Thursday, July 31, 2008


NIFTY (4332 +19 pts)

Supp 4275/4225/4160 Res 4360/4395/4460

SENSEX (14355 +68 pts)

Supp 14220/14080/13950 Res 14480/14610/14830

Sensex faces stiff resistance around 14600 and failing to cross it can give some correction which can take us towards 12300-12600 once again. The nice part can be we don’t correct and consolidate here for some days. All bad news like inflation, subprime, crude prices, interest rate hikes look priced in for now and so declines should be used to accumulate good stocks. The downside can be 2000 points from here which can translate into 15-20% down moves in individual stocks also. So one needs to take these things into account and be ready to average. It is a calculated risk which should reward us in the end. GT Offshore, Bata, TCS, Crompton Greaves, Rolta, Cummins, Tata Motors can be looked at for accumulation.

Review of the previous session:-

  • Markets opened firm but could not post big gains. Indices were range-bound the whole day. Volumes were expectedly higher owing to F&O expiry. Inflation for the week ended 19 July was 11.98% against 11.89% a week ago.

  • BSE Breadth 1296 Adv-1326 Dec NSE Breadth 559 Adv-651 Dec Upper Circuit -194 Lower Circuit –104

  • BSE Vol Rs 5091 Cr NSE Vol Rs 15386 Cr F&O NSE Vol Rs 64640 Cr

  • FIIs bought Rs 494 Cr in cash market and MFs bought 320 Cr. In F&O, FIIs bought Index Futures worth Rs 504 Cr and bought Stock Futures worth Rs 257 Cr. Their Outstanding position in Futures is 28825 Cr and Options is 15248 Cr.

  • Additional Data:- Gold $928.00/oz Nymex Crude $124.25/bbl

Outlook for 1 August, 2008:-

  • Inflation rose a little bit but FIIs and Domestic institutions show a buying trend. Next 2 sessions look important for further action. If we are unable to cross 14600 in this period, we may see correction in days to come.

  • Nifty has intraday support at 4275 and below that some correction towards 4225 is not ruled out. Caution is advised below 4225. If we stay above 4275 levels after first half, we can see 4360-4390 also being reached in late trade.

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

Cummins (283):- Buy for target of 320-330. Keep SL of 269

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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