Markets made a strong bounce back after remaining range bound the previous week. Both Sensex and Nifty gained more than 3%. Banking Index contributed to the rises by rising more than 6% week on week. Metals and Pharma were the other sectors which gained the most. It was not a very good week for Technology, FMCG, Auto, Cement and Power. Erstwhile outperforming Sugar sector lost some momentum and ended the week with losses. Reliance rose nearly 8% during the week and other biggest gainers were Hindalco, ICICI Bank, Sterlite, Tata Steel, SBI and Tata Motors. The major Nifty losers were REC, HUL, Maruti, M&M, Suzlon and DLF. All in all it was a good week for stock specific traders.
Markets refuse to come down irrespective of whatever fundamentals. The entire rally is driven by liquidity and every rise is being treated with caution. As long as caution is in the air, we don’t expect the markets to correct substantially. Hence one must trade long with STRICT STOP LOSSES. Buy on sharp corrections with an overall stop of 4460 on Nifty. 4600 remains a strong support in the short term and the next resistance comes only at 5000. Since most of the asset classes across the globe are moving in tandem, expect our markets to follow the global trend. One must not commit long term funds in the markets since it would be difficult to contain the fall when it really happens. Wait for the confirmation of reversal to build short positions.
Buy
LITL @ 410-412 Tgt 444, 500 SL 390
POWERGRID @ 107 Tgt 111, 115 SL 105
YESBANK @ 170-172 Tgt 182, 190 SL 168
ADLABSFILM @ 340-342 Tgt 374, 410 SL 334
HDIL @ 298-300 Tgt 360 SL 288
ABAN @ 1460-1470 Tgt 1900 SL 1400
UNITECH @ 103-104 Tgt 120, 132 SL 97
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