Market Outlook: Indian markets are expected to open in positive momentum and trade in the range of 5320-5380. Markets are likely to witness a relief rally this week on the back of normalcy in Egypt.
Global events to watch
Þ No Major events to watch
Global indices Update @ 8:
Dow Jones : 12273 (+43.97)
NASDAQ : 2809 (+18.09)
Nikkei 225 : 10686 (+80.78)
Hang seng : 22962 (+133.0)
SGX CNX Nifty : 5353 (+40.50)
INR / 1 USD : 45.76
Technical Outlook : Return of the bulls.....?
Superb recovery post the event. Market had earlier tanked further before the IIP numbers were released, producing some more long position bailouts in fear. But soon after the announcement, even though the figure was much lower in comparison, nothing much happened to the prices. Once again, this proved our oft-stated line about the reaction to the news being much more important than the news itself. It seems like the market was already anticipating this low number or probably worse. Values were all quite oversold, as we have been discussing for a few days and probably got even more oversold in the morning. As a result, the classic short covering rally came thru and it sent the index and almost all the stocks soaring upward in a super show of bullishness. No doubt this would have come as a big relief to most people (not of course to those that sold in the morning though!). It held into close and was widespread so every one seems to have engaged in either short covering or fresh buying or both.
Now the key thing is will it continue? We don't want to rain on anyone's parade but our job is to go by the weight of evidence. In the last couple of days we had been maintaining that the index had to reach above 5335 for us to think bullish again. Well, the rally stopped short of that level. But given the force, we want to be a bit charitable now and flip the case to the other side. Ideally, if the market has to move higher now, then it should not go below 5300 levels now. We are happy to take what it gives on the higher side but what we don't want to see now is weakness. On the upper side, as can be seen on the chart, the prices are all set to run into moving average as well as short term trendline resistances. Hence the going is not to be easy. RSI has sped ahead. but has it moved too sharply that it is in danger of creating a negative reversal pattern? Quite possible. So we need to continue to remain on alert here until the all clear is flashed. Which is why we have placed the lower band at 5300 levels. Don't really want to surrender any of the gains now.
On the daily chart the momentum indicators have not sealed in the low with a divergence. Until then we do have the danger of another retest of the bottom. So we cannot get gung ho on the upper side. Trade for a rally, yes but don't identify this rise as a new uptrend. More evidence on that is required. Option traders were quick to flip around and begin shorting puts when the rally began to take hold. But equally, we have some big call shorts positions too still outstanding. this week's early trade should clarify as to which way the wind shall blow.
STRATEGY FOR THE DAY
Expect some better open and for some continuation of the upmove. Many people are of the mindset that the values are attractive for a buy and are likely to particpate in a rise. We have defined the support zone at 5300 and dont wish to see it broken if rise has to sustain. Keep that in mind. On the higher side push beyond Friday highs would be a sign for day traders to get in with some longs. All stocks and sectors will participate. Look for beaten down stocks of last week to show more recovery as short covering continues.
Stocks to buy if market is strong | |||||||||
SINTEX INDUSTRIES | |||||||||
The constant fall in this counter got arrested last month and the prices have been attempting to recover. However a near term descending trendline resistance kept the prices in check. On Friday buoyed by some polite sentiment bulls finally got into the act on to stage a breakout. As daily chart shows some promise and volumes are robust open can look to buy. | |||||||||
| |||||||||
| |||||||||
SYNDICATE BANK | |||||||||
banks were one of the key sectors which got damaged in the recent carnage. The hope of resurgence was displayed on Friday as banks rallied to show some promise. The daily charts of this counter too displays a bottoming out around 99 levels . A subsequesnt upward traction on volumes highlight bullish sentiment prevailing. Go long. | |||||||||
| |||||||||
Stocks to sell if market is weak
| |||||||||
PHOENIX MILLS | |||||||||
Bears are tearing down the prices of this counter. Every attempt to move higher is met with supplies indicating the steady selling pressure building up in this counter. With positive market scenario unable to cheer the momentum one can expect the downtrend to continue. Stay alert to go short. | |||||||||
|
FUTURES XPRESS |
NIFTY RECOMMENDATIONS FOR THE DAY |
Buy Nifty above 5350 with stop below 5314 for rise to 5430. Buy Nifty on dips to near 5290 stop 5275 for rise to 5365. |
STOCK FUTURES RECOMMENDATIONS FOR THE DAY |
Buy Baj Auto above 1260 stop 1250 tgt 1282 Sell will be initiate during the day, if any. |
Stocks in action for the day: Cairn India, Shree Renuka Sugars, Educomp Solutions, K S Oils
No comments:
Post a Comment