Dated 25th November, 2008

Both the major indices Sensex and Nifty lost close to 5% and 4% respectively during the week. It would have been much worse but for the startling display of short covering on Friday. Markets were weak through out the week and recovered sharply during the last hours of trading on Friday. The market breadth was extremely negative. Almost all sectors took the hit except some pharma and cement counters. Ambuja Cement, BPCL, Zee, Ranbaxy and NTPC were among the Nifty gainers while Unitech, Tata Communication, DLF, HDFC Bank, ICICI Bank, Tata Power and HDFC were the top losers.

The sharp bounce back that we saw on Friday is not likely to last for long. Any sharp rise is an opportunity and one should use these opportunities to exit and build short positions. The fall is not likely to be abated at this juncture and we might not see any big upside in the immediate term. Nifty may at best try to climb to 2800 where it finds resistance before F&O expiry but it is almost certainly comeback to the supports of 2500 and 2360. A short trader must take his chances and maintain short positions. Markets are adjusting the excesses and trying to come back to what is being called fair valuation. Stocks are on their way down and are yet to stop. Buying should be contemplated only when the fall comes to an end and markets consolidate for a reasonable amount of time, which is a long drawn process. In all probability, we are not going to see that happen any time soon. This bear phase may remain for a time longer than expected. Do not ponder over buying but try to exit.
“Trade what you see and not what you think”.

SELL
JSW Steel Sell @ 210-212 Tgt 184, 170 SL 217
National Aluminium Sell @ 180-182 Tgt 168, 160 SL 190
Indian Hotel Sell @ 49-49.50 Tgt 45, 43 SL 50
Cairn India Sell @ 141-142 Tgt 132, 125 SL 145
SBI Sell @ 1220-1230 Tgt 1120, 1070 SL 1245
HDFC Sell @ 1450-1460 Tgt 1320, 1200 SL 1500