TECHNICAL OUTLOOK: Caught under negative grip..

Market Outlook: Indian markets are expected to open in a negative terrain on the back of unconstructive sentiments on the global space. On the global space Wall Street declines on uncertainty over debt talks US markets ended sharply lower, following a Fed report that said pace of economic growth moderated in many districts and amid growing uncertainty over the ongoing debt talks in Washington and Asian markets follows the heat trading lower; Hang Seng, Nikkei down. On the overall basis we are cautious on Indian market trade with support seen near 5500 if broken can even test 5450 in the near term and any positive breakout would be expected only after 5740.

Results today: ITC, ONGC, HUL, Ambuja Cements, ACC, PNB, HCC, NMDC, JSPL, Arvind, Titan Industries, IFCI, Sun Pharma, Bata India, Bajaj Electricals, Gujarat Pipavav, Areva T&D, GSFC, Welspun Corp, Religare Enterprise, Corporation Bank, Eclerx, Andhra bank, SRF, Vijaya Bank, IOB, Kesoram, Gujarat Alkalies, MRF, Tulip Telecom, Jagran Prakashan, Kewal kiran, JM Financial, Dishman Pharma, TNPL, Zee Learn, GNFC, National fertilizers, Navneet publications.

Institutional cues: FIIs net sell $9.55 mn:

o FIIs net sell USD 9.55 million in the cash market

o MFs net sell Rs 204.7 cr in the cash market

o As per provisional data of July 27, FIIs were net sellers of Rs 12.93 cr in the cash market. FIIs were net sellers of Rs 1283.65 crore in the F&O market. DIIs were net sellers of Rs 0.19 cr in the cash market.

Global events to watch for:

Þ Jobless Claims

Þ Pending Home Sales Index

Þ Bloomberg Consumer Comfort Index

Global indices Update @ 8:

Dow Jones : 12302 (-198.7)

NASDAQ : 2764 (-75.17)

Nikkei 225 : 9935 (-112.1)

Hang seng : 22268 (-278.1)

SGX CNX Nifty : 5509 (-39.00)

Gold (USD/t oz.) : 1617.5 (+00.20)

Nymex Crude (F) : 96.92 (+00.17)

INR / 1 USD : 43.94

TECHNICAL OUTLOOK: Caught under negative grip..

When the market failed to show anything on the upside it was a warning to expect a slide. It came within a short time as the low of the earlier day was broken. Prices dragged on a bit lower but absence of any major built up long prevented any big declne. As had been indicated in yesterday's letter we were wary of the fall as it prfesaged more on the way in case there was a continuation. We do seem to have got that continuation. Most Bank stocks were down as were some of the other interest rate sensitives. So, selling is afoot and we are unlikely to be reprieved. Hence readers have to approach the market right now with some bearish bias.

The attached chart is Nifty future 60 minutes. It can be seen that recent set of days had unclear trends as the index chopped the moving averages on either side. But inability to make further gains after a positive move was a hint that bulls were not really up to it. This evidence has to be seen in the context of the set up that was forming over the last few days (the price and time match that we had been speaking about). Now the prices are definitely below the bands and have flashed a sell signal. The RSI is also poorly placed with it slipping into oversold area and suggesting that there may be more to come. The daily chart with the same set up shows the situatoin to be somewhat neutral. It will turn bearish if we see the index move and stay below 5540 levels today. So be alert for that and act on that signal in case you do get it. Next support on NF is not visible till 5450.

Bearish intentions are also revealed by the options traders as they piled into higher calls in both July as well as August series. With expiry creeping up on us by today, it is obvious that July has been a truncated month in terms of monthly ranges (unless something extra ordinary happens today). So it looks as if all the action is set to happen in August. AS of now, we have to look for some downward range expansion first in the coming month and hence bearish option set ups (not aggressive) like put ladders (56-55-54) or ratio spread (55-54 1x2) could be looked for. We are not looking to take this into expiry of course and would be looking to close them out when we are in the money.

Cap goods stocks are moving aggressively lower. Bhel reached some supports but a break of 1800 would probably set up 100-150 points lower move. L&T has enough room to drop if 1725 is lost. These are heavies on the index. On the bullish side, ADani Ent is stil charging higher. There is talk about IPO of Adani Mining coming out. Also some loose talk that Adani Power is the only one from the group that has yet to rally and that it might. Charts are not too supportive of that right now though. Two of worst bank charts (from day to 1-2 day trading perspective) is IOB and Indian Bank. Both have broken some nice consolidation bottoms. Use any intra day rallies to short. Both are in futures.
Like we wrote yesterday, the interest is back in UTV. More likely. Something look afoot in Oswal Chemical. Chart suggesting more advances ahead. Ultratech cement showed a nice upside breakout on great volumes on super results. More likely ahead.

