Monday, February 23, 2009
Unlike the trend has been for years, we are going to witness the overall markets dominating the futures movement and the expiry rather than futures outstanding dictating the overall market trend. Markets might open with a downside gap and may take support at lower levels. 2660-2680 provides a good support for Nifty and we may see a bounce back from these levels. It Nifty manages to close below this band, we might see another sharp fall to 2500 very soon. Markets have to correct to levels of October-November lows sooner or later in line with the other global markets and it is a good opportunity for traders to build short positions in Nifty at rises. The heavy weights have to correct from this juncture and we will witness the 2500 levels in Nifty very soon. We have been recommending short positions since past 6 months and we continue to hold this belief that markets are heading for much lower levels. And the outlook cannot be complete with this last sentence “Avoid long positions at any level”.
Sunday, February 15, 2009
Nifty decisively broke the level of 2900 and closed above it. Multiple resistances exist above 3000 and we do not see any reason for the markets to add on to these gains. The interim budget is going to be presented in the Parliament today and hence expect volatility for this week. One should try to get out of equities at every opportunity. Medium term traders should utilize the opportunity to progressively build shorts with 2-3 month perspective.
ABB @ 444-446 Tgt 430, 419 SL 454
Praj Industries @ 61.5-62 Tgt 56 SL 64
India Infoline @ 52-53 Tgt 48 SL 55
Sterlite Industries @ 280-282 Tgt 263 SL 294
Sunday, February 8, 2009
Markets recovered from the lower levels in line with the global markets and were held strong on the last trading day. Some of the small cap counters in F&O rallied after being beaten down continuously for past many months. Market breadth was negative for the major part of the week. Realty stocks witnessed mixed trends as the biggies DLF and Unitech got a drubbing while the smaller counters recovering smartly from the lows due to short covering. IT, Banking, Pharma and Financials lost further ground during the week while Cement and Shipping stocks were among the sectors which gained the most. Grasim, HCL Tech, ACC, SAIL and GAIL were the top Nifty gainers while Hindalco, M&M, Suzlon, HDFC, Reliance Infra, L&T, Reliance Power, Tata Motors and Sterlite lost anywhere between 5-10%.
2880-2900 is a crucial resistance area for Nifty in the short term. Markets may open with an upside gap given the strong global clues but there is every possibility that they may correct. A close above 2900 on Nifty may spring an upside surprise of another 100 points but the rallies are not likely to sustain. We might see distribution in many stocks taking place in the coming week/s and markets, in all probability, may resume their downward journey again. Wait till later half of the week for higher levels to create short positions progressively with a 2-3 month perspective. The possibility of negative surprises is looming large in the markets and it may come in at any time and in any form. Avoid long positions at any levels.
HCL Tech @ 130-132 Tgt 118 SL 135
Polaris @ 52-53 Tgt 48 SL 55
Mercator Lines @ 32-33 Tgt 28 SL 35
Sesa Goa 100-102 Tgt 90 SL 106
Ispat Industries @ 12-12.20 Tgt 10.60 SL 12.60
Sunday, February 1, 2009
The rally we saw just now is purely due to short covering and is not backed by genuine buying and hence we feel that it is not sustainable. The bounces that we are witnessing are bear market rallies, which have the tendency to create lower tops. We feel that it will take a very long time for this bear market to reverse or even find a bottom. One should trade on both sides once the markets finish the fall and form a trading range. At this point in time we recommend remaining only short. Short term resistance on Nifty exist at the current levels and a close above the Friday’s close may see Nifty trying to stage back to 2950 and further 3100 levels. But that looks an uphill task given the fact that markets already rallied quite a bit last week. One should not be fooled by the rallies of this kind and continue selling without worrying too much about the upside. We expect fall in Sugar, Cement and Infrastructure stocks in the following weeks and hence recommend traders to build short positions with adequate stoplosses.