10:49 November 16, 2009
After a sharp 9%+correction markets closed last week recovering 4% of the lost ground. Nifty is facing strong resistance around the 5030 level. However every time it got sold at the 5030 level it bounced back with resilience from the 4950 levels. This indicates that support strength increasing at the 4950 crucial level.
The current uptrend will get fractured only if the market closes below 4890-that would be the point that short sellers would get very active again
On the other hand, once the market crosses 5030, the next resistance will be only at 5088-beyond 5088 technically markets are poised to make higher highs than that made three weeks ago
One should keep a watch on dollar index and the global markets-that would continue to provide the basic sense of direction which they have for the last couple of months
As for sectors-last week Pharma and Tech out performed. Towards the end there was some profit taking in Pharma - many stocks like Lupin, Dr Reddy and Cipla still look attractive on any dip.
Tech on the other hand continues to remain strong and further gains of about 5-10 percent looks on the cards- Infosys, Wipro, Tcs –all three giving fresh buy signals. In the midcap section Patni looks poised for a good move.
Banking consolidating for the moment, selective moves will happen during the week-Kotak, Yes, ICICI Bank look good. PSU banks need some more consolidation at this high level. Allahabad Bank could however move up still.
Oil and gas has started picking itself up from the battered state it was in-some build up seen in ONGC-but nothing yet to write home about. The same goes for reliance.
Realty continues to be battered and bruised-if the markets bounce then a pull back-and that too a sharp one can be expected in the large cap realty stocks. Midcap realty stocks like Brigade and Anantraj have already started the up move again and looks like that shall continue.
Infra and construction sector looks poised to move up after a decent consolidation phase. Larsen, HCC,IRB, Nagarjuna Constn all looking good for a fresh move.
Sugar has moved sharply and technically though over bought, fresh signals for purchase in many stocks like Dwarkesh, Dhampur would be a good pick on dips for target of 170 around in the medium term.
Cement trying to get out of the woods but nothing dramatic as yet.
Last weeks dash to safety saw good moves in FMCG stocks like Dabur. If the markets move up these stocks can linger at these levels and consolidate. Nestle would be a good pick on dips up to 2550 and Dabur too, if it dips close to 155.
Autos after the correction may move this week. Hero Honda, Mah and Mah, Tata motors all look good on charts.
Tea will continue to outperform.
Entertainment sector looks poised upwards with zee leading the race. Expect good moves in zee, zee news,wire and wireless, network 18.
Metals, being the high betas that they are, one can expect fireworks to continue as the market moves upward in relation to the dollar trade. The entire pack looks poised for further gains.
That brings me to the last sector to watch-power-will move in line with markets- NTPC, REC and CESC looking good on charts for up moves.
Trade safe-use stop losses and do sell at targets