Thursday, May 29, 2008


NIFTY (4918 +59 pts)

Supp 4885/4850/4800 Res 4935/4975/5010

SENSEX (16525 +249 pts)

Supp 16420/16320/16200 Res 16630/16740/16850

Review of the previous session:-

  • After remaining sideways for most of the day, recovery came in late trade. Techs, Metals and FMCG were major gainers. Banks rallied on short covering. Capital Goods were under pressure as BHEL was one of the top losers. Private oil companies like Essar Oil and CAIRN declined as Left demanded to impose windfall taxes on them.

  • BSE Breadth 1312 Adv-1358 Dec NSE Breadth 624 Adv-570 Dec Upper Circuit - 137 Lower Circuit – 138

  • BSE Vol Rs 5431 Cr NSE Vol Rs 13387 Cr F&O NSE Vol Rs 56333 Cr

  • FIIs sold Rs 883 Cr in cash market and MFs bought 527 Cr. In F&O, FIIs bought Index Futures worth Rs 522 Cr and bought Stock Futures worth Rs 234 Cr. Their Outstanding position in Futures is 47957 Cr and Options is 22949 Cr.

  • Additional Data:- Gold $905/oz Nymex Crude $131.03/bbl 1$ = Rs 42.75

F&O observations:-

  • Bullish build-up – Chambal, Tata Comm, Sasken, Bharti, Mphasis, Nagarfert, CESC, ITC, Reliance, Infosys, Ambuja Cem, TCS, DLF, Hindalco

  • Bearish build-up – M&M, Aban, BHEL, Crompton, Sun TV, ONGC, LT, Suzlon, CAIRN, Essar Oil

  • Indian Volatility Index 32.63 (+14.13%)

  • OI 89525 Cr (+4024 Cr) Nifty OI up 5% PCR 1.29 (previous 1.25)

  • Banks (Axis, Kotak and SBI) and Sugar (Bajaj Hind, Renuka, Balrampur) rallied the most but big of the part it was due to short covering in F&O. Capital Goods stocks such as BHEL, LT and Crompton Greaves saw fresh shorting. More covering is expected in banks today, particularly in ICICI Bank. Today being the last day of derivatives expiry for the month of May, roller-coaster ride can be possible in late trade.

Outlook for 29 May, 2008:-

  • Markets are expected to open flat to positive. But selling from higher levels around 4980-5000 is not ruled out in later part of the session. One should be light on positions and cut leveraged long positions in this rally as we are not out of the woods yet. Alok Textiles, KPIT and NIIT Tech look defensive buys, naturally one is advised to buy only in cash.

  • GDP numbers for first quarter of this year are expected to come out on 31st May and those will be watched pretty closely. That, coupled with Advance Tax figures and IIP data in Mid-June may decide further course for the market. First quarter results hold the key going forward. On the other hand, we are facing political uncertainty about Oil pricing. Leftists are demanding to tax private oil companies as those companies are earning abnormally high profits in the party’s view. Such a measure looks illogical and if really implemented, stocks like Reliance Ind, CAIRN and Essar Oil may suffer.

Results Today (29 May):- GMR Ind, GTN Text, Larsen, National Fert, Patspin, Pricol, LITL, NTPC, HPCL, Ipca, TNPL, Orchid, Cinemax, Radico Khaitan, Hyderabad Ind, Adlabs, Aegis, Power Grid

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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