Weekly Nifty Update 20 March, 2010 by Tanmay G Purohit
Nifty has closed positive (+125 points) at 5262 positive close 6th week in a row and Nifty has broken out above 5150 this week which has given a strong closing for the index. Nifty January high at 5310 is the highest point in last 24 months and once above that rally would strengthen more but failing to crossover would be a sign of caution for longs. Weekly graph shows a channel formation and above 5320 a move towards 5400-5425 is not ruled out. Nifty has to maintain 5170-5200 levels to remain strong this week and below 5100 major weakness is expected. This is expiry week as March-2010 contracts would get squared off Thursday and if Nifty touches around 5400 this week a reaction from there looks probable so caution is advised at higher levels.
Stock Performance: - It was a week of TELECOM stocks where IDEA rose 14%, RCOM 6.6% and BHARTI AIRTEL 4.2%. RELIANCE IND, the biggest heavyweight contributed to the fullest as it rose nearly 7% this week and nears important resistance at Rs 1100 above which the stock may become stronger for higher levels. METALS followed TELECOM as TATA STEEL, SAIL and HINDALCO gained more than 5% each.
Advance Tax Numbers: - Q4 Advance Tax numbers were released this week and it indicated higher taxes from many companies, BANKING companies lagged in those numbers but SBI was top tax-payer overall; RELIANCE, TCS, MRPL and INFOSYS showed good numbers.
RBI Rate Hike: - WPI touched 9.89% in Feb and Food Inflation at 16.3% has made RBI surprise markets with sudden repo and reverse repo rate hike on Friday evening by 25bps. Many expected the rise to happen in April annual policy meeting but this can have a negative reaction for banking stocks and REALTY, AUTO can also be impacted. Market is not ready to move higher for the last 3 sessions and if it continues the fall may materialize once again and this time the correction can be bigger also. Stock-specific approach is only advisable. Around 1,800 companies on the Bombay Stock Exchange (BSE) are trading at or near their 52-week highs but large caps are failing to perform so caution is warranted at current levels.
Stocks Looking Good: JUBILANT, AREVA, BIOCON
Weak stocks: KOTAK BANK, ACC, LIC HSG, M&M, MARUTI,
Supp 5205/5110/5030 Res 5320/5425/5500
Around 1,800 companies at or near 52-week highs http://tinyurl.com/yl22doc
BRIC rally slows amid highest valuations http://tinyurl.com/ygsjcn8
RBI raises repo, reverse repo http://tinyurl.com/ylqnpxb