Tuesday, March 8, 2011

Technical outlook: Oil and Politics takes its toll...

Market Outlook: Indian markets are expected to scale down on the back mixed global support and concerns on higher crude volatility. Asian markets are trading firm; Hang Seng, Nikkei gain While Wall Street ends lower as Brent crude dips from highs of $118. Overall outlook for the markets today is that of cautious optimism as the bulls must hold the Nifty above the 5400 levels sustain ably to manage an upmove in the coming session wherein market has a strong resistance at 5500.

Global events to watch

Þ No major events to watch.

Global indices Update @ 8:

Dow Jones : 12090 (- 79.85)

NASDAQ : 2745 (- 39.04)

Nikkei 225 : 10545 (+40.42)

Hang seng : 23353 (+40.37)

SGX CNX Nifty : 5461 (- 21.50)

INR / 1 USD : 45.13

Technical outlook: Oil and Politics takes its toll...

Market opening down with a gap put the seal on things, as it were. Coupled with the DMK problem and rising oil prices, the trends were hard pressed to stage any rallies during the day. But towards the latter part of the day we did see some life come back into the index as some brisk short covering emerged on rumors that the political tangle may be avoided. The NF traded at a premium of about 15 points to the spot suggesting a lot of shorts getting covered.

Prices are still in a range and within a range they always remain sensitive to news. So be on the watch our for DMK issue getting resolved, to oil related news, to some news on Dollar etc as all of these will impact the prices. Also, volumes are not too high (yesterday was a low volume day for the market as a whole) and volatility spikes are greater when volumes are down.

The daily pivot as well as the weekly pivot are now both placed around the 5450-60 levels. That makes today's trades around this level quite significant. So do watch how the market fares around this pivot level. Yesterday's sharp dip below the weekly pivot and then the spirited pullback towards the later part of the day has reset the odds to neutral once again. But we need to see follow thru action today to build on that recover from the lows. If it fails to happen then the trends will be in trouble.

We have three time pivots for this month. The first was on the 4th and was a high. The next is on the 10th and the third one is around 18th. We can expect the pivot on 10th to be a low considering that the market has rallied sharply into the first TCD and then wilted a bit. If this has to be so then we should be seeing the market softening today. So watch the action around the price pivot given above. Hourly chart attached today shows the index trading at the level of the MA bands. On the daily chart it is clearly below the bands. Hence give the benefit of doubt to the bears and not the bulls. Yesterday's gap zone at 5515 should prove to be a good resistance that needs to be crossed and held for bullish thoughts to be entertained.

STRATEGY FOR THE DAY: The DMK problem could have receded some but a good portion of the rally for this news was already done yesterday. So may expect a flat open and then trades will flow based on other news. Use the pivots as explained to judge the status of the trend for the day and then trade accordingly. if the prices fluctuate around the pivot, then consider that the trends are flat and so it would not be worth trading the indices. Wait for a clear move either above or below the pivot to trade indices today. Stocks continue to wear a very mixed look and hence look for news/events associated with stocks/sector and go for those for day trading.

Stocks to buy if market is strong


Prices have shot up sharply in the last couple of sessions on aggressive buying, slicing past resistances and moving higher. Yesterdays rise exceeded yet another resistance and has closed on a positive note despite overall market weakness. Looking good, go long.




Buy above 485

5 points

494-95 / 501 / 505

Or dips to 477-76

5 points

485 / 490 / 493


Looking at the daily chart we note that prices have been moving in a broad trading range in the last many sessions. We also note that several attempts have been made to move out of this range on the higher side. Yet another attempt is being made currently as well. Yesterdays razor sharp rise has created an opportunity to go long here. Consider buying.




Buy above 416

6 points

426 / 431 / 435

Or dips to 406-403

6 points

416 / 420 / 424

Stocks to sell if market is weak


Prices have been on a consistent decline in the last couple of weeks. Last sessions fall pushed prices to new swing lows and closed sharply lower. Yesterdays decisive downward push has triggered a fresh sell opportunity here. Trend continuing to look negative, sell.




