Thursday, June 23, 2011

TECHNICAL OUTLOOK: Market movements neutralized.

Market Outlook: Indian markets are expected to open in a negative trend on the back of unconstructive cues from the global peers. On the global space Wall Street falls after 4 day rally on Fed's comments and Asian markets trading lower; Hang Seng, Nikkei down. On the overall basis we expect Indian market trade on cautious note with support near 5190-5220 and any positive breakout would be expected only after 5420.

Global events to watch for:

Þ Jobless Claims.

Þ New Home Sales.

Global indices Update @ 8:

Dow Jones : 12109 (- 80.34)

NASDAQ : 2669 (- 18.07)

Nikkei 225 : 9594 (- 35.43)

Hang seng : 21688 (- 171.9)

SGX CNX Nifty : 5266 (- 16.00)

Gold (USD/t oz.) : 1546.9 (- 06.50)

Nymex Crude (F) : 94.31 (- 00.48)

INR / 1 USD : 44.82

TECHNICAL OUTLOOK: Market movements neutralized.

For traders yesterday was somewhat of a write-off. the Nifty showed a range of 48 points while the Bank Nifty showed about 110 points. Now these ranges are tradable only by aggressive day traders who are looking for 10-15 points on the NF and similar on BNF. For the rest, it was no go. The only good thing that can emerge out of this is that yesterday was a narrow range pattern and usually, we get a trend resolution soon after a small range day. Will it be today? Sure can. Lets be prepared for it. the approach is pretty simple really. Just go in the direction of the break of either the high or low of yesterday. One caveat though. Since the range is small it is easy to engineer false breaks and therefore one should be ready for that too. so if there is a breakout and then prices reverse and go the other way with good volume and leadership, then jump ship and catch the new one. Don't think too much. There are indeed many people in this market who are capable of doing such a thing. Accept it and work around it.

IVs eased some to 19% while PCR upped a tad to 1.02. A couple of days of sideways action (although with narrowing range) has taken toll on the option prices. Straddles and strangles are losing value big time every day as expiry winds nearer. But if there is a downside break today then we could see IVs spike once again. If they do, then short straddles and strangles should be closed out. Keep a watch. Most market men expect a downward break as news flow seems to be negative. So not too many may be ready for an upside breakout. Be ready either way. On the lower side, a break of 5260 would be enough now to signal some weakness. More conservative people could wait for break of 5240. Market is already biased to upside after that sharp dip two days ago. If upmove occurs then there is room till 5330-40. Beyond these levels look for a trend to emerge and that has to be played with directional plays and not short options.

In today's chart note that that the dip of Monday was on a good price and time match using Fibonacci elements. Hence, if prices don't break down and start higher, one should act without hesitation as we would then be coming off a good price and time point.

STRATEGY FOR THE DAY: 5240/5280 continue to remain the lynchpins for the market trend for today too. Small range import has been discussed. be alert for trend evolution today and make sure to follow it if there is some good participation. Of course the market may simply decide not to do anything either. We have to be prepared for that too! Stocks are currently lacking any directional strength and are ready to turn at the drop of a hat. So be sensitive to that fact and dont hang around asking too many questions in case trends change quickly

Stocks to buy if market is strong:

TIME TECHNO: Despite choppy session this counter was in bullish mode and prices sustained at upper levels. This stock is holding its ascending trend line and forming positive pattern on the chart. Bulls are totally active in this counter which reflects in the movement. Prices have crossed the critical moving average in the last week and after sustaining it has indicated fresh longs. Maintain positive Bias.




Buy above 68



Stocks to sell if market is weak:

TATA ELXSI: This counter is in downward trends since January and on Wednesday this months spurt got fizzled out completely. The sharp declines yesterday also breached value area supports around 232 levels and closed below it. Rsi has also slipped below 40 levels signalling weakness. Consider going short here.




