25-Jan-2010

It was one of the worst weeks we’ve seen in the recent past. The week started on a positive note despite weak global clues but couldn’t sustain the rise and markets started falling with heavy volumes. It all started with the Chinese curbs on liquidity which took its toll on the markets across the globe whether they are equities, commodities or currencies. It was a global crack down triggered by fears of unwinding of stimuli. The market breadth was extremely negative and almost all sectors lost ground. Pharma, Metals, Technology, Cement, Infra and Realty stocks were the biggest losers. Idea, HCL Tech, Maruti, Bharti, Hero Honda, BHEL and HUL were the only Nifty stocks which survived the wrath of the markets. Suzlon, L&T, Unitech and JP Associates were the Nifty stocks which lost more than 10% during the week.

The markets don’t look too good going into the next week. The global markets are trading weak and in all probability we may expect an opening below 5000 on Nifty. 4940 on Nifty is a crucial support in the immediate term. A close below this support is crucial for the markets to continue the uptrend. 5200 remains the crucial resistance. We see markets trading with weak bias with stock specific performances if Nifty manages a close below 4940. The results season is coming to an end and the rumour mills will be busy predicting the budget sops but the short term direction will depend on the external markets rather than on their own fundamentals. Despite weak markets there are certain set of stocks which look resilient and may throw some surprises on the upside like Chambal Fertilizers, BRFL, Triveni Eng, BEML, Petronet, Titan, Bank of India etc.. Avoid short positions in these stocks.

SELL
ABB @ 820-822 Tgt 780 SL 835
RELCAPITAL @ 860-865 Tgt 800 SL 880
LT @ 1510-1520 Tgt 1400 SL 1540
MPHASIS @ 700-705 Tgt 664 SL 713
ORIENTBANK @ 250-252 Tgt 238, 224 SL 260
JINDALSTEL @ 680-682 Tgt 660, 640 SL 690