Market Outlook For 19th Jan 2010
Nifty attempted a breakout above 5285 but again selling pressure at higher levels proved to be too strong.
Still, Nifty managed to close around 5275 and that too in a backdrop of subdued Asian markets. Banking
stocks were in demand and that is good news for the market as a whole because banking as a sector has been
subdued for some time now. Good results in Axis and HDFC Bank have perked up the sentiments towards
banking counters. HDFC bank moved higher after posting good results and is looking good for more upside.
Allahabad Bank was up more than 5% and it has given a breakout above 138. It could target 152-155 in
coming days.
Yes Bank also has a target of around 295 if it sustains above 273.Others like Federal, Vijaya Bank, Ind Bank
and BOB could also move higher. PSU stocks continued to zoom as more buying was seen in counters like
STC, Neyvelli, Dredging, Balmer Lawrie and others. The PSU pack has reached frenzied levels and some
amount of profit taking cannot be ruled out at current levels. Realty counters are again attempting breakout
and DLF and HDIL in particular could seek higher levels. Others that are showing positive bias are Praj,
Rolta, HCC, BEML and India Infoline.
Nifty has support around 5210 and then around 5160-70 while above 5285 new targets of around 5385-5400
would open up.
Scrip Buy Above/Sell Below S.L. Target Horizon
KOTAK CASH BUY ABOVE Rs.859 846 868/878 2-3 DAYS
ROLTA CASH BUY ABOVE Rs.209 199 213/218/226 3-4 DAYS
STOCKWATCH
GUJARAT ALKALIES ( Rs.137.05) : The stock in the daily charts has given a fresh buy signal. Buying is
advised above Rs.138 for a target of Rs.146 and Rs.157.Higher target of Rs.162 is also possible. The time
frame for the trade would be around 7-8 trading days.
HYDERABAD INDUSTRIES ( Rs.580) : The stock in the daily charts has given a fresh buy signal. Buying
is advised above Rs.580 for a target of Rs.615 and Rs.640. Higher target of Rs.675 is also possible. The time
frame for the trade would be around 15-20 trading days.
NIFTY remains in Trading Range
Is the Consolidation a substitute for a correction?
Often, in a strongly up trending market, a correction can be take the shape of a consolidation. In such cases,
the bulls do not allow prices to fall, even for a correction. Since the Market is overbought, a consolidation
takes place which is in fact a substitute for a correction.
It is possible that the current sideways move may also be a substitute for a correction. The Nifty has strong
support around 5150. Our trading idea for the current scenario is this: We assume that the Nifty remains in
an up trend. A close below 5150 will tell us that we are in some kind of a correction. So far the Nifty
remains above 5150, the strategy should be: buy on dips.
A breakout above 5300 should see a sharp up move to 5500 or even higher.
Resistance for the Nifty seen around 5300 and Support for the Nifty is around 5150