Friday, June 06, 2008


NIFTY (4676 +91 pts)

Supp 4640/4610/4585 Res 4710/4740/4805

SENSEX (15769 +254 pts)

Supp 15620/16500/15420 Res 16000/16190/16350

Sensex held the support at 15300 yesterday and it has tested it for the third time now. The pullback is going to continue but it may be short-lived.

Review of the previous session:-

  • It was a volatile session initially but as we tested 15300 in mid-session, buying was witnessed at once. Sensex could wipe out 250 points from 440 point loss of Wednesday, thanks to Tech and Power stocks.

  • BSE Breadth 1240 Adv-1397 Dec NSE Breadth 600 Adv-591 Dec Upper Circuit - 109 Lower Circuit – 165

  • BSE Vol Rs 6172 Cr NSE Vol Rs 16002 Cr F&O NSE Vol Rs 51017 Cr

  • FIIs sold Rs 1418 Cr in cash market and MFs bought 570 Cr. In F&O, FIIs bought Index Futures worth Rs 1035 Cr and sold Stock Futures worth Rs 402 Cr. Their Outstanding position in Futures is 38599 Cr and Options is 18642 Cr.

  • Additional Data:- Gold $875.50/oz Nymex Crude $127.79/bbl 1$ = Rs 42.99

F&O observations:-

  • Bullish build-up – NIIT Tech, RelCap, ONGC, NIIT, Chambal, Ranbaxy

  • Bearish build-up – Renuka, BPCL, BankIndia, Educomp, DLF, Aptech, Reliance, BHEL, RPower, LT,

  • Indian Volatility Index 30.32 (+1.68%)

  • OI 68940 Cr (+2547 Cr) Nifty OI down 3% PCR 1.64 (from 1.59)

  • A lot of short covering happened in Nifty looking at OI and other parameters. Reliance added a lot of short positions and the stock is really weighing down on the indices. If it hadn’t been for ONGC, we would not have got such a great intraday pullback. The bounce can take us towards 4740 and 4800. The SL can be 4590 for the same.

Outlook for 6 June, 2008:-

  • Markets to open gap-up on the back of big rally from US markets. Early rally can take us towards 16000 on the Sensex.

  • RBI governor has hinted about CRR hike yesterday, so banks may see selling pressure from higher levels.

  • We have made a triple bottom on the Sensex at 15300 and therefore any closing below 15300 now will be very negative. Until that one should play on the long side more than short side. But it is advisable not to take leveraged positions home going into the weekend.

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

Mahindra Life (607):- The stock can target 665-670 levels. Buy with SL 565.

Alok Industries (59.80):- 58 is where Alok is taking support and one should buy with that SL for target of 66-68.

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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