Monday, March 28, 2011

Market Outlook: Indian markets are expected to open flat in positive grounds

Market Outlook: Indian markets are expected to open flat in positive grounds and trade range 5640-5680 while higher crude price could keep pressure on rallies. On the global front Wall Street ends higher on expectation of positive earnings while Asia trading mixed; Hang Seng up, Nikkei down. Overall outlook for the markets today is that of cautious optimism with 5580 levels as a major support.

Global events to watch

Þ Personal Income and Outlays

Þ Pending Home Sales Index

Global indices Update @ 8:

Dow Jones : 12220 (+50.03)

NASDAQ : 2743 (+06.64)

Nikkei 225 : 9501 (- 34.49)

Hang seng : 23173 (+14.68)

SGX CNX Nifty : 5681 (+07.00)

Gold (USD/t oz.) : 1,428.10 (+00.50)

Nymex Crude (F) : 105.30 (-00.10)

INR / 1 USD : 44.77

Technical Outlook: As we said, 18470-500 as decider level, Sensex opened with upward gap at 18480.69 on Friday and rose higher above 18800 mark, consolidating in between important levels 18480 to 18560 in mid session trade. Sensex ended the day with huge gain of 464.90 points where as Nifty closed with gain of 131 points.

The formation of Huge bull candle on daily chart followed by indecisive “ stalled pattern” is indicative of further strength in the trend. In case, if Sensex succeeds to hold above 18950-19050 level which is acting as strong resistance for intraday trade, it will continue rise at 19300 levels. On the contrary, if it fails to hold above 19050 and remains below 18950, then it will see at least intraday correction.

Overall, 18500 will act as main medium term support levels for the current rally. As long as Sensex holds this levels, the possibility Sensex testing 19300 or more levels remains wide open.

In intraday, 18950-19050 in Sensex, 5720-5750 in Nifty will act as strong resistance levels for the days. If indices fail to hold these levels, they will see fall in at least intraday trade.

Resistance levels

Sensex ( last close 18815) 1) 19050 2) 19200

Nifty ( 5654) 1) 5750 2) 5790

Nifty Fut. ( 5674) 1) 5770 2) 5810

Bank Nifty ( 11451) 1) 11650 2)11800

Support levels

Sensex 1) 18650 2) 18500

Nifty 1) 5610 2) 5565

Nifty ( Fut) 1) 5630 2) 5585

Bank Nifty 1) 11280 2) 11150

Weekly Outlook: Sensex gain above 900 pints while Nifty gain 284 points in a week. Sector wise all sector performed well except small cap which closed in negative by 0.31%. Major contribution made by Reality sector which gained 8.9% in week followed by Banking, IT, Teck. and Capital goods which closed respectively 6%, 5.67%, 5.6% and 5% gain.

The formation bull candle with higher lower shadow pattern against previous week’s bearish continuation pattern implies upside direction of the market. On higher level, 19200-300 will act as strong resistance for the week and there is good chance that Sensex may see 2-3 days fall above 18400 if it fails to hold these levels.

Weekly Resistance

Sensex 1) 19200 2)19400

Nifty 1) 5790 2)5850

Weekly Support

Sensex 1) 18500 2) 18200

Nifty 1) 5460 2) 5400

Stocks in Action for the day: Usha Martin, Natco Pharma, Indiabulls Financial Services, Tata Steel

IT companies moved higher as sentiments turned bullish following encouraging earnings and outlook by US technology companies.

Usha Martin has arranged $125 million via external commercial borrowing. This is to part finance company's capex plans of Rs 1200 crores to strengthen its cost competitiveness in steel business.

Xpro India has approved entering into business purchase agreement with SI Group - India for sale of its Thermosets division situated at Ranjangaon on a slump sale basis.

Natco Pharma surged higher after reports that it is considering sale of SaveMart Pharmacy in the US.

Hindustan Zinc moved higher after reports that it has increased price of zinc and lead by Rs 1200 a tonne and Rs 4400 a tonne respectively.

Infrastructure Development Finance has raised Rs 2280.55 million through public issue of long term infrastructure bonds (tranche 3 by IDFC).

Union Bank and Indiabulls Financial Services have got the approval from the market regulator SEBI to enter the mutual fund business.

ZEN Technologies’ order book size stands at about Rs. 75 crores. The company’s venture European market has been put on hold due to financial crisis in the Europe.

Tata Steel UK, a subsidiary of Tata Steel, has entered into a definitive sale agreement to sell certain assets of Teesside Cast Products to Sahaviriya Steel Industries UK.

Credit Analysis and Research has assigned BBB- rating to Long/medium term facilities of Websol Energy Systems. It has also rated the company’s short term facilities with PR3 rating.

GAIL has set a target of transmitting 118.2 MMSCMD of natural gas from domestic sources and through LNG route during FY 2011-12 under the memorandum of understanding singed with ministry of petroleum and natural gas.


No comments: