Monday, June 02, 2008


NIFTY (1540 +35 pts)

Supp 4830/4800/4750 Res 4910/4940/4985

SENSEX (16415 +99 pts)

Supp 16300/16210/15950 Res 16560/16670/16735

Review of the previous session:-

  • After hitting 4910 in early trade, Nifty remained in a narrow range between 4880-4850 for the whole day. Pharma, IT and Capital goods were major gainers. Fall was arrested as the Centre revised upwards its estimate of growth in GDP for 2007-08 to 9% from 8.7% earlier.

  • BSE Breadth 1008 Adv-1701 Dec NSE Breadth 419 Adv-777 Dec Upper Circuit - 118 Lower Circuit – 163

  • BSE Vol Rs 5514 Cr NSE Vol Rs 14953 Cr F&O NSE Vol Rs 35883 Cr

  • FIIs bought Rs 106 Cr in cash market and MFs bought 729 Cr. In F&O, FIIs bought Index Futures worth Rs 31 Cr and sold Stock Futures worth Rs 364 Cr. Their Outstanding position in Futures is 37453 Cr and Options is 15474 Cr.

  • Additional Data:- Gold $891.50/oz Nymex Crude $127.35/bbl 1$ = Rs 42.16

F&O observations:-

  • Bullish build-up – AIA, Dr Reddy, Ranbaxy, TCS, Praj, Infosys, Ster, Guj Alk, Sesa, HDFC Bank, IVRCL Infra, LT, Mcdowell, Jindal Steel

  • Bearish build-up – JP Asso, OBC, Rolta, RelCap, RIL, Unitech

  • Indian Volatility Index 26.68 (-4.99%)

  • OI 62326 Cr (+3816 Cr) Nifty OI up 2% PCR 1.86 (from 2.08)

Outlook for 2 June, 2008:-

  • Sensex is expected to remain in the range of 16650-16200. Break of 16200 should give way to more correction. Until that happens, stock-specific movement will continue.

  • Nifty faces stiff resistance around 4980 to 5030 levels and any bounce may face selling pressure from these levels. Short-covering in banks is not ruled out.

  • Reliance Industries is a weak stock and it may fall more. So one should avoid bottom-fishing in it for time being.

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

Orchid Chem (241):- Go short around 246-250 SL 262 and target 224

Catch them falling (Ideas for Investment):-

TNPL (101):- Tamil Nadu Newsprint and Papers Ltd is the world’s largest bagasse-based paper mill with 180,000 tonnes capacity. The company also plans to foray into Cement production and set up IT Park with their surplus land. As the company is using captive wind power, it is eligible for Carbon Credits also. It’s a regular dividend paying company and the dividend yield comes out around 4% at CMP. One should accumulate the stock for 20-30% returns in 12-16 month period.

Results Today (2 June):- Motherson, McLeod Russ, Educomp, Adhunik Met, PVR

India to Consider Ban on Iron Ore Exports, Press Trust Reports

Sesa Goa is India’s largest iron ore exporter and that stock may see some selling pressure on the back of this news.

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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