STRATEGY FOR THE DAY: Expect continued pressure on the market and hence lower levels to be achieved. If weak from the start of the day, can sell at lower levels also. If it rallies up then too its a sell. Bank stocks are weak and hence bank nifty too is a short. Can look for a target around 10630 for BNF. Many leader stocks had raeched some short term supports yesterday and if they are below yesterday lows then there is sufficient room on the downside for the trade to become a positional play rather than a day play. So be alert about this aspect and trade suitably. It of course goes without saying that if the lows do not break for any reason then we could be looking at a small rally. But over all trend remains down so we continue to look to short even if there is a rally. Halt on the momentum investing for today.

Stocks to buy if market is strong:

SKS MICROFIN Sharp spurts seen early this month met some strong road blocks soon into the rally - 200-EMA and 23.6% retracement of the last fall and not being able to get past them, slipped into a corrective phase this week. Yesterdays continued fall has kept the bearish pressure on. Sell.

Entry	Stop	Target
Sell below 478	6 points	468 / 460 / 454
Rise near 490	6 points	480 / 482

COX AND KINGS A strong descending trendline resistance has been obstructing any upward movement in this counter and keeping the selling pressure on. This can be verified looking at the daily chart. Last couple of sessions have seen a fresh drop from the same resistance. Momentum continues to remain weak. Sell.

Entry	Stop	Target
Sell below 193	1.5 points	190 / 188
Or rally to 195	1.5 Points	192 / 191

Stocks to sell if market is weak:

MADRAS CEMENTS This cement counter turned out to be one of the top movers last session, despite market weakness and closed on a high note. Looking at the daily chart we see that prices have staged an excellent breakout from the last many days sideways tight range and triggered a fresh buy here. Go long.

Entry	Stop	Target
Buy above 89	1 point	90.5 / 92
Or dip near 87.2	1 point	89-90

NIFTY RECOMMENDATIONS FOR THE DAY:

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STOCK FUTURES RECOMMENDATIONS FOR THE DAY:

Buy Uniphos above 164 for target of 166-167/169 stop below 162

Sell Havells below 362.5 for target of 358/354 and stop above 366.1

Stocks in action for the day: Cox & Kings, EID Parry, Delta Corp

Cox & Kings -Acquires UK-based Holidaybreak for £ 312 million in an all cash transaction. -To complete UK's Holidaybreak buy by September 27 -To fund UK's Holidaybreak via £ 125 million equity and rest via debt

Orient Paper says -Cement biz likely to get listed by April-May 2012 -Will infuse Rs 1,700 crore in cement biz

Usha Martin board to consider raising capital through rights issue

Ex Dividend: Cummins India rs 8/sh, Piramal Healthcare final dividend Rs 6/sh & Special dividend Rs 6/sh

DCB hikes base rate by 50 bps to 10.5%

ING Vysya Bank hikes base rate by 50 bps to to 10.2% effective August 1

Zydus Cadila acquires Germany's Bremer Pharma from ICICI Venture

Punj Lloyd to build process facilities for a crude oil storage cavern in Karnataka worth Rs 330 crore

Nocil Q1FY12 YoY (cr - crore, vs - versus, all in rupees) -Net Sales up 4.5% at Rs 117 Cr vs Rs 112 Cr -PAT dn 11% at Rs 8 Cr vs Rs 9 Cr -EBITDA dn 17% at Rs 10 Cr vs Rs 12 Cr -EBITDA Margin at 8.5% vs 10.7%

EID Parry Q1FY12 YoY Consolidated -Net Sales up 33% at Rs 2489 Cr vs Rs 1870 Cr -PAT at Rs 50 Cr vs Rs 7 Cr -EBITDA up 87% at Rs 248 Cr vs Rs 133 Cr -EBITDA Margin at 10% vs 7.1%

Delta Corp Q1FY12 Consolidated -Net Sales at Rs 91 Cr vs Rs 32 Cr -PAT at Rs 12 Cr vs Rs 4 Cr EBITDA MArgin at 35.2% vs 43.6% -Revenue out of Real estate biz has gone up by 20 Times and is at Rs 63 Cr vs Rs 3 Cr whereas hospitality and gaming division has gone up to Rs 28 Cr vs Rs 22 Cr

Manappuram General Finance Q1 -Net profit at Rs 107.8 cr vs Rs 46 cr -Income at Rs 493 cr vs Rs 186 cr

EIL Q1 -Net profit at Rs 148 cr vs Rs 115 cr -Income at Rs 853 cr vs Rs 606 cr

Mahindra Lifespace Q1 -Net profit at Rs 17 cr vs Rs 14 cr -Income at Rs 81 cr vs Rs 67 cr

