MARKET OUTLOOK
Market continued to move up and in the process notched up its third consecutive closure in the positive
territory. The market breadth was strong. All the sectoral indices on BSE were in the green. Reliance
Industries which gained 4.2% was the star performer in the frontline category. The rise post budget has
caught the bears on the wrong foot and with Nifty moving past 5068 which was the 0.618 retracement level,
short covering is likely to take the market higher. The market will now face resistance at 5175 level which is
the 0.786 retracement level. Once it crosses the crucial 5175 level, bears will be forced to surrender. Hence
trading on the long side would be a prudent strategy. Fundamentally sound midcap stocks like Strides
Arcolab, Unichem Lab, Zen Technologies, Apollo Tyre, Hitachi Home etc, should be bought for decent
gains.
DERIVATIVE PICK
TECH MAHINDRA ( CASH – Rs.910.50) : The stock has completed its correction and is likely to move
up from the current levels. Buying is advised above Rs.912 for a target of Rs.922 and Rs.931-32. Stop Loss
of Rs.899 should be kept.
Happy Days are Back Again
The Nifty continues its winning spree, adding more points every ay (well, at least for the past three days!).
The benchmark Index has closed at 5088.10, up 1.42% from yesterday.
The Trend is UP
After the breakout from the trading range, the trend is UP.
Markets are probably ready for a consolidation
Why do I say this? A gain of 230 points in three days, gives 5% gains. Such gains are not sustainable. We
know it. But, we cannot say when the process of consolidation will start. It could be tomorrow, or later.
The Auto sector has run far above itself.
With Tata Motors leading the race, significant gains have accrued to this sector, as also to the Auto
ancilliaries sector. Traders should book gains, avoid buying until there is a consolidation / dip.
Is there further upside in the Nifty?
Well, we do not argue with the trend. The trend is up. So, traders should look to buy on (a) dips, (b)
breakouts from consolidations. To answer the question: AT thisa point, there is no prediction on what the
Nifty might do. So, just follow the market. The Nifty continues to underperform world markets. We are still
below the 2009 year end close of 5201.05. This means, we can easily move up to catch up with other
markets.
Support in the Nifty comes in around 4950. Yes, a correction can take us around these levels. Stranger
things have happened!