Friday, June 13, 2008


NIFTY (4539 +16 pts)

Supp 4485/4440/4390 Res 4610/4670/4700

SENSEX (15250 +64 pts)

Supp 15190/15070/14900 Res 15460/15530/15700

Review of the previous session:-

  • Markets opened gap-down but it was a remarkable comeback in spite of weak global sentiment. Reason was IIP data.

  • Industrial output growth rose above expectations to 7% in April from 3.9% in March. Though it was a decline year on year, main highlight was Capital Goods growth which surged to 14.2% against 10.9% last year.

  • BSE Breadth 1481 Adv-1109 Dec NSE Breadth 681 Adv-513 Dec Upper Circuit - 201 Lower Circuit – 109

  • BSE Vol Rs 6233 Cr NSE Vol Rs 13612 Cr F&O NSE Vol Rs 52333 Cr

  • FIIs sold Rs 1211 Cr in cash market and MFs bought 500 Cr. In F&O, FIIs bought Index Futures worth Rs 322 Cr and bought Stock Futures worth Rs 390 Cr. Their Outstanding position in Futures is 40967 Cr and Options is 21363 Cr.

  • Additional Data:- Gold $865/oz Nymex Crude $133.50/bbl

F&O observations:-

  • Bullish build-up – Pantaloon, RNRL, Renuka, Praj, RPL, Chambal, IndiaInfo, DCB, Bharti Airtel, Reliance

  • Bearish build-up – Suzlon, DLF, Karnataka Bank, Kotak Bank, NTPC, Crompton

  • OI 79782 Cr (+2929 Cr) Nifty OI up 1% PCR 1.61 (from 1.63)

  • Main thing was that many scrips saw long build-up yesterday whereas it was just looking like short-covering in previous small bounces. That indicates many shorts are yet to cover and this can keep the bounce running for some more time.

Outlook for 13 June, 2008:-

  • Indices to open flat to positive. In this bounce, Nifty can bounce towards 4650-4690. But one should be cautious at higher levels as supply from around 4700 is not ruled out. Bear market rallies are swift and many times supply is so great that upside targets are not reached fully.

  • Nifty range for the day can be 4610 to 4480. Below 4480, one should have a cautious approach for the day. Inflation data will be on the watch.

  • Technically speaking, there is a need for more confirmation for bottoming out. So still it is not an outright bullish call on the markets. It is advisable to be light on positions going into the weekend. Advance Tax figures are expected any time next week. Sometimes it is wiser to buy a bit late than to buy right at the bottom.

Ideas for Trading (for short-term position):-

ITC (199.95):- The stock should retrace towards 212-215 levels. Buy with SL 194 on closing basis.

Catch them falling (Ideas for Investment):-

NIIT Tech (138):- It is global IT solution provider with presence in Europe, North America and Asia Pacific. It caters to mainly BFSI, Travel and Transport, Retail and Mfg sectors. The company is slowly strengthening its position in its current business organically as well as through acquisitions. NIIT Tech is one the most undervalued stocks in Indian Mid-cap IT space, trading around 6.5 times P/E ratio. The company benefits from dollar appreciation. It derives around 50% of revenues from Europe. One can buy around current levels and add in dips for investment purpose to earn 20-25% returns.

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.

No comments: