Friday, February 11, 2011

Indian markets are expected to open in flat and trade in the range of 5200-5280

Market Outlook: Indian markets are expected to open in flat and trade in the range of 5200-5280. Overall markets are weak and the next logical target is near 5140 if market breaks 5,200 as crucial level to watch.

Results today: Aban Offshore, Amtek Auto, Bajaj Corp, Emami Infra, Gammon Infra, HDIL, HPCL, ITI, Kingfisher Airlines, MTNL, Pipavav Shipyard, Piramal Health, Tata Motors, Usher Agro, Berger Paints

Global events to watch

Þ International Trade

Þ Consumer Sentiment

Global indices Update @ 8:

Dow Jones : 12229 (-10.60)

NASDAQ : 2790 (+01.38)

Nikkei 225 : 10605 (-12.18)

Hang seng : 22774 (+66.27)

SGX CNX Nifty : 5229 (+04.00)

INR / 1 USD : 45.58

Technical Outlook :Chasing the trend......?

Another day, another new low! Thats the story of the market these days. We try to keep looking for something that would halt it but no, the market just does not appear to be interested. But as analysts we have to keep looking for those set of signals that will prompt us during the day if any reversal attempt is happening. So we present to our readers one more item today. Earlier ones have all been brushed aside but here we are, back with one more item.

Today's chart is NF 5 minutes with moving average bands, stochastic and some support markers. Lets take them serially. The prices have remained beneath the moving average bands since last Friday. A small attempt was made to cross the band yesterday but that was beaten back towards the end.Note that this is the 5 minute chart- the situation in the higher time frames (15/30/60 minutes) are far away from flashing any signals. We are featuring the 5 minute because we are trying to spot the change early. But so far nothing on that score yet.

Next the stochastic has flashed a minor signal of strength which would need to be worked on and built upon in case some positives have to occur. Third the support markers. Note that the earlier ones (derived from previous low pivots) have seen the index move down to touch them, the current rise has shown slightly more spunk than the earlier ones. Hence it is possible that we may not really head down to the level of the next marker, which is the region of 5198-5191.Note also that the prices have started moving laterally- which happens when the trend is about to change.

We acknowledge here that we are reaching, trying to find supports and bottom formations where they are not evident yet. The option action is not encouraging for a bottom yet. The activity has rolled down to 5200-5300 calls and 5100-5000 puts. This shows a shift of the action downward, something that happens when markets are creating room to go lower. So it is continued bad news on the options front. The main pivot for the index to cross continues to remain at 5330. Until then every upward push is just an attempt. Last five sessions have all been down days. So maybe time for some short covering rally? This aspect will be matched or spoilt by how many people have been doing bottom fishing during the week and choose to give it up if the market goes down today. So it is going to be an action packed day for sure.

Stocks to buy if market is strong


A massive fall in the last couple of weeks led prices to erode the short term trend further, caushing more damage to the trend and moving to a low of 183 last session. However bouncing up from that level and closing on a positive note, prices have created a bullish pattern. RSI has turned around from 20 levels signaling possibilities of a pullback ahead. Go long.




Buy above 211

6 points

221 / 228 / 232

Or dips to 203-201

6 points

213 / 218 / 221


On the daily chart we note that last couple of sessions have been witnessing some value buying at the dips. This can be verified by the long lower shadows in the last two days. This is also owing to good supports around that region - descending Gann line and trendline support. Yesterday prices bounced back well to end on a positive note. Volumes are improving and so are momentum readings. Buy.




Buy above 166

4 points

172 / 175-76

Stocks to sell if market is weak


Prices have got heavily smashed out in the last few sessions, cutting thru several good supports and moving lower. Yesterdays sharp fall has hit yet another new low and negated the previous sessions attempt to rally. RSI has turned down afresh from 40 levels. Go short.




Sell below 455

6 points

444 / 434 / 426

Or rally to 467-70

6 points

456 / 450 / 446



Buy Nifty above 5335 stop 5310 rise to 5410.

Buy Nifty on dips to near 5185 with stop 5160 for rise to 5255.


Buy Polaris above 181 stop 179 target 187-88

Sell Core Proj below 260 stop 262.50 target 255

Stocks in action for the day: Lanco, FSL, Allied, Zee, Tata Motors

Nifty changes: Grasim to replace Suzlon in the Nifty from March 25 (long overdue)

Unitech says: -Bear hammering of our stock to create panic -No raids by any agency at offices of company -Rumours of raids 'misleading, erroneous' -Rumours spread by vested interests with malafide intentions -Regulator should probe into these vested interests

Idea Cellular says -Dismayed by continual policy flip-flops -Arbitrary numbers portrayed as 'market based’ -Curious that spectrum holdings aggregated for some

Shiv Nadar HCL may consider restructuring if need arises -16-18% growth does not include export growth -Big IT firms including HCL will be able to beat 16-18% -IT will benefit from pent-up demand

Allied Digital board meet on February 18 to consider buyback

Zee Entertainment board meet today for buyback

Patni says deny taking any decision on delisting company

Firstsource (FSL) board approves proposal for Merger of RevIT Systems, wholly owned subsidiary with the company

Kingfisher Airlines in NSE F&O ban

Hindalco recovers half Novelis cost by making cash fungible & banking on to fund its Rs 23000 crore expansion plan in India (BS)

NTPC to issue to tender start direct import of coal to meet fuel shortfalls for its power plants (FE)

Lanco to hive off power business & plans to launch an IPO for its power business in September 2011 (FE)

Lanco to set up solar PV plant through its subsidiary Lanco Solar Holdings (DNA)

Hindusthan National Glass & Industries to set up 210 acre integrated glass complex valued at Rs 4000 crore at Naidupet in AP (DNA)

BEML to tie up with foreign firm for dredging to begin construction of aerospace equipment unit in Bangalore in first quarter of fiscal 2012 (DNA)

LVMH to acquire significant stake in Gitanjali Gems new arm valuing at around USD 100-125 million (ET)

Port of Antwerp signed a MOU with Essar Shipping Ports & Logistics to enter the port business in India (ET)

MphasiS mulling acquisitions in the BFSI & capital market space (ET)

SAIL to invest Rs 5000 crore to develop mines in Chiria & start mechanized mining in the next 3 years (ET)


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