Thursday, October 18, 2007


: - Open 5658 High 5658 Low 5107 Close 5559 (-109 points)

P/E 25.20 P/B 5.78 Adv 11 Dec 39

Supp 5440/5350/5290 Res 5665/5710/5780

SENSEX: - Open 18037 High 18841 Low 17307 Close 18715 (-336 pts)

Supp 18500/18260/18140 Res 18850/19050/19200

Lower circuit and then recovery:-

· SEBI recommendations created a negative sentiment and as markets opened, indices hit the lower circuit of 10%. But markets recovered smartly when they re-opened and we could close 336 pts down on the Sensex.

· Volumes were quite high - Rs 24061 Cr in spot market and F&O Vol at Rs 98395 Cr.

· Breadth was negative – BSE Adv 1102 Dec 1883 Unch 64 NSE Adv 240 Dec 853 Unch 27

· FIIs sold big Rs 2012 Cr and Domestic Inst Inv turned buyers to the tune of Rs 285 Cr after many days. This indicates that FIIs must have lightened some positions whereas Mutual Funds may have given support to the market. Foreign investors sold Rs 3845 Cr Index Fut. But they bought into index options worth Rs 455 Cr. They were net sellers in Stock Fut Rs 839 Cr.

· Tech stocks moved up bucking the overall downtrend. TCS, HCL Tech and Satyam were amongst top gainers. Bank stocks lost the most. Bank of India, Allahabad Bank, Kotak Bank and SBI were major losers.

Top Gainers: - Siemens, TCS, ABB, HCL Tech, Satyam Comp

Top Losers: - Tata Power, Rel Energy, ACC, SBI, BHEL

Indian ADRs: -

Outlook for Thursday:-

· NSE Derivatives total open interest is very high at Rs 101563 Cr though it was down 4% yesterday. Many stocks lost OI yesterday as many market players must have cut positions as a result of market volatility.

· Although we recovered 1500 points intraday yesterday, breadth did remain negative. This is a cause of concern and one needs to be very stock-specific from hereon. Reliance group stocks are still quite heavy and some caution is advised while trading those stocks. Tech stocks are defensive bets at this point of time and one should add them whenever some panic happens in them.

· Next day or two are crucial as a lot of volatility is expected with such a high OI position. Nifty has good resistance at 5665 to 5710 which if not crossed in next 2-3 days, correction can set in and we will see lower levels once again. Above that we will see short-covering taking us higher towards 5830 levels. For today’s trading, support can come in at 5440 and 5290. It is better to avoid hasty buying in hot stocks.

· TCS (1095):- Buy around 1070-1080 for target 1140-1150

(Keep SL in short-term trades)

Results today – ACC, Biocon, Garware Off, GMR Infra, Great Off, Hero Honda, Hexaware, Kir Oil Eng, Mah Scooter, Megasoft, Merck, Motilal Oswal Fin, Omaxe, Orchid Chem, Petronet LNG, Ranbaxy, Reliance, SKF India, Tanla, Trent, Unichem Labs

Dr Reddy's scouts for partner to enter Japanese market

Disclaimer: These recommendations are based on the theory of technical analysis and personal observations. This does not claim for profit. I am not responsible for any losses made by traders. It is only the outlook of the market with reference to its previous performance. You are advised to take your position with your sense and judgment. I am trying to consider the fundamental validity of stocks as far as possible, but demand and supply affects it with vision variations.

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