NIFTY at 6000

Nifty opened and traded above 6000 during the early part of session. But again higher levels attracted profit taking as Nifty failed to make any significant progress beyond 6020. Profit taking gained momentum towards the later half as stocks like RIL, Tata Steel and some banking heavyweights pushed Nifty towards 5950. Some metal and auto stocks recovered towards end to pare Nifty losses to only about 16 points. Banking stocks failed to build on yesterday’s momentum as HDFC Bank, SBI and other banks attracted selling at higher levels. Some of the prominent losers for the day were Sintex, Hexaware, Onmobile, Auro Pharma, Bajaj Hind, Patni, EKC, Maruti, Reliance Infra, Bharat Forge and Wipro. Ispat however attracted buying and emerged as the biggest gainer amongst the F&O counters. Bhart was significant index gainer. Some other gainers were Syndicate Bank, Patel Engg, LIC Hsg, Yes Bank, Vijaya Bank, Core Projects, IFCI and Ranbaxy.

Nifty is at crucial levels as it trades around 6000. Despite today’s hiccup Nifty remains in an uptrend and we believe that it is likely to move higher after a brief consolidation. The immediate support is around 5930-40 while stronger and significant support levels are 5870- 80. Banks could play a significant role in deciding how far Nifty moves as short covering in banking heavyweights might create strong momentum for Nifty. On the other hand, if the short covering fails to materialize in next couple of sessions, it might force longs liquidation and that could put pressure on indices. Clear uptrend is still seen in some Auto counters, metals and  IT heavyweights. As mentioned yesterday clear breakout above 11700 in bank nifty would be critical for Nifty’s momentum. Bharti, Yes bank, Indusind Bank, Hindalco, Cipla and JSPL are looking positive.

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

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.

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.

A Positive Week For Nifty

It was a relatively better week for the markets as Nifty managed to gain around 2%. The sentiments remained brittle and the threat of breakdown loomed throughout the week but IT and metal stocks helped indices to stay in the positive territory. BSE IT index was the biggest gainer as it gained over 5% and moved to new all time high. Both Infosys and TCS also hit new highs were the major gainers of the week. Metals also did well with Tata Steel and Sail gaining over 6%. Banks however remained under pressure as most banking counters posted weekly losses. Auto also came under pressure as Tata Motors was the only Auto major to post decent weekly gains. Mid caps saw some value buying in the later part of the week. RBI left all its policy rates unchanged but did infuse some liquidity in the system by lowering SLR. Inflation remains a threat and RBI might be forced to take a hawkish stance in next policy meet.

Nifty oscillated between 5850 and 5950 in the last two sessions and good news is that 5850 has emerged as a decent short term support. Nifty closed just around 5950 on Thursday and follow up in momentum on Monday could mean that Nifty gives a minor breakout. Sustained trades above 5960 could open up targets of 6070-6080 over next week. Couple of successive closes above 6025 would be technically significant as that would suggest that the correction has indeed ended and market might make another attempt at taking out all time high. The behavior of past two weeks also suggests that it would be different sectors that would lead Nifty to 6300- 6350 again. Oil&Gas, IT and Metals are showing clear leadership capabilities with Infosys, TCS, Tata Steel and RIL beginning to see some momentum. Bank index has strong support around 10850-11000(current value 11424) and may stabilize around current levels but could continue to be volatile. Investors with atleast 6-9 months perspective might look at accumulating stronger banking counters like BOB, Indusind Bank, IDBI, Central Bank, ICICI bank, Federal Bank, KTK Bank and Yes Bank. This is for patient investors and don’t expect instant gratification. Trading momentum is seen in Tisco, TCS, Wipro, Mphasis, Polaris, Ispat, Auro pharma, Bharti, SKumars, Chambal, Tata Chem, Petronet, IGL, GSPL, Hexaware and Renuka.

Nifty has support around 5865-70 and then around 5825-35 while fresh move is likely above 5960.

