Monday, April 18, 2011

Technical Outlook : Flat actions for the week.

Market Outlook: Indian markets are expected to open flat mainly on the back of mixed support from the global counters. We are now into earning season which will keep markets on stock specific actions rather than industry. Lackluster Infosys results and rising inflation and possibilities of further rate hikes will weigh heavy on the minds of investors. On the global space Wall St week ahead: Earnings stumbles could awaken bears Asia trading mixed; Hang Seng flat, Nikkei down. Overall outlook for the markets today is that of cautious optimism with 5800 levels as a major support.

Results today:

Global events to watch.

Þ Housing Market Index.

Global indices Update @ 8:

Dow Jones : 12341 (+56.68)

NASDAQ : 2764 (+04.43)

Nikkei 225 : 9573 (- 18.48)

Hang seng : 24083 (+74.98)

SGX CNX Nifty : 5830 (+05.00)

Gold (USD/t oz.) : 1497 (+01.20)

Nymex Crude (F) : 109 (- 00.64)

INR / 1 USD : 44.52

Technical Outlook : Flat actions for the week.

The sharp rise of the earlier day proved to be a flash in the pan as the prices dropped once again on Friday on the back of some weak advices from Infosys. The reaction of the market seems to be a bit of a surprise as one had felt that the impact of Infosys on market trends is by now a thing of thing of the past. It seems therefore to be more of a pointer to the sentiment rather than something very specific to the fate of the company as well as other tech stocks. When the market responds unduly to some news it shows its hand about the dominant sentiment. Considering the exaggerated response to the guidance shown by Infy, one should ignore the impact on the stock and instead concentrate on what is being suggested for the market as a whole. Here the news is certainly not very good because it points to a weak prevalent sentiment.

Such sentiments would imply we should be looking for declines rather than advances. We should be looking for resistances to hold rather than break. We should be looking at supports to give way rather than withstand attacks. In that context lets look at the signals as they emanate from the attached chart of today. the NF hourly is shown here with our moving average band technic. The prices are seen attacking the bands once again after a robust rally the day before. Will this hold or will this fail? Note that the positive excursion above the bands occurred way back on 23rd March and has been in existence since then. So that is a good enough period to expect the uptrend to run out of steam. Hence be alert for the support breaking today rather than holding. It is also noted that the momentum indicators rallied sharply but continue to remain in the corrective mode rather than build anything fresh. Hence momentum also sides with what sentiments are indicating right now.

Confirming this further is the finding in the options build up. We saw a downward shift of Call action to the 5900 strike (from 6000) and liquidation in positions of all the puts. Both these indicate a market that is making room for more declines to the lower side. So be warned that more declines are likely here. 5700 put has the highest OI in puts and could be a good support ahead.

Strategy for the day: Open could be weak as there is nothing positive around for the moment. Expect a drift downward rather than something trended. Action, as discussed above, seems to be ready to shift to the downside. Hence short options positions created earlier for range action should be covered now. Look to fade intra day rallies in stocks as well rather than chase breakouts upward. Look for stocks that are breaking recent support zones as shorting candidates. Stop momentum investing for now.

Stocks to buy if market is strong


This stock has seen some value buying since the start of the month and has been higher tops higher bottoms which suggest the stock is in a short term uptrend. On Friday it has managed to close above the strong horizontal resistance level of 260.Good close suggest buying momentum in the stock.RSI has take good support at 60 levels which indicates the stock is in a bullish phase. Look to BUY




Buy above 262

3 points

266 / 268 / 270


This stock has been 1 of the strongest stock on Friday’s trading session when the market showed weakness throughout the day. Goods buying volumes on the stock suggest bulls have been acting strong in the counter. It has also managed to cross the horizontal resistance on the daily charts indicating more upside potential.RSI has also managed to cross crucial 60 levels which suggest good strength in the counter. Look to BUY




Buy above 1655


1668 / 1675

Stocks to sell if market is weak


This stock is in downward trend since many trading sessions and there is no sign of recovery yet. On Friday this stock has broken its important value support around 1080 levels and there is selling seen on every fall in price. Rsi is also showing downward momentum helping bears to make room. Look to go short.




Sell below 1074

10 points

1062 / 1056


Nifty Buy above 5875 with stop 5855 for 5935.

Sell if below 5800 stop 5826 for drop to 5712.


Sell Indiainfo below 74 stop above 75.5 Tgt 72/71/70

Buy Uco Bnk 121 stop 119 for rise to 125

Stocks in Action for the day: Aban Offshore, Zuari Industries, LT Foods, Reliance Industries

Eros International has deployed global digital content services group Prime Focus Technologies’ CLEAR content operations management platform to administer its extensive content library.

Aban Offshore has redeemed the outstanding foreign currency convertible bonds that were issued in April 2006.

Zuari Industries has withdrawn the petition before the High Court of Bombay at Goa for the sanction of scheme of amalgamation of Gobind Sugar Mills with the company.

Pennar Engineered Building Systems, a subsidiary of Pennar Industries, has bagged an order from L&T for the first phase of construction of Pre Engineered Steel Buildings for Chennai Metro Railway.

Helm Bank, a Colombian private financial institution, has selected Oracle software and hardware to run its core banking, customer-facing services and marketing functions.

Great Eastern Shipping has entered into a contract to sell three VLCCs being built at Hyundai Heavy Industries, South Korea. The vessels will be delivered to the buyer upon delivery from the yard.

MRF reported net profit of Rs 89.85 crores for the quarter ended March, 2011 against Rs 95.82 crores in the same quarter a year ago. Net sales grew to Rs 2381.6 crores against Rs 1767.6 crores in the corresponding quarter previous fiscal.

LT Foods has decided to acquire two offshore companies Rice N Spice International and A & A International for total consideration of Euro 323000. It plans to convert them as wholly owned subsidiaries. Rice N Spice International and A & A International Limited' are engaged in distribution business of Basmati Rice and other food products.

Mahindra Satyam has bagged a large Enterprise Resource Panning (ERP) contract from Qatar University. The contract, which will be implemented over a nine-month period, will cover the end-to-end implementation of the Oracle E-Biz Suite R 12.

Defying an oil ministry directive, Reliance Industries has refused to sell natural gas to power and fertiliser plants by cutting supplies to non-priority sectors like steel and refineries, saying the move has financial and legal implications.

Malvinder and Shivinder Singh are selling their 86% stake in the country’s largest medical diagnostic company Super Religare Laboratories, ahead of its public issue, to Fortis Healthcare for an undisclosed amount.


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