After trading in a small range for almost whole day, in the last hour, Nifty broke on downside and close below
5000 level. After making a doji in the last week, Nifty has made a bearish engulfing cover on weekly chart.Now
the major weekly trendline support exists around 4940. On daily chart, it is forming a rounding top pattern. Also
the major daily trendline support for Nifty exists at 4950 level. So the region of 4940-4950 level will provide
strong support for Nifty. So for the timebeing, avoid bottom fishing and wait for the Nifty to settled fist or place
stop loss for all long positions around 4940 on closing basis.Sectorwise, Banking is the weakest sector. Apart
from that, FMCG, Realty sectors are looking weak. Only IT & Pharma sectors are looking good. For MONDAY,
support exists at 4920-4940. On upside, resistance exists at 5018 and then at 5050.
Markets face selling, resistance
The Nifty weakened over the week, closing at 4987, down 130 points from the previous week closing at 5117.
The weakness has been mild, so we cannot say if the decline is a part of the 'normal' move inside a trading range
or it is the start of something more 'deadly'.
Support still holds
The Market continues to hold its support zone at 4920 - 4880. A close below this zone will be a signal of an
intermediate correction.
Outlook
The next two weeks will see a series of year end holidays, in India as well as in international markets. Such
periods see low volumes. Usually, we should expect the markets to remain either steady or mildly up.
Support for the Nifty comes in around 4920 - 4880 and resistance around 5130. We could be seeing the market
inside this range for the next two weeks.
Metals
Stocks are likely to under perform while prices of basic metals come under pressure.
So, here are Sectors that may do good
Cement, Infrastructure, Steel products, Power transmission, Information technology, Pharma, Granite, selected
mid caps.
Scrip LTP View
Bajaj Hind 212.35 Bajaj Hind is trading in a narrow range of 203-213. Break out/Break Down
from the trading range could be buying/selling opportunity for traders.
Grasim 2402 Grasim is trading in a narrow range breakout or breakdown from a range can
provide a buying or selling opportunity in the stock.
Mphasis 725.60 Mphasis seems to have completed its correction. Traders can Buy the stock
with stop loss of 690 and target of 780.
Rajesh Exports 83.60 A Rajesh export breaks out from trading range of 75-82. Traders are advised
to buy stock on dips.
Rallis India 923.65 Rallis has seems to complete its pullback after sharp rally. Traders can buy
the stock on dips with stop loss of 865 and target of 1050.
Sun Pharma 1504.75 Traders can buy sun pharma on dips with stop loss of 1440 and target of
1560.
Tech Calls
Scrip LTP Buy Above/Sell Below S.L. Target
ABB 762.7 Above 766 755 782 1-2 Days
DCHL 157.6 Above 160 153 174 2-3 Days
MPHASIS 725.6 Above 731 710 774 3-4 Days
Corporate Highlights
• Sona Koyo Steering Systems is currently in talks with a local Tier-II supplier that services Hindustan Aeronautics
(HAL) and Boeing for supply of components.
• Ministry for New and Renewable Energy announced generation-based incentive scheme for grid-connected wind
power proj; generation-based incentive of 50 paise a unit for electricity fed into the grid from wind power proj
• Hindustan Copper board approves upto 20% disinvestment; an FPO of another 10% likely
• Order book as of Oct 1 in excess of Rs 700 Cr; effects of global meltdown tapering off; to invest about Rs 48 Cr
into Simco-Birla: Titagarh Wagons
• Prakash Industries to add 625 MW in power capacity; Phase I to be commissioned by Dec 2010; not to raise addl
capital, entire debt at Rs 170 Cr; to repay debt of Rs 170 Cr in few months.
• Suzlon repays USD 780 million of acquisition loans