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.

Nifty has immediate support around 5330 and then around 5280 while resistance is seen around 5420-5430.

Buoyant Start To A Fresh Week

Fresh week opened on a buoyant note as market absorbed the Japanese tragedy and moved higher. It was a slow but steady rise in the morning session as Nifty traded around 5500. It was only later in the day that momentum picked up as the short term shorts ran for cover. RIL led the rise with almost 3% rise on above average volumes as the stock closed well above Rs 1000 after almost 2 months. Reliance Cap also saw heavy activity after it announced stake sale in its insurance arm to Japan’s Nippon insurance. Stock zoomed up by around 10%. The cooling down in crude prices played its part in OMCs and Aviation counters. Gains were seen in BPCL, HPCL, Jet and KFA. Some other prominent gainers were Welcorp, Escorts, GAIL, Onmobile, Ashok Leyland, Dish TV, GSPL, Tata Power, Union Bank and Voltas. Banking stocks were subdued early in the day but gained towards the end on account of short covering.

Nifty has again reared its head above 5500 and is now poised to take another shot at 5600. Intraday sustained move above 5570 would trigger a swing buy in Nifty and close above 5550 would be another confirmation. The up move in RIL that was mentioned yesterday augurs well for the overall Nifty move. RIL could target Rs 1065-70 over next few sessions with some resistance around 1040-45. BPCL has target of around 590-95 if it sustains above 560. OBC and Can Bank are showing strong resilience and could see sharp upside in neutral to positive market. Others that show promise on the upside are JSPL (above 669), Gail, Ranbaxy, Indusind Bank, HDFC, Bombay Dyeing, Kotak and Godrej Ind.

Nifty has immediate support around 5470-85 and then around 5435-40 while fresh momentum is likely above 5570.

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.

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.

Immediate supports for Nifty futures are 5460 and 5420/5395 and the resistance lies at 5525 and 5548 and 5580.

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.

Nifty futures will face resistance at 5562, 5620 and 5660 levels and strong support on the downside lies at 5495 and 5465 levels.