Weekly Market Update 16 Oct, 2010 by Tanmay G Purohit

Nifty has closed in the negative by 40 points at 6063 for 2^nd week running and Nifty has fallen by more than 200 points in the last 2 sessions. SESA GOA rose nearly 7% this week becoming top gainer in Nifty, followed by TATA MOTORS, STERLITE, WIPRO which rose more than 2% each. Losers outnumbered gainers this week – OIL & GAS stocks were major losers as Crude rose past $83 – BPCL -7% and HPCL, OIL, IOC along with BHARTI AIRTEL, NTPC, AXIS BANK fell more than 4% each this week. 

IIP Data for August was below expectations as IIP dropped to 15-month low at 5.6% against Reuters estimates around 9.65%. The volatility will make it more difficult for policymakers, especially the Reserve Bank of India (RBI), to assess economic conditions as they battle inflationary pressures. Infosys reported 13.15% jump in its consolidated net profit for the second quarter ending September 30, 2010 to Rs 1,737 crore, as against Q2 of the last fiscal and results were above expectations but guidance was very conservative giving way to profit-taking in IT sector on Friday.

Weekly Technical View:

Nifty has closed in negative for 2^nd consecutive week and retraced from near 6300 levels, correction is healthy for the ongoing trend as one-side rally can have similar fall also. Nifty has hit 10-day low and trend would remain weak if 6200 levels are not crossed again. Nifty holding 6000 levels can give pullback towards 6200 but breaking below 5930 would be a cause of worry for short-term traders.

Support 6030/5930/5825 Resistance 6140/6210/6315

Sensex has closed the week lower by 125 points at 20125 and 17-day low at 19771 would be an important support to hold. Sensex is very close to previous all time high near 21206 and more profit-taking is not ruled out as long as it doesn’t comfortably close above 21000.

Support 20000/19780/19400 Resistance 20380/20720/21000

 

Technical Call: ESSAR OIL (Rs 139):- The stock has broken out on weekly graph and as long as Rs 132 levels are held higher levels can be possible. Stock trades above short and long term moving averages and crossover of Rs 147 can give fast up move in the stock. Rs 150-152 can be upside while Rs 132 can be stop loss.