"WEEKLY VIEWS FOR THE WEEK 22.03.2010 TO 26.03.2010" - Focus on midcap space.(updated on 25.03.2010-NIGHT)

Last week, India was among the biggest gainers in world markets . A raft of positives S&P sovereign outlook upgrade from negative to stable, good advance tax payouts by India Inc. and inflation reading at four-month low pushes the market higher for the sixth week straight.

The BSE-Sensex added 412 points and closed with a weekly gain of almost 2.4% whereas Nifty added 126 points with a weekly gain of almost 2.45%. FIIs were net buyers all through the week. The domestic institutional investors (DIIs) were the net buyers for the week though indulged in selling for some sessions. It was followed by China and the US, which were up nearly 1.8% and 1.1% respectively.

Last Friday, the RBI raised unexpectedly both the repo and reverse repo rates by 25 bps (0.25%) each to 5% and 3.5% respectively. These rate hikes may be insignificant to impact the economic recovery. But importantly, the RBI's action is a clear sign of things to come and act as a trigger. With the central bank getting uneasy about rising food and non-food prices, we foresee more such hikes over the next few months. The next could well come on April 20, when the RBI will meet to review its annual monetary policy.

Treat any correction in stock prices triggered by RBI's latest and future rate hikes as healthy. These will bring valuations of good quality stocks at reasonable levels for you to buy into them.

FOR MONDAY (22.03.2010):: The RBI's move may offset the S&P's sovereign outlook and hit interest rate sensitive sectors like banking and realty. Market may open a big gap-down (even 2 % down opening on bourses) on the context of SGX nifty future trading at 5194 (at the time of writing this). If nifty spot can hold 5200/5180 level, then it will try to recoup the losses. However, above 5222, we will be comfortable for long (positional).
For NIFTY Trade ::   
Action  Price             SL         T-1    T-2      T-3
Buy      5279           5266      5286   5299   5320
Sell       5260           5271      5257   5237   5223
You may see the level of 5200 also on Monday.
Nifty future(EOD) (25.03.2010)::
Price : 5274.70 Premium Rs.20.55 (0.39%)
Turnover : 809430.18 (-6.3% ) Lakh
Open Interest : 22058050 Sheds -293250 (-1.33%) Shares
Nifty Options::
CE : 5200.00 (25-Mar-2010)
Price : 86.05
Turnover : 724948.05 Lakh
Open Interest : 4461550  Sheds (-389750.00) Shares
PE : 5200.00 (25-Mar-2010)
Price : 13.65
Turnover : 600153.46 Lakh
Open Interest : 7483250  Adds (329250.00) Shares
CE : 5300.00 (25-Mar-2010)
Price : 23.45
Turnover : 625272.80 Lakh
Open Interest : 6226800  Sheds (-55200.00) Shares
PE : 5300.00 (25-Mar-2010)
Price : 45.40
Turnover : 403124.20 Lakh
Open Interest : 4037200 Adds (823000.00) Shares
STOCKS::
WATCH & BUY "BHARATI", "GMR INFRA" AND "MERCATOR LINES" ON DIP. Bharati may touch 320 in this week, GMR Infra may touch 60-62 and MLL may touch 62-63, if crossed 60
Note: Traders are advised to trade in Cash/options/futures according to their risk appetite.
THE WEEK AHEAD:: Nifty January high at 5310 is the highest point in last 24 months and once above that rally would strengthen more but failing to crossover would be a sign of caution for. Unless Nifty does not cross the 5300 mark the momentum will not return to Nifty. On the down side, the support for Nifty Futures is at 5180 – 5200 zone. Only a close below 5180 will end the short term uptrend taking Nifty Futures back towards 5000 mark. On the Upside, The next is all the way up towards 5450 – 5500 zone.
CAUTION::One must not ignore the factthat Chaiwala, panwala, chatwalas (common majority people) are the best market indicators, When they start buying and investing in this market then be assured that the market is going to crash soon. And when they talk of correction or anticipate panic in the market then it is for sure that this is the time for tha markets to go up.

FOR TUESDAY (23.03.2010)::  As  expected, the nifty opened gap down yesterday on weak global cues and apex bank’s decision last week to raise the repo rates but it recovered sharply in morning trades which however, remained short lived under selling pressure. The NF drifted lower as the session progressed. The counter finally closed the session losing 61 points. The NF remaining in the over bought zone, saw profit taking and shorting at higher levels.
However, the NF to gain strength needs to trade and remain above 5227.75 whereby it may move up to 5253/5277. Strong support for the NF exists at 5186.25 which if breached decisively with volumes then NF may slide to 5173/5148. Market will open positive and will try to hold 5222.
Watch & BUY  for very short term AREVA T&D, ONMOBILE AND PUNJLLOYD for a decent 3-5% gain.
It is advised to trade with trend only. Watch market price and trade accordingly. No chart, no analysis, no tips.

23.03.2010 (NIGHT)::  I hope and believe you all enjoyed call on AREVA T&D today. My target was 5% in very short term. We got almost 10% in a single day !!!!!!!!!!!!!!!
Tomorrow (24.03.2010) market is closed. I'll update tomorrow night and will give one-two stock recommendation for cash segment/future/options.

FOR THURSDAY (25.03.2010)::  Being expiry day, market will be volatile. I must say better to avoid any trading especially in FNO segment of March series. Strong support exists at 5177-80 and strong resistance at 5268 level. If market trades above 5241 level for atleast 15 minutes, go long for target 5160-5168 level. If market trades between 5220-5240 level, go long around 5221 level for a target of 5240 level and vice versa. If market trades below 5220 level, go short for a target 5200-5180.

My believe is expiry will be between 5210-5250 level.

Watch closely for AMTEK AUTO, GTL INFRA. No intraday buy is recommended for tomorrow i.e. 25.03.2010.

FOR FRIDAY (26.03.2010):: Nifty future is at 5277 in the first day of April series. It has finally given a break-out for short term. We may see the level 5300 now within a few days. For today, resistance is around 5306 if it cross 5289. If and only if it crosses 5306 decisively on closing basis for three consecutive days, we may see the level of 5586 also in this expiry. On the downside, a series of earlier resistance will act as supports now like 5268-5255-5239-5224-5199-5180.
For today, better not to carry any today's long. Being Friday and since RBI has also given a hint for increasing repo rates etc., market may show some sluggishness.
Yesterday, the most favourite stock was RPOWER, though I want to avoid it on yesterday because of expiry day. Look for CA 150  in day's low. You may get around 12-15 next week.
WATCH RIL for a target of 1110 now.  HDIL has given a breakout. Strong support is around 287. If trades above 290, buy and hold for a target of 295 and 299.