Sell below 263

3.5 points

258 / 255-54

Or rally to 267-68

3.5 points

262 / 259


Buy Nifty above 5520 stop 5505 target 5585

Sell Nifty below 5435 stop 5460 tgt 5380


Buy RPower around 123-24 stop 121.50 tgt 128

Sell IBReal below 107 stop 108.50 tgt 103-01

Stocks in Action for the day: Satyam, L&T, Havells India, D B Realty, United Phosphorus, OnMobile Global

SEBI penalizes six i-Bankers for lax IPO procedures: Six top investment banks which managed the Coal India initial public offering have been barred from hiring some retail brokers for any share sale till 12,000 investors deprived of shares in the IPO due to technical glitches were compensated, potentially stalling any new offer. The market regulator has directed Citigroup , Kotak Mahindra , Morgan Stanley , Bank of America-Merrill Lynch, Deutsche Bank and Enam Securities to ensure that investors are paid before those retail brokers are hired for another issue,

Satyam Computer Services has signed a deal with Oman-based OMRAN to deliver major projects and manage tourism assets and investments in association with Bahwan IT, Mahindra Satyam’s local partner in Oman to implement Oracle ERP.

L&T to demerge or sell all assets under Rs 500cr: L&T will demerge or sell all its assets under Rs 500 crore. That's the word coming from its Chairman AM Naik, who expects to complete the restructuring of the company into focussed verticals by March 12,2012. The restructuring will be divided into verticals which will further have separate subsidiaries.

Havells India will hold a meeting with shareholders of Standard Electrical for the purpose of scheme of amalgamation.

Tata Communications has approved scheme of amalgamation of Tata Communications Internet Services (100 per cent subsidiary of Tata Communications) with itself.

Exelon Infrastructure has approved to sub-divide shares Rs 10/- each into 2 shares of Rs 5/- each. It plans to raise upto 200 crore through GDRs/ADRs convertible into equity shares.

D B Realty has informed that Shahid U Balwa has resigned as the managing director and also as director of the company with effect from February 09, 2011. The stock was at Rs 113.75, down 3.36 per cent on the NSE. It touched a high of Rs 119 and low of Rs 113 in trade so far.

United Phosphorus has entered into an agreement to acquire 50 per cent stake in Sipcam Isagro Brazil. The latter is 50:50 joint venture between Sipcam-Oxon Group and Isagro.

OnMobile Global will hold board meet on March 07, 2011 to consider and approve a proposal for issue of bonus shares

Tanla Solutions has launched TPAYmobile.com, a new cross platform In-application billing services for mobile games & applications.

NALCO has fixed March 16, 2011 as the 'record date' for sub-division of shares of face value Rs 10 each into two equity shares of Rs 5 each. The company will also issue bonus shares to the existing shareholders in the proportion of one bonus share for every one held.

Mahindra & Mahindra’s workmen at the Nasik plant of the automotive sector had resorted to a one day illegal tool down strike on Sunday to press for their demands of wage increase for a section of 1/3rd of the workmen. Production in all shops of the plant is back to normal from March 07, 2011, the company said in announced to the exchanges.

BGR Energy’s electrical projects division has secured a turnkey contract worth Rs 36.61 crores from Power Grid Corporation to be completed in 18 months time.

Hotel Leelaventure plans to reduce debt by sale of non-core assets worth Rs 950 crores and by issuing fresh equity shares to prospective investors

Adani buys 1st Russian coal cargo: Adani Enterprises has bought its first cargo of Russian coal in a bid to diversify its coal supply, Low freight rates particularly for capesize vessels were shrinking the difference in delivered costs for coal from origins such as South Africa, Colombia, Australia and Russia, allowing Indian importers to take a wider variety of coal


No comments: