Thursday, June 05, 2008


NIFTY (4585 -130 pts)

Supp 4540/4500/4470 Res 4630/4690/4730

We have closed below 4625 support and January low of 4448 looks to get broken now. A bounce from around current levels is not ruled out but still one should not dedicate much for longs.

SENSEX (15514 -447 pts)

Supp 15300/15130/14800 Res 15650/15780/15890

Review of the previous session:-

  • Markets were flattish in the first half but got sold off quickly as fuel price hike was announced. Though the hike was expected, the spiraling effect of it on inflation gave way to big selling from FIIs. All the sectoral indices were in the red on the BSE. 49 out of 50 Nifty stocks ended negative.

  • BSE Breadth 676 Adv-1967 Dec NSE Breadth 198 Adv-1013 Dec Upper Circuit - 94 Lower Circuit – 226

  • BSE Vol Rs 6461 Cr NSE Vol Rs 14186 Cr F&O NSE Vol Rs 48378 Cr

  • FIIs sold Rs 1198 Cr in cash market and MFs bought 419 Cr. In F&O, FIIs bought Index Futures worth Rs 82 Cr and bought Stock Futures worth Rs 225 Cr. Their Outstanding position in Futures is 37573 Cr and Options is 17377 Cr.

  • Additional Data:- Gold $883.80/oz Nymex Crude $122.30/bbl 1$ = Rs 42.78

F&O observations:-

  • Bullish build-up – ONGC

  • Bearish build-up – LITL, Bombay Dyeing, Sesa, BPCL, RPower, CAIRN, BHEL, Tata Tea, Reliance, IDFC, IVRCL Infra, Hero Honda, Hind Petro

  • Indian Volatility Index 29.82 (+4.67%)

  • OI 66392 Cr (+342 Cr) Nifty OI up 3% PCR 1.59 (from 1.67)

Outlook for 5 June, 2008:-

  • 15300 is next good support for the Sensex and it may get tested in early fall today. But it is not advisable to average losses as correction may continue once some bounce or consolidation has taken place.

  • It is very difficult to trade in a bear market and what we are witnessing is no less than it. Going long doesn’t earn much and going short needs help of F&O many times. So it is a bad situation for market players who are not used to shorting. Especially investors suffer in this phase as their portfolios show negative returns and averaging also doesn’t make sense. Everybody can not get out at rallies and get in quickly when stocks fall. But if good times are over, bad times will also be over some day. These times may not be good for earning but when the tide turns bullish; returns will be fast and big. So waiting is the best thing that one can do at this point in time. The analyst may be right or wrong in his reading of the market, but more important is to protect the capital. There is proverb in Hindi “Bachenge to aur bhi ladenge” and “Sir salaamat to pagadi pachaas” both of which mean, save yourself to fight more.

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

No picks

Catch them falling (Ideas for Investment):-

No picks

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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