Sunday, September 26, 2010

Weekly Nifty Update 25 Sept, 2010 by Tanmay G Purohit

Nifty has closed the week higher for 4th consecutive week by 133 points at 6018 and this is first time after 11 Jan 2008 that Nifty has closed the week above 6000. Longest stretch of weekly up closings this year was Feb'10 through Apr'10 where 9 consecutive weeks Nifty inched up when it rose 15% but current rally is very sharp as in these 4 weeks only nearly 13% rise has been witnessed. Gains this week were clearly led by FMCG stocks as BSE FMCG index rose more than 5% in last 5 sessions. HIND UNILVR was top gainer in Nifty with 11% gains followed by HDFC, RANBAXY, HERO HONDA, MARUTI, IDFC, ITC and WIPRO which rose more than 6% each. FINANTECH lost 13% this week as SEBI denied permission for MCX-SX, in Nifty CAIRN was top loser with 3.8% loss.
Foreign institutional investors (FIIs) have poured in over $2.67 billion in September alone, fuelling the rise of Indian stock markets. Till Sep 17, FIIs had invested over $2.64 in the markets and picked up $39.67 million worth of new securities, according to data available with the Securities and Exchange Board of India (SEBI). Rupee is becoming stronger due to high FIIs inflow and strong Rupee benefits Importers and Oil Companies HPCL, BPCL, IOC, MRPL, ESSAROIL benefit, any fall in global crude prices would add to benefits of these companies.
Ratings agency Crisil said it will buy US-based knowledge process outsourcing firm Pipal Research Corporation for $12.75 million and at present, FSL holds the majority stake in Pipal which will boost valuations of FSL forward and stock can target Rs 32-33 in short-term. On index basis, SBI and FMCG stocks look very strong to add to gains but RELIANCE and INFOSYS hold the key for short-term trend as these stocks can pressurize if they correct.
Technical View:
Nifty 6357 is all time high and that would be only important resistance to be crossed now. Euphoria is slowly building up in markets but so far only FIIs have been providing big liquidity with MFs remaining sustained sellers. Nifty as long as maintains 5900 correction would be hard to come in this settlement and if rally continues above 6000 we may get very close to all time highs very soon. Whenever Index cuts low of previous 5 days then correction may start in a big way now 5880 below only will trigger correction. As market rise is steep correction can be steeper so book regular profits and be stock-specific as gains in individual stocks are high.
Support-5950/5880/5790 Resistance-6060/6180/6300
Stocks looking good: FSL, ONMOBILE, INDIA CEM, NHPC, NTPC
Stocks looking weak: STER, BGR ENERGY

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