DAILY REPORT FOR 15 MAY, 2008
NIFTY (5011 +54 pts)
Supp 4975/4930/4875 Res 5080/5115/5165
SENSEX (16978 +225 pts)
Supp 16860/16770/16540 Res 17120/17230/17400
Outlook for 15 May, 2008:-
· There seems to be a lot of confusion about the trend of the market and it is giving many opportunities intraday while market is not really moving. Even after big rally yesterday, FIIs remained small buyers in all segments i.e. Cash, Stock Futures and Index Futures. They have not bought much in last 2-3 sessions but they have not sold much too. This indicates the indecision and until any trend is visible, trading opportunities will be plenty.
· But as we have held support levels around 4915 well, the bounce can lead us to 5080 and 5115 at least. 4975-4962 should be considered as a good support for today. Caution is advised below 4962.
· Bata (171):- Buy with SL of 161 for Tgt 190-192
· HDIL (740):- The stock is near trendline support. Buy for target of 860-870 in short-term. Keep SL of 700. It is an ideal buy around 725-730.
Externalities of our market: -
Dollar appreciation is helping Tech, Pharma and Textile stocks and as a result Sensex was up more than 200 points yesterday in spite of a 6% fall in a heavyweight like ONGC. Signs of early monsoon are helping the bulls more as shorts may be trapped at such a moment. Concerns are in the form of rising deficits because of Oil prices and expected slowdown in Indian economy. Statistics say that a $1/barrel rise in crude price increases our Current account deficit by $700mn. Oil prices in our country are not moving with the global prices. One year back, crude was around $60 and we were having almost the same price of petrol and diesel as we have today even when crude has touched $125. The government is pampering the people by having an inelastic approach to pricing of oil in India. If prices were allowed to be raised, a person spending Rs 1000 on Petrol a month would have to shell out nearly Rs 1500 now and that would pinch him. Many people would start saving natural resources and use other means to travel like walking, bicycle. China is an example where people are already aware of the scarcity of petro-products and so many people are already using bicycles there. And now this is a stage where government just can’t act on price-rise as election is near, inflation is already high. Subsidizing oil has led to more demand which is like a boomerang for the government.
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.