Banking Stocks Hold Nifty Down

The 3 day rally was interrupted as Nifty failed to move past 5950. The global cues were also not helpful as most of the Asian as well as European markets were flat or negative. Banking led the decline as after a weak-ish rebound of past 3 days almost all banking stocks resumed their southward journey. SBI slipped below 2700 while other major banking losers were Uco Bank, Dena Bank, Indusind Bank, Can bank, Allahabad Bank and Indian bank. Heavyweights like RIL, Bharti, Tata Steel and IT majors did try to positively influence the indices but failed to provide enough momentum. OMCs also bounced back but were unable to hold on to all intraday gains. Some of the prominent gainers were KS Oils, Patni, IGL, HPCL, BPCL, PTC, Ispat, TCS, Dabur and Apollo tyres. Losers included KFA, Hero Honda, DLF, IB Real, SCI, IFCI, Jet, Titan, Escorts, HDIL, SKumars and Punj Lloyd. The new listing MOIL opened on a strong note but found sustained selling pressure throughout the session and gave up more than Rs100 from its intraday peak. Overall breadth was negative.

Nifty failed to move past 5940-50 and slipped below 5900. It was a typical 3 day rebound formation followed by continuation of downtrend again. This pattern was more prominent in almost all banking counters that continue to show momentum on the downside. 5945-5960 now becomes an important resistance to tackle and a sustained move past this zone would be needed to create some upside momentum. Nifty found support just around 5870 but might slip to around 5820-30. IT heavyweights have emerged as the safe bets in current controversial scenario and are providing some support to the indices. Both TCS and Infosys have bullish patterns and could see more upside in coming sessions though it may not be a one-sided kind of move. IT heavyweights alongwith Tata Steel, RIL, Bhel, L&T and Bharti remain buy on dips candidates while banks and financials alongwith Realty counters should be avoided as of now for buying purposes.

Nifty has support around 5865-70 and then around 5825-35 while fresh move is likely above 5950.

European Markets Help Nifty Cross 5900

It was a volatile opening to the week as Nifty fluctuated in and out of positive territory. After a positive open to the trade Nifty suddenly lost significant ground as Nifty slipped below 5800. Positive open at European markets not only help recover ground but also to move up sharply in the positive zone. Finally, Nifty closed above 5900 up almost 50 points. Recovery was led by RIL as stock moved to around 3 weeks high at 1046. Banking looked weak for most part of the session but recovered significant ground towards last one hour. Capital goods were also in demand as stocks like Bhel, Siemens and later L&T found buying at lower levels. Some of the prominent gainers were SKumars, KS Oil, Hexaware, JSW Steel, Pantaloon, IRB, Ruchi Soya, IBReal, Jindal Holding, Petronet, APIL and Welcorp. Cement turned a bit weak after sharp Friday surge while some other stocks to lose ground were Uniphos, ALL, ITC, Rolta, M&M and HPCL.  

Nifty sustained above 5800 and later found enough muscle to move past 5900. Last week Nifty made a panic low at 5720 that was higher then the previous panic low of 5690. The late surge took Nifty past 5880-90 that was looking like a significant resistance. Broadly, sustained trades above 5930-40 would suggest that we have formed a decent bottom at around 5700. Nifty is likely to challenge the recent swing high of around 6070 if the resistance at 5930-40 is successfully negotiated. RIL seems to be taking the lead while the leaders of the previous rally banking and Autos are either correcting or consolidating. Bhel, APIL, Siemens and L&T are also showing positive bias and it suggests that Capital Goods could also take the lead whenever the next upmove begins. Tata Steel and Bharti are the other two heavyweights that are likely to lend support to any upmove. The above mentioned names are the ones that could be accumulated on bad days for decent returns over next 4-6 weeks. The battered mid caps are also showing early signs of recovery but short term trades should be avoided in mid caps and only good quality mid caps be accumulated with 3-6 months investment horizon in mind. 

Nifty has support around 5825-35 and significant one around 5740-50 while fresh momentum is likely above 5940.

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.