TTK Healthcare Q1 ((Active stock)) -Net profit at Rs 4.38 cr vs Rs 3.7 cr -Net sales at Rs 92.5 cr vs Rs 78.5 cr

Alfa Laval Ltd Q1FY12 -Net Sales up 43% at Rs 275 Cr vs Rs 193 Cr -PAT up 41% at Rs 31 Cr vs Rs 22 Cr

Sunflag Iron & Steel Co Q1FY12 -Net Sales dn 6% at Rs 374 Cr vs Rs 399 Cr -PAT dn 81% at Rs 5 Cr vs Rs 26 Cr -EBITDA Margin at 7% vs 13.5%

The Paper Products Q1FY12 -Net Sales up 13% at Rs 197 Cr vs Rs 174 Cr -PAT doubled at Rs 15 Cr vs Rs 7 Cr -EBITDA Margin at 12.2% vs 8.1%

Accel Frontline Q1FY12 -Net Sales up 37% at Rs 97 Cr vs Rs 71 Cr -PAT at Rs 2 Cr vs Rs 1 Cr -EBITDA Margin at 14.43% vs 14.1%

Genus Power Infra Ltd Q1FY12 -Net Sales dn 4% at Rs 153 Cr vs Rs 160 Cr -PAT dn 15% at Rs 11 Cr vs Rs 13 Cr -EBITDA Margin at 15.69% vs 16.88%

Mukand Q1FY12 -Net Sales up 21% at Rs 669 Cr vs Rs 555 Cr -PAT dn 57% at Rs 6 Cr vs Rs 14 Cr -EBITDA Margin at 8.22% vs 11.9%

Automotive Axles Ltd Q1FY12 -Net Sales up 40% at Rs 274 Cr vs Rs 196 Cr -PAT up 24% at Rs 18 Cr vs Rs 14.5 Cr -EBITDA Margin at 12.4% vs 13.8%

Panacea Biotec Q1FY12 -Net Sales dn 13% at Rs 221 Cr vs Rs 254 Cr -PAT dn 48% at Rs 17 Cr vs Rs 33 Cr -EBITDA Margin at 21.7% vs 22.4%

Karur Vysya Bank Q1FY12 -PAT up 39% at Rs 117 Cr vs Rs 84 Cr -NII up 20% at Rs 205 Cr vs Rs 171 Cr

BGR Energy Systems Q1FY12 -Net Sales dn 19% at Rs 731 Cr vs Rs 905 Cr -PAT dn 18% at Rs 50 Cr vs Rs 61 Cr -EBITDA dn 9% at Rs 93 Cr vs Rs 102 Cr

J K Lakshmi Cements Q1FY12 -Net Sales up 21% at Rs 392 Cr vs Rs 324 Cr -PAT up 35% at Rs 23 Cr vs Rs 17 Cr -EBITDA Margin at 18.6% vs 17.6%

Muthoot Finance Q1 -Net profit at Rs 190 cr vs Rs 85 cr -Income at Rs 914 cr vs Rs 379 cr

Chennai Petro Q1 -Net loss flat at Rs 55 cr -Net sales at Rs 9,895 cr vs Rs 6328 cr

Tata Metaliks Q1 -Net loss of Rs 31.7 Cr Vs profit of Rs 10.3 Cr -Net sales at Rs 302 Cr Vs Rs 280 Cr

Hercules Hoist Q1 -Net profit at Rs 7.7 cr vs Rs 7.8 cr -Net sales at Rs 29.4 cr vs Rs 28.4 cr

Greaves Cotton Q1 -Net profit at Rs 35 cr vs Rs 36 cr -Net sales at Rs 402 cr vs Rs 378 cr

Trent Q1 -Net profit at Rs 10 cr vs Rs 8 cr -Net sales at Rs 180 cr vs Rs 162 cr

India`s fourth largest software exporter, HCL Technologies registered a growth of 49.5% in the consolidated net profit to Rs 5.11 billion for the quarter ended June 30, 2011 as compared to Rs 3.42 billion for the quarter ended June 30, 2010. On quarter on quarter basis, it posted a rise of 10.75% in the net profit. Consolidated revenues has increased from Rs 43.04 billion for the quarter ended June 30, 2010 to Rs 34.25 billion for the quarter ended June 30, 2011, representing increase of 25.6%. On quarter on quarter basis, it posted a rise of 5.5% in the revenues.

Cairn India has posted a consolidated net profit of Rs 27,265.6 million for the quarter ended June 30, 2011 as compared to Rs 2,814.1 million for the quarter ended June 30, 2010, representing rise of 9.68 times. Total income has increased from Rs 8,686.7 million for the quarter ended June 30, 2010 to Rs 37,654.6 million for the quarter ended June 30, 2011, representing increase of 4.33 times.

