17:44 April 05, 2010
Nifty retraced to a low of early 5200s being weak on Tuesday and Wednesday but pulled back smartlyon thursday on positive global cues to close at 5290 for a curtailed trading week. week on week the market has gained 41 points,a little less than a percent but the undertone is definitely bullish. An important indicator would also be the breadth of last week versus the breath of current week which is again pointing upwards as a direction for the nifty. The nifty fifty and large caps were the major contibuters to the markets moving up last couple of weeks. This week we saw the market breadth opening up to accomadate a lot of midcaps from various sectors. Overall the macd slow and fast line are converging,rsi is moving into a buy mode,stochastics positive without being overbought for now-the buildup ideal for a positive week ahead. Internationally down is poised to take on the 11000 resistance zone too
Our sectoral plays were as follows:
Banking – holding strong ,many large caps and midcaps consolidating. HDFC proved to be a leader last two sessions with a close of 2782(over the level of 2760) –now looking poised for 286 .PNB consolidating around 1015 levels-should soon be around 1050 levels. Yes Bank will see more momentum build up above the 262 levels-taking the same logic ahead there would be resistance at around those levels .Bank of Baroda, Obi, and Iob look poised for another positive breakout. Dena and Allahabad too are showing build up of positive momentum.LIC Housing post the IIFL report resurfaced with fresh momentum which took it close to 900-now consolidating now at about 885 – can expect a fresh surge any time to 950 levels –any dip a good time to enter this stock
Thursday evening showed a lot of promise in the construction/infra sector/industrials.
Bhel - closed at 2415 shrugging off weeks of weakness and looking good for 2610 now. Jai prakash industries has moved up the 150 levels ,sustaining 153 would lead to a momentum build up to 166.crompton greaves moved up 4% is still looking good for another 5%Larsen and toubro continues to gain in strength closing at 1650 for the week -crossing 1670 would lead to a burst to1730-beyond that-as and when it gets there will mean that the stock is out of the blues and can look at attempting the 1850 level-if Larsen does that-(as and when it does –it could be this month post results or a quarter away)it would bring an end to the underperformance of the entire infra and construction sector and this catch up with banking and metals sector performance can make the nifty surge % odd percent-this would augur well for the realty sector as well since the next rub off comes there-this is one signal worth watching out for.
Metals - continue to stay strong-Hindalco came up to 186-187 levels-faced profit taking and retraced a bit before again getting strong on Thursday along with Tata steel, Hindustan zinc and Sterlite-would expect some more fireworks here-tata steel is just 10 rest away from its 52 week high and a breakout can give wings to the entire sector-hind zinc looks poised to attempt 1340, Hindalco 192-196.Sterlite on the medium term seems poised for 915
Autos - Tata motors looking very good to test 796 levels, Bajaj auto holding well at 1999 despite other autos correcting ,Maruti after moving to 1427 resistance retraced back to 1393 around support levels of 1387- Hero Honda saw some profit taking for 3 sessions but closed positive on Thursday after opening weak, making this a buy zone for the stock - more than auto as thought so last week the ancillary sector looking promising- Exide, Rice Auto, Amtek Auto all seem good on charts.
IT - saw profit booking and then TCS bounced back with promise on Thursday –for Monday wipro looks good to attempt the 740 levels-infy results are on 13th so that play can be a week away still. midcaps like Patni and Mphasis have started showing promising moves –on dips both these midcaps look good to pick-mphasis has support at 615 and resistance at 650and 670.Patni after three down days regained 550 levels gaining three percent for the day-the resistance now is around 570
On the weaker notes-bharti gave up the 310 levels and is back to 302 supports-a further weakness can take it to 296 levels-it is still stuck at the 310-320 resistance a break from there could take it to 340-350-consolidations test patience and this one surely is
Hul - after bouncing from lows of sub 220 to 240 again gave up almost 4% to close at 230 –a break downward below 229/228 could lead it to 218
Picks for the week:
Mercator Lines @58.6 SL 57.15 TGT1 60,TGT2 63
Rico Auto for a target of 30 with a SL of 26.75
Ksk Energy for a target of 195.5 with a SL of 186
Nagarjuna Constn for a target of 172 and then 184 with a SL of 162
Subhash Project for a target of 165 and a SL of 148.9