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.
SELL
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
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