Sell below 230

2 points


AMTEK AUTO This Auto counter is in bearish trend since a month and prices are fizzling out making counter weak. Prices have broken its 61.8% Fibonacci resistance and given close below it indicating fresh sell signal. This counter is trading below its 50 DMA which retains bearish view in the counter . Go short.




Sell below 159

1.5 points


Or Rally near 162

1.5 points



Sell Nifty below 5240 stop 5265 for fall to 5185.

Buy Nifty above 5312 for a rise to 5340-5365, use a stop at 5285.


Buy HDFC above 646-644 stop below 638 tgt 652-655
Sell BGR energy below 438 stop above 444.10 tgt 430-428
Stocks in Action for the day: Titan, Bosch, Thermax, Redington, Emami

Finance Ministry mulling a 15% duty on the sugar imports with an additional 4% AD Valorem duty – BS -EGoM meeting likely today to allow 1 million tonne sugar exports

IPO Corner Readymade Steel India -IPO set to open on June 27 with the price band of Rs 90-108/sh Birla Pacific Medspa closes today -Overall 0.7 times (x), QIB's subscribed 0.99x, NII nil, retail 0.58x Rushil Décor closes today -Overall 0.86x, QIB's subscribed 0.23x, NIII nil, retail 2.12x

CCEA unlikely to meet on Thursday: Sources -Oil Ministry said attempting to take Cairn Vedanta Deal to CCEA this week

CBI: Exclusive Sources say Loop Tele may not be named in CBI charge sheet -CBI re-assessing evidence against Loop Tele -Reassessment after fresh MCA report that came out in April -Khaitans & Ruias not associates -MCA earlier said Khaitans & Ruias were associates -CBI sources say CBI waiting for Mauritius inputs to finalise chargesheet -Charge-sheet to be ready by July 1st week Finance Ministry -Sources say support abolishing non-compete fee -Support raising open offer trigger from 15% to 25%-Do not agree with 100% mandatory open offer -Achuthan Panel favoured 100% open offer. New takeover code on June 30 SEBI board agenda

Emami Group mulling to buy Actis 80% stake in Sterling Hospitals (Mint)

BJP Minister’s son Sandeep Kanwar buys farmland for Videocon in Chattisgarh, were he is setting up 1200mw power plant for the company (TOI).

Standard Chartered PE & BlackStone are vying to acquire a large chunk of the promoter stake in Redington India for around Rs 500 cr (TOI).

Thermax to buy a European co in the waste water management sector to invest around $ 100 million for the acquisition (DNA).

Oil Minister says can’t blame RIL for KG D6 capex hike unless the company pocketed the money.

IRDA rejects demand of insurance companies to allow listing after 5 years of operations, 10-year norms to let only ICICI Pru, HDFC Life and SBI Life to qualify – FE

Tata Steel gets Rs 585 crore in arbitration settlement between its UK subsidiary & international buyers that broke an off take agreement with its TCP plant in England

RIL in talks with Wadhwa group to jointly develop a 17 acre land parcel in BKC & the company may receive over Rs 1200 crore – ET

Swedish based SAAB AB in JV with Mahindra Satyam to establish a joint technology centre at its IT solutions provider’s facilities – ET

NHPC to invest Rs 2400 crore in three joint venture projects in J&K with PTC India– ET

Siemens bags orders worth Rs 124 from I Bulls group and Rs.319cr from Power Grid

Omnitech board has approved the allotment of 8.6 lakh eq/sh pursuant to conversion of warrants

EL Forge fixes June 30 as record date for rights issue

Bank of Baroda: Ex Dividend Rs 16.5/sh

Bosch: Special dividend of Rs 85/sh

Titan Industries: Bonus Issue 1:1 & Stock Split from Rs 10/sh to Rs 1/sh

F&O Ban: Kingfisher Airlines

Chinese auto major JAC eyes India entry

Tata Steel accepts $130-mn to settle UK plant loss

IndiGo signs $16-bn deal for A320neo, A320 planes

FM plays down fear of below-normal monsoon

Fertiliser cos may soon get full freedom to hike DAP rates


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