Last Hour Buying Pushes Up Nifty

Markets opened with a slight negative bias and traded in negative territory for all but last 90 minutes. Nifty dropped to just around 5400 before some strong buying in key heavyweights. IT bigwigs TCS, Wipro and Infosys were the ones that really kick started the recovery and later the others like SBI, RIL and L&T too joined in. RIL came out with its tie-up with BP after the market hours and that should help market to retain the positive momentum. RIL stock should have a positive impact and it is expected to regain four figure mark. SBI has also been resilient and is likely to move up towards 2835-2850. L&T opened on a positive note but then struggled to sustain higher levels and dropped to around Rs 1610. But the rebound from these lower levels suggests that the stock has retained neutral to positive bias and could move up to around Rs 1720-25 and then even to around Rs 1765-1775. Overall, Nifty has found support just around 5400 and it looks likely that Nifty may not break 5375-5400 ahead of Union Budget. On the upside resistance could be seen as the markets heads higher to around 5650.  Some of the banking stocks like SBI, HDFC bank, Syndicate Bank, Allahabad Bank, BOB, BOI and IOB could see more upside. Others that are looking positive are Welspun Corp, HDFC, Educomp, Sobha, Bajaj Auto and JSW Steel.

Nifty has immediate support around 5450-60 and then around 5375-5390 while resistance is seen around 5560-70 and then around 5620.

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.

Weakness Persists in Banks and Autos

The corrective move gathered momentum on further weakness in interest rate sensitive sectors like banks, realty and Autos. Bankex shed more than 2% as banking counters capitulated further. ICICI bank , HDFC bank and SBI continued to slide downwards as did other smaller banking counters. Auto stocks were also under a bearish spell as 2-wheelers led the decline. Bajaj Auto and Hero Honda lost close to 4% each. FMCG turned out to be the best sector for the days as both ITC and HUL managed to close in the green. RIL was up for better part of the day but shed all its gains as higher levels attracted profit taking. Jindal SAW was the biggest gainer amongst the F&O counters as it gained almost 7% on extremely healthy volumes. Some other that bucked the overall negative trend were Mundra, Piramal Health, Jain Irrigations, HCL Tech, Sesa Goa, Gail, Asian Paints and Tata Power. Nifty slipped below 6100 and closed around 6080.

Nifty is likely to find support around 6025-6040 and its highly probable that we might trade between 6000 and 6150 for next 7-10 sessions. Weakness persists in banking and Autos while strength remains in Metal, IT, FMCG and Pharma. Banking has consistently underperformed for past 4-5 weeks now and some more downside cannot be ruled out completely. BankNifty that is trading around 11300 has short term support around 10800-10900., while stiff resistance is likely around 11600. Autos are also looking weak and in fact technical patterns of Auto majors is a bigger worry than banking counters. Bajaj Auto, Maruti, Ashok Leyland and even Tata Motors are looking weak. On the other hand, IT heavyweights continue to look good and more upside is likely in TCS, Wipro and HCL Tech. Some correction was seen in Tata Steel but it remains in an uptrend and stock could rebound from around current levels. HUL is sustaining above 320 and could target Rs 345-350 over next 2-3 weeks.

Nifty has immediate support around 6030-40 and then around 5980.

Markets Heave A Sigh Of Relief

Markets heaved a sigh of relief as institutional support came for important stocks like ACC, Axis Bank, ICICI Bank, SBI and BHEL in Friday’s trading. IIP numbers which surprised the market also helped to boost the sentiment of the market. Key benchmark indices surged on the last day of the week as investors sought bargains after recent steep slide. Market breadth was strong in contrast with a weak breadth in early trade as many small and mid-cap stocks recovered after suffering steep fall in the past few sessions. ACC counter witnessed big block deals and as a result the stock gained by Rs.75 to close higher at Rs.1075. Movements on Nifty still continued to be volatile.

It is a bit early to conclude that the worst is over and one needs to assess the market closely in the coming days to get more clarity about the short term direction. However, the fact that bigger investors have started purchasing frontline stocks like OBC, Reliance, ACC and BHEL in a small way does gives hope that we are very close to the end of the process of bottom formation. Banking stocks like Axis Bank, OBC, Indian Bank chart structure in the lower time frame chart have started showing some signs of promise in the short term of a small upmove. Midcap and smallcap stocks still would need some more time to move up since recovery would initially will be restricted to frontline stocks. Hence, sticking to frontline stocks would be a prudent strategy in the current circumstances.

Nifty futures has strong support around 5850 and 5825 levels whereas it will face resistance around 5898 and 5930 levels.