11-Jan-2010

Markets traded the week with positive bias. Though the indices did not reflect the positivism, as both Sensex and Nifty closed the week with partial gains, the sentiment remained buoyant in terms of sentiment. Midcaps were the biggest gainers and the market breadth remained extremely positive. Energy, Metals, Cement, Shipping, Realty, Infrastructure, Sugar and Fertilizer stocks were among the top gainers while Technology stocks witnessed some correction. Grasim, Siemens, Cairn, DLF, Hindalco, Tata Power and M&M were the top Nifty gainers while Maruti, TCS, HCL Tech, Infosys and Hero Honda were the top losers.

Though markets looked particularly strong in terms of market breadth we feel that there is more reason to worry in the immediate term. Already sectors such as Technology and Automobiles started to show fatigue and are trading weak. Infosys third quarter result is the next big event that markets would look forward to in the coming week which may set the tone for the immediate direction of the markets. Nifty is trading above its crucial resistance level of 5200 and will in all probability set for creating higher levels. A close below 4940 should bring in weakness. Any weakness towards 5000 is a buying opportunity with a day close protection below 4940. It is interesting to see which sectors take the baton to take the markets forward. We expect Reliance and ONGC to lead the markets from here on as the underperformance is continuing for quite a long time. The time is ripe for them to start participating in the rally. Be cautious and trade with Stoplosses.

BUY
POLARIS @ 178-180 Tgt 200 SL 170
KSOILS @ 70-71 Tgt 81, 90 SL 67.50
ONGC @ 1190-1200 Tgt 1360 SL 1150
BHARATFORG @ 278-280 Tgt 310 SL 270
HINDALCO @ 170-172 Tgt 200 SL 162

SELL
CROMPGREAV @ 423-426 Tgt 400 SL 430
DCHL @ 167-168 Tgt 155 SL 170
LT @ 1700-1710 Tgt 1620 SL 1725
GTOFFSHORE @ 482-484 Tgt 440 SL 492
EDUCOMP @ 785-790 Tgt 740 SL 800