Markets were trading mixed for the week with favorable market breadth. Both the major indices Sensex and Nifty lost close to one and a half percentage points but the action was outside the index. Many mid-cap stocks moved significantly as is reflected in the Nifty Junior and Midcap indices, which gained 4.86% and 1.38% respectively. IT stocks were the clear losers during the week. Realty and Infrastructure stocks were among the major gainers ahead of the announcement of fiscal package. Unitech, Tata Steel, Tata Motors, Zee, Grasim and ACC were among the major gainers while HCL Tech, M&M, Infosys, Maruti, Cipla, Satyam, ONGC, TCS and Sun Pharma were on the losing side.

The clues going into the next week are heartening. The weekend fiscal initiatives, RBI’s REPO rate cut and the strong global markets may script a positive gap up opening on our markets. Markets may start buoyant but that is unlikely to last for a long time. 2810-2830 is a strong short-term resistance on Nifty and it may find it difficult to breach and close above this band. Multiple resistances above 2900 make it even more difficult for a rally to sustain. On the downside expect supports at 2620 and further at 2500. We expect selling pressure during the later half of the week which makes risk reward favourable to a Short trader. It is a good opportunity for investors to exit their holdings and for traders to initiate short positions. The long-term trend is clearly “Down” and a “U-Turn” looks near to impossible. Do not get tempted to buy. Sell at rises with medium term perspective.

SELL
Cairn India @ 136-138 Tgt 128, 119 SL 141
Bank of Baroda @ 254-256 Tgt 241, 227 SL 262
Idea @ 51-52 Tgt 46, 43.50 SL 54
LIC Housing Fin @ 222-224 Tgt 198, 184 SL 227
Jindal Steel @ 850-860 Tgt 780, 720 SL 880
Rolta @ 149-150 Tgt 136, 123 SL 153

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