CONFUSION MAY RULE TRADERS MINDS
After Monday’s strong session, the domestic markets dropped in yesterday’s trade on the back of sell-off in technology, telecom, power, metal and healthcare sectors. The benchmark indices retreated from 30-month high levels amid concerns of valuations exceeding the earnings growth outlook. The weak global markets also led to further decline. However, the overseas investment in the Indian equities climbed 54% this year, driving the Sensex to the most expensive in Asia and the BRIC markets, which include China, Brazil and Russia.
Nifty futures opened today on a slightly lower to flat note by approx 17 points @ 5462. It made an early attempt to break pass the 5480 mark but failed and made an intraday high of 5475. Nifty futures also swiftly moved lower to register an intraday low of 5440 and traded the rest of the session in a range bound pattern, finally closing the day @ 5462.
Technically market is looking to head ahead from here onwards for the levels of 5600 to 5610. The next key resistance seems to be at the level of 5500. Decisive closing above this level may take up it till the levels of 5600 to 5610 in near run.
Nifty Call options of strike 5500 added open interest by 11417 lots while Put options of strike 5300 had a strong build up of 24996 lots. Put options of strike 5200 also added 23278 lots to open interest.
The European market indices, the FTSE, CAC and DAX closed with losses of 0.63, 1.24 and 1.03 percents on Tuesday.
Crude oil prices ended lower but managed to pare their losses partly on Tuesday, 10 August 2010. Prices fell as the dollar strengthened.
The Federal Reserve statement said that the recovery is slowing and again pledged the lower interest interest rates for an extended period. The Fed also announced it's intention to roll over it's holdings of Government bonds on maturity which lead a late hour covering in the stock and bond markets.
Bond Market Update: India’s 10-year bonds were little changed, near their lowest in almost a week, before release of industrial output data for June this week.
Market Sentiment:The market breadth was negative as declining stocks outnumbered the advancing ones. Of the 3,087 shares traded on the BSE, 1,706 shares declined whereas 1,283 shares advanced. Ninety-eight shares traded unchanged.
BROAD OUTLOOK: Nifty Futures is still stuck in a narrow band of 5380–5480 level and making frequent attempts to break the higher side of the range of 5480 and move higher, but a lack of volume and momentum is not helping Nifty Futures to break through the barrier. At present, a short term support at 5420 mark and thereafter @ 5380 and a major support comes in at 5250 level. On the upside a break pass the 5480 mark will take Nifty Futures to 5550 level and thereafter to a major resistance @ 5600 zone.
FOR TODAY: Globally all markets were in dip red yesterday. Asian Markets except Hang Seng are trading in red at present. SGX Nifty is trading at 5448.50 (-13.50). Except a negative opening. On an intra-day basis, Nifty has a support at 5445 and is likely to face a resistance near 5490. If it breaks 5445, it may go down further to 5420 and then 5400. However, if Nifty is able to sustain above 5490, 5510-5535 would become the next target (positional). Be cautious in long position below 5430. BANKING and IT STOCKS may face more selling pressure. If possible, Buy Bharat Forge on dips.
NOTE: More calls on the other blog in Comments section.
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