Downward Trend In January

January has a reputation of being a bear-friendly month and Jan of 2011 has only enhanced this reputation as we are down almost 10%, with still a day to go. Well, this thumb rule has surely worked for our markets. Nifty continued its southward journey as it lost over 3% during the expiry week and the carnage spilled over to the first day of new series. All sectoral indices were in red with Realty, Health Care and Auto being the worst impacted. Least impacted on relative basis only were IT and Banking index, both managing to lose less than the Sensex and Nifty. This continued downward spiral has brought as back to around 5500 for Nifty and around 18000 for Sensex. Negative markets have had a negative impact on sentiments and suddenly it seems that nothing could go right for India. This is in stark contrast to late October- early November when it looked as if nothing could go wrong for India. Market is down almost 14% from its recent peak at around 6350. What next? Technically, we are in oversold territory for mainline indices as well as for several heavyweights. Nifty has multiple supports between 5400 and 5550. This whole range of 5400 to 5550 provided stiff challenge for almost 11 months earlier when Nifty was trying to move higher. We believe that now this range should provide atleast a temporary respite for the markets and while it’s almost impossible to pinpoint the levels of support it does look unlikely that we would trade below 5475-5500 for a sustained period. Whether this could prove to be temporary respite or a sustainable support could only be ascertained only later. Banking stocks have seen some consolidation over last two weeks and would be amongst the first ones to see a sustainable rebound. RIL did not find any support around 950 as was our expectation and has seen huge buildup in short positions. It would be prudent to wait for it to stabilize above 950 before taking any fresh long positions. Sesa Goa is showing strength and could be bought on declines. 

Nifty is likely to find support around 5450-5480 while immediate resistance is at around 5620 and then around 5700.

Nifty Continues The Losing Streak

Last day of January series proved to be yet another bad one for bulls as Nifty lost over 80 points. January series saw Nifty lose around 500 points as the sentiments turned extremely negative in the short term. This has come in a global back drop that remains neutral to bullish. In fact, Dow made almost 30 months high yesterday as it crossed 12000. Even today most of the global markets were trading higher but local markets had no such luck as despite a positive start, Nifty continued to lose ground on long unwinding. Most heavyweights witnessed selling on almost across the board weakness. DLF, JSW Steel, Sterlite, M&M, Ranbaxy, HUL, Bharti, Bhel and ICICI bank were some of the heavyweights that contributed to the falling indices. Some of the other prominent losers were Srei Infra, LITL, Core, Jindal Holding, Indian Info, IDBI, IVRCL, Tata Chem, Lupin, HCC, Century textiles, Bajaj Hind, Pantaloon, Yes Bank and Unitech. Cement heavyweights ACC and Ambuja as well as Tata Motors were some of the heavyweights that bucked the overall trend and finished with decent gains. Few others to post gains were TV18, BRFL, Nalco, Alok, Areva, Sesa Goa and TCS. 

Nifty made a new swing low at 5595 and has maintained the trend of lower lows and lower highs. The momentum remains with the bears as even on the last day of January series market could not attempt even a small technical rebound. More downside is seen in coming days and Nifty might find it difficult to scale 5750-60. Support is seen around 5520-5540 on weekly charts and some technical rebound could materialize from around these levels. Sector- wise it is difficult to point out the stronger ones but it looks probable that banking sector could see buying at lower levels. Some stocks that still qualify as buy on dips are Sesa Goa, SBI, Sterlite, ICICI bank, Alok, Axis, HDFC bank, RIL, Bharti, Cipla, Praj and Petronet LNG. BUY on Dips or on bad days is the key here as it would be imprudent to play trade momentum on the buy side as the momentum remains with the sellers.

Nifty now has immediate support around 5570 and then around 5520-35 while resistance is at 5680 and then 5740-50.

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.

Markets Show Positivity Ahead of Credit Policy

Markets opened on a strong note primarily because better than expected results from SBI and managed to hold the gains as ICICI too posted impressive numbers. Banking stocks like Bank of Baroda, HDFC Bank, PNB and Yes Bank too saw strong buying because of improved sentiment in the banking sector. Reliance was slightly subdued because it could not beat the street estimates. The market breadth, indicating the health of the market, was strong. On BSE, 1,701 shares advanced while 1,174 shares declined. A total of 103 shares remained unchanged. Tata Steel rallied impressively and closed on a strong note. Market’s response to tomorrow’s credit policy will be extremely critical as the strength of banking stocks is extremely important for the market to rally further. BHEL was surprisingly strong and L&T’s strong closing also played a small role in boosting the sentiment of the market.

Spot Nifty has strong support at 5694 and 5674 levels whereas it will face resistance around 5790 and 5835 levels. We feel that the market has the potential to rally to around 5835 levels but for that tomorrow’s credit policy should not disappoint the market.

Nifty Looking For Support !

Nifty moved up sharply in the latter part of the session to close above 5700. For greater part of the session market traded in the red as yet again a few heavyweights like RIL put pressure on indices. Nifty slipped below 5650 mid session before short covering coupled with some value buying in banking counters improved the sentiments. Banking heavyweights like ICICI bank and HDFC bank were amongst the prominent gainers and that boosted the sagging indices. Even SBI that made a new recent low at 2463 recovered sharply to claw its way back above 2500. Other mid cap banking counters too continued to move up. Some of the prominent gainers for the day were Orchid, Indian Bank, Dena Bank, IDBI, Syndicate bank, IFCI, IOB, Al Bank, Can bank and Central Bank. RIL was bogged down yet again by various rumors as it slipped to around Rs 950. It recovered a great part of its intraday loss towards the close but still ended the day in red. Some other losers were Crompton, United Spirits, Gail, PTC, Jain irrigation, Petronet, ITC and ONGC.

Nifty bounced back from just around the previous recent low at 5628 and recovered smartly to close above 5700. It seems that market is finding support around 5630-5650 and could again try to move past 5740-50. Banks are finding some buying around current levels as most of the banking results have been good so far. That is perhaps leading to some kind of short covering ahead of credit policy on 25^th Jan. Even a reasonable technical rebound in banking counters could support indices. Allahabad Bank, Indusind Bank, Central bank (above 174), IOB, Syndicate Bank, Can Bank ( 602) and Yes Bank( above 278) could see reasonable upside from current levels.

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

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.