Oil India has posted a net profit of Rs 8,496.1 million for the quarter ended June 30, 2011 as compared to Rs 5,011.1 million for the quarter ended June 30, 2010 representing rise of 69.55%. Total income has increased from Rs 18,165.1 million for the quarter ended June 30, 2010 to Rs 26,687.2 million for the quarter ended June 30, 2011, representing increase of 56.91%.

Gail India has posted a net profit of Rs 9.85 billion for the quarter ended June 30, 2011 as compared to Rs 8.87 billion for the quarter ended June 30, 2010 representing rise of 11.05%. Total Income has increased from Rs 71.64 billion for the quarter ended June 30, 2010 to Rs 89.54 billion for the quarter ended June 30, 2011, representing increase of 25%.

Bank of Baroda (BOB) has posted a net profit of Rs 10.33 billion for the quarter ended June 30, 2011 as compared to Rs 8.59 billion for the quarter ended June 30, 2010 representing rise of 20.26%. Total income has increased from Rs 53.44 billion for the quarter ended June 30, 2010 to Rs 72.73 billion for the quarter ended June 30, 2011, representing increase of 36.10%.

Canara Bank has posted a net profit of Rs 7.26 billion for the quarter ended June 30, 2011 as compared to Rs 10.13 billion for the quarter ended June 30, 2010, representing decrease of 28.33%. Total income has increased from Rs 58.95 billion for the quarter ended June 30, 2010 to Rs 77.06 billion for the quarter ended June 30, 2011, representing increase of 30.72%.

Uco Bank has posted a net profit of Rs 2.93 billion for the quarter ended June 30, 2011 as compared to Rs 2.60 billion for the quarter ended June 30, 2010 representing rise of 12.69%. Total income has increased from Rs 28.63 billion for the quarter ended June 30, 2010 to Rs 36.77 billion for the quarter ended June 30, 2011, representing increase of 28.43%.

Infrastructure Development Finance Company (IDFC) has posted a consolidated net profit of Rs 3,136.96 million for the quarter ended June 30, 2011 as compared to Rs 3,351.11 million for the quarter ended June 30, 2010, representing decrease of 6.39%.Total income has increased from Rs 10,972.32 million for the quarter ended June 30, 2010 to Rs 13,579.81 million for the quarter ended June 30, 2011, representing increase of 23.76%.

GIC Housing Finance

has posted a net profit of Rs 175.6 million for the quarter ended June 30, 2011 as compared to Rs 193.5 million for the quarter ended June 30, 2010 representing decrease of 9.25%. Total income has increased from Rs 780.2 million for the quarter ended June 30, 2010 to Rs 1025.6 million for the quarter ended June 30, 2011, representing increase of 21.45%.

Dabur India has posted on the consolidated basis a net profit of Rs 1.28 billion for the quarter ended June 30, 2011 as compared to Rs 1.07 billion for the quarter ended June 30, 2010 representing rise of 19.63%. Total Income has increased from Rs 9.31 billion for the quarter ended June 30, 2010 to Rs 12.28 billion for the quarter ended June 30, 2011, representing increase of 31.90%.

Marico has posted on the consolidated basis a net profit of Rs 850.02 million for the quarter ended June 30, 2011 as compared to Rs 737.35 million for the quarter ended June 30, 2010 representing rise of 15.28%. Total income has increased from Rs 7,917.32 million for the quarter ended June 30, 2010 to Rs 10,575.88 million for the quarter ended June 30, 2011, representing increase of 31.90%.

Pharma major Lupin has posted on the consolidated basis a net profit of Rs 2.10 billion for the quarter ended June 30, 2011 as compared to Rs 1.96 billion for the quarter ended June 30, 2010 representing rise of 7.14%. Total income has increased from Rs 13.35 billion for the quarter ended June 30, 2010 to Rs 15.69 billion for the quarter ended June 30, 2011, representing increase of 17.53%.

Strides Arcolab has posted a consolidated net profit of Rs 700 million for the quarter ended June 30, 2011 as compared to Rs 500 million for the quarter ended June 30, 2010, representing increase of 40%. Total income has increased from Rs 4.84 billion for the quarter ended June 30, 2010 to Rs 6.18 billion for the quarter ended June 30, 2011, representing increase of 27.69%.

UltraTech Cement has posted a net profit of Rs 6.83 billion for the quarter ended June 30, 2011 as compared to Rs 5.58 billion for the quarter ended June 30, 2010. Net sales has increased from Rs 39.90 billion for the quarter ended June 30, 2010 to Rs 43.65 billion for the quarter ended June 30, 2011.