Tuesday, May 27, 2008


NIFTY (4875 -71 pts)

Supp 4820/4780/4710 Res 4900/4950/4990

SENSEX (16348 -301 pts)

Supp 16300/16210/15950 Res 16410/16500/16650

We have tested support at 16300 yesterday but Sensex closing below 16500 is negative from technical point of view and if we can not cross 16650 in next 2 sessions, the downtrend may accentuate and we may target 15600 levels in days to come.

Review of the previous session:-

  • Indices opened with big gap-down but after that only sideways movement was seen. It was like distribution the whole day but no major intraday downtrend was witnessed. Banking, Capital Goods and Metals were major losers. Tech stocks saw some buying interest. Breadth was very negative but volumes were quite poor.

  • BSE Breadth 667 Adv-2043 Dec NSE Breadth 164 Adv-1053 Dec Upper Circuit - 125 Lower Circuit – 202

  • BSE Vol Rs 4426 Cr NSE Vol Rs 11432 Cr F&O NSE Vol Rs 44103 Cr

  • FIIs sold Rs 1337 Cr in cash market and MFs bought 842 Cr. In F&O, FIIs sold Index Futures worth Rs 361 Cr and sold Stock Futures worth Rs 387 Cr. Their Outstanding position in Futures is 46521 Cr and Options is 22284 Cr.

  • Additional Data:- 1$ = Rs 42.7250

F&O observations:-

  • Bullish build-up – Crompton Greaves, Glaxo

  • Bearish build-up – Bajaj Hind, Renuka, Federal Bank, Ambuja Cem, Chambal, GE Ship, AbirlaNuvo, ITC, Maruti

  • Indian Volatility Index 33.01 (-3%)

  • OI 83646 Cr (+1720 Cr) Nifty OI up 9% PCR 1.27 (previous 1.31)

  • Sugar stocks saw a lot of short build-up. More calls and less puts addition moderated the PCR to 1.27. Nifty added more shorts as FIIs must have gone short on Index Futures for hedging the position. A pull-back rally towards 4980 is not ruled out.

Outlook for 27 May, 2008:-

  • Markets to open positive. There are no cues from Dow Jones today as they were shut yesterday. Asian markets have opened firm. Nifty can give a small bounce towards 4950/4980 levels but one should try to exit longs in this rally as it may be short-lived. Volatility will remain as F&O expiry rollover is taking shape.

  • IDEA (110) is consolidating nicely and it is showing bullish formations in spite of overall bearish markets. The stock may be a defensive play for an investor as it is expected to rise quickly when market gives pullbacks. The stock has been a slow-mover and one can buy it for 10-15% returns. Short-term players can keep a SL around 103.

  • Many stocks gapped down yesterday and we should wait for some kind of stability. Bottom-fishing should be avoided as only a few stocks like Suzlon, IDEA and Crompton Greaves are showing some buying.

Why is there no other option than to increase petroleum product prices in India? http://www.thehindubusinessline.com/2008/05/27/stories/2008052750430900.htm

Results Today (27 May):- Gwalior Chem, Opto Circ, Sundaram Fin, Tata Coffee, VLS Fin


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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