Sunday, October 03, 2010

Weekly Update 02 Oct, 2010 by Tanmay G Purohit

Nifty has closed the 5th consecutive week higher with 125 point gain at 6143. CAP GOODS, METAL stocks were major gainers this week. SAIL rose 8.5% followed by HINDALCO, TATA STEEL, JINDAL STEEL which rose more than 5% each. BAJAJ AUTO rose nearly 7% this week as the stock came into Nifty-50 stocks. CAP GOODS gainers were SIEMENS and BHEL. OIL & GAS stocks retreated on profit-taking – BPCL -4.2%, ONGC -2.2%.
India's manufacturing sector continued to expand although at a considerably slower pace than in preceding months, predominantly weighed down by a fall in new orders and output. The HSBC Markit Purchasing Managers' Index, based on a survey of 500 companies, slid to 55.1 in September, which marks the lowest reading since November last year, from 57.2 in the August survey. Food inflation rose for the fifth straight week, climbing by almost 1 percentage point to 16.44% in the week ended September 18 on account of supply disruptions due to heavy rains and floods; food inflation had stood at 15.46% in the week ended September 11.

Weekly Technical View:
Nifty has closed higher for 5 consecutive weeks and trailing positions is the best approach for short-term traders. 6070 is important support for next week while 6000 is major psychological support now. 6357 is all time high for the Nifty and with current momentum that looks to be achieved soon. This has become a fast market and gains in intraday are very high, next important trigger would be Q2 results and INFOSYS is scheduled to announce results on 15 Oct. Nifty rally from 5348 to 6153 which has taken 22 trading days and has been very sharp so if any correction happens, that would also be equally violent; Nifty below 5850 only weakness can start, 20DMA 5861 which would be strong support on closing basis.
Support 5950/5880/5790 Resistance 6060/6180/6300

Sensex has closed the week higher by 500 points at 20445 and it nears probable channel resistance near 20950. In the last 22 trading sessions Sensex has never broken below 5-day lows and now that is 19864 which would become important support to keep short-term up trend alive.
Support 20240/19950/19800 Resistance 20529/20950/21200
Technical Call: FSL (Rs 28.80):- The stock trades in up channel on Daily graphs and on Friday it has closed above its 200DMA. Stock sustaining Rs 27 levels can rally towards Rs 31-32 levels.

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