TANMAY OBSERVES!

Weekly Nifty Update 06 Feb, 2010 by Tanmay G Purohit

Nifty has closed down by 2.5% this week after the bounce towards 4950 was limited only to 4950 and we could not cross the resistance as follow-up buying was absent. Nifty trades below its important moving averages but 200DEMA is at 4654 which still may give short-term support, below 200DEMA, if Nifty sustains for 2-3 sessions, more panic selling is not ruled out in which case even 4300 can be a possibility. 

There are many stocks who come as good opportunities for investors and bull market or bear market they do perform, case in point would be a stock like IGL which was recommended long back around Rs 165 and now even after this correction the stock has hit new all time high at Rs 249 on Saturday special session. GMR INFRA, EKC are stocks where worst is getting over and one can accumulate these stocks. RELIANCE looking to buy Oil Sand company in Canada is very positive development in my view and this correction one can slowly buy RELIANCE IND for long term. TELECOM stocks have remained stable even in this fall and BHARTI AIRTEL/IDEA/RCOM would do well once there is stability on index, TATACOMM has been recommended before but it has only become more attractive after that.

Union Budget to be announced on 26 Feb and Railway Budget on 24 Feb would drive some stocks volatile - FERTILIZER stocks can be watched for action as some subsidy-related announcement may happen given tight finance position for Government - DEEPAK FERT, CHAMBAL look very good. Kirit Parikh Commeetee Report was submitted last week and the panel recommended raising of Fuel prices which has not been followed yet by the Government but soon a decision is expected to that effect. Any rise in price can benefit RIL/ESSAR OIL as they can start their retail outlets soon and already ESSAR OIL has announced they are going to double their petrol pumps in next few months. GAIL has been excluded from subsidy burden as per a recommendation in report and the stock would be a huge beneficiary if the advice is followed. 

Nifty so far has taken support at 4693 which was crucial resistance before and as long as we don't see closing below this level a small pullback towards 4900 is always possible but this market is becoming an investor's market and long-term investment would only pay rich rewards. Any rally has to be backed by good volumes which have been lacking so far and short-term traders may find the going very difficult on long side for now. 

Supp 4690/4535/4478 Res 4833/4950/5030