NIFTY - Banking Holds The Key

It was an extremely dull and boring trading session as Nifty traded in a very narrow range. In fact, the intra day range for Nifty was only 40 points, narrowest over last 5-6 weeks. Needless to say most of the heavyweights were range bound. Steel stocks were under profit taking pressure with JSW steel losing the most. Tata Steel too lost some ground as did Sail. Infosys held the index as it made a new high. Sugar stocks staged a late rally and were amongst the top gainers for the day. Some of the prominent gainers were Sintex, Sun Pharma, FSL, ABB, Polaris, Divis Lab, OBC and Triveni. Some of the losers were Mundraport, Ashok Ley, IRB, REC, APIL, IBReal, Escorts, HPCL and Andhra bank. Nifty finally closed almost around the
previous close.

Nothing significant happened to materially change the technical picture. Still, we have levels of 5940-50 on the downside and 6020-30 on the upside. Banking remains a joker in the pack and can tilt the balance conclusively either way. Metals and IT remain the sectors with upside momentum while Realty is clearly showing downside momentum. Autos are also not showing any strength and only Tata Motors retains the positive bias. Sugar stocks are showing positive bias and an upside till 88-89 is seen in balrampur Chini. Mid cap IT is also looking good. Hexaware may see upside till 114-116 while Polaris could move to around Rs 188-190.

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

A Roller Coaster Day For Nifty

Fresh week opened on a volatile note as contrasting cues came out from Asian and Eurpoean markets. The negative Asian cues mainly from China ensured a negative gap opening for our markets as Nifty struggled around 5900. But stable to positive European markets once again energized the bulls as Nifty gained over 80 points from its intraday low. Profit taking and position unwinding in the last 30 minutes shaved off all the intraday gains as Nifty closed almost unchanged. Hero Honda was the real hero as it gained around 18% on huge volumes. The under performance owing to Hero-Honda split was a thing of past in only one session as brokerages came out with encouraging reports post management discussion. Ispat was another stock in news that gained around 10%, again on good volumes. JSW Steel was rumored to be the front runner to take management control at Ispat. Broadly, Steel stocks as well as the IT stocks continued to be in positive mode while Banking failed to see any stability even at current levels. In fact, banking heavyweights were largely responsible for Nifty giving up all its gains in the last 30 minutes. Bank Nifty was down over 1.5%. Some of the gainers of the day were IFCI, Rolta, KFA, Renuka, Maruti, Cipla, Hexaware, Colpal, FSL and Asian Paints. On the lsers list were Uniphos, Max, DrReddy, IBReal, S.Kumar’s, Indusind, IOC, Axis Bank, India Info and Sterlite. Volumes were on the lower side.

Nifty saw a rebound from 5900 but again failed to close above 5950, though it did make an intraday high at 5985. Higher levels are attracting some residual selling especially in banking counters. IT heavyweights have seen sustained rise over past few sessions but might see some profit taking/consolidation around current levels. On the other hand, the mid cap IT stocks like Mphasis, Polaris, Hexaware and Onmobile are looking good and could seek higher levels. Cipla may have completed its corrective move and is likely to move to around Rs 385- 390 over next few sessions. Petronet, IFCI and GSPL could also seek higher levels. 

Nifty has support around 5880-85 and then around 5825-35 while some resistance is likely around 6020-30.