09:58 June 14, 2010
“idhar chala mein udhar chala jaane kahan mein kidhar chala,phisal gaya ,yeh tune kya kiya”-the song best describes the nifty performance for the last month. Didnt know where it was going- and kept blaming Dow and Europe for the drops which kept coming.Well its at that crucial point once again-at 5119- its breathing very close to the crucial 5150-60 level which holds the 50dma. Hard to say whether more shorts will build up there as seen last week or will it finally break the barrier and force shorts to square which will zoom the markets to 5220-5240.if I were to give my gut view then 60-40 in favour of an upward breakout. The strength of the 4950 level and importantly also of the 4766 levels have increased with the sustenance of the market above 5000 despite global volatility. The key to have a bullish pattern formation is consolidation and spending a few days in the 5100+ zone would be looked upon as a healthy base formation (for a good upmove in July). Positives –moonsoon onset, good IIP nos negatives –sorry but yet again global markets, though here too there is some heartening news with the Dow having the first positive weekly close in 4 weeks and Chicago VIX falling to 28.39 the lowest since April 30th. Nifty has a positive candlestick formation for trade today and R2-5172 R1-5146 S1-5085 S2-5050 will be levels for day nifty trades.
Banking & Financials
Banking gave some mixed signals last week and some profit taking was seen in specific stocks. SBI gaining in strength and with it the banking index too. If SBI holds above 2350 and bank index over 9400 we can see a fast move to 9700. Small banks like Vijaya , UCO, Dena which were flat the full week can then pull up their socks and run another 100 mtrs race for the next 5-7 percent move. BOB and PNB look poised for a steady growth. ICICI at 846 should be bought here and on dips to 825 for a move close to 900. IDBI getting resistance at 117- a breakout over that will take it closer to 130 levels. IFCI which is in FnO curb is looking poised for 58+ levels
Capital Goods & Infra
Infra/industrials /constn will lead again this week-here both large caps and small caps are showing strength. Larsen at 1677 looks like will attempt its 52week high of 1730 soon and give a breakout for 1850 kind of levels, BHEL looks poised for 2560 levels. In the midcaps there are a host of stocks which look poised for a upward move namely- Sadbhav, Bharat Forge, Nagarjuna(on a breakout), IVRCL, IRB, Crompton, HCC
In pharma and healthcare Fortis, Biocon, Divis, Lupin and Dr Reddy (which is consolidating after hitting 52 week highs) look good for steady Upmoves
IT & IT Services
In Info and technology sector the trading action looks to be building in Mphasis for 610 levels, TechM has moved up sharply – if it sustains above 710 for a few sessions then can give a breakout for 788 levels. Patni giving signals of weakening and since some M&A is on the cards the related news will drive it. Infy, Wipro giving mixed signals
Realty –The only two stocks showing positive build up is HDIL for 250 and then 260 levels and Parsvanath.
Metals- as of Fridays charts of most commodity stocks are giving buy calls -recovery of about 5% is indicated in most- JSW Steel, Bhushan, SAIL, Hindustan Zinc, Sesa, JSPL. If global markets remain flat to positive then one can look to play these as a short term trading call. Noteworthy is the fact that material stocks closed positive on the Dow on Friday.
Telecom still range bound
Oil & Gas
Oil and Gas picking up steam-reliance showing strength-closed over 1040 levels-if holds the 1023 levels will attempt 1150 levels soon. Other stocks which are showing strength in the sector are Hind Oil Exploration, Essar Oil, Chennai Petro, Cairn, Oil India and ONCG
Shipping stocks move sharply every now and then and like metals can give a good intraday upmove. MLL looks good to attempt closer to 47 levels and GE and SCI will give it company in terms of similar percentage moves
Calls for the Day / Week
Larsen, MLL , Cairn , Hindustan Zinc and Biocon
Larsen SL 1633 swing TGT 1850.
Biocon SL 292 TGT 333
Cairn SL 294 TGT 321
Mll SL 43.65 TGT 47/54
H zinc SL 940 TGT 1012/106