"MARKET OUTLOOK & TRADING IDEA FOR THURSDAY (05.05.2011)"

FIIs were net sellers with the tune of ` 922.15 crore (prov. cash market fig).

The BSE 30-share Sensex was down 65.33 points or 0.35% to 18,469.36, its lowest closing level since 24 March 2011. The index rose 69.67 points at the day's high of 18,604.36 in mid-afternoon trade. The Sensex lost 195.16 points at the day's low of 18,339.53 in morning trade. The S&P CNX Nifty was down 28.10 points or 0.50% to 5,537.15, its lowest closing level since 24 March 2011. The Nifty hit a low of 5,503. Nifty had hit an intraday high of 5,578.80. The BSE Midp-Cap index fell 0.45% and the BSE Small-Cap index declined 0.54%. Both these indices underperformed the Sensex.

The market breadth was weak. On BSE, 1109 shares advanced while 1701 shares declined and a total of 117 shares remained unchanged. Among the 30-member Sensex pack, 19 declined while the rest of them gained.

The total turnover on BSE amounted to ` 2704 crore lower than ` 3109.10 crore on Tuesday, 3 May 2011.

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VIEWS FROM DIFFERENT BROKING HOUSES:

CANARA BANK SECURITIES (CanMoney): “Technically, Nifty witnessed consolidation in today’s session but remained in its short term downward trend by closing on bearish note for the eight continuous session. Though selling was quite apparent in the market, yet Nifty witnessed some buying in the indices pivotal. Yesterday, Nifty breached the vital support level of 5600, today it displayed a range bound movement in between the 5500–5550 levels. Owing to weak undertone, Nifty failed to recover and for the second successive day, closed below its 9,14, 50 & 100 day’s SMA placed at 5756, 5776, 5631 & 5689. These levels may act as new resistances in the coming sessions. Chart wise, Nifty is forming higher lows and lower highs, which is a bearish continuation pattern. Owing to wide ranged selling, once again, the bears outnumbered the bulls, which is a weakening trend for market. In today’s session, VIX closed at a little higher value of 21.18%, indicating more volatility in market in the forthcoming sessions. RSI (14) for the session was at 36.15 levels and MACD was below the signal line, thus combined together they are giving the signals that, market may witness range bound movements in coming sessions”.

FAIRWEALTH SECURITIES: “The range for the next session may be 5573-5506 with the support at 5460 and the resistance may be at

5600/5650. Our view is for the day is SELL AT CMP AND EVERY RISE because the market is heading towards the level of 5250 in the coming days. In the next session, Bank Nifty is again expected to trade in the range 10766-11159. Beyond the given range 10550 may act as strong support level and 11291 may be another resistance level”.

KARVY STOCK:  “The market will take cues from the global markets and is expected to open on a flat to positive note tomorrow. Trade short below 5550 level else around 5580 level, with stop loss at 5600, targeting 5520-5500 levels”.

GABA & GABA FINANCIAL ADVISORS PVT LTD (Prakash Gaba): “....‘Technically no sign of strength witnessed as yet and the next logical target on the downside is at 5540-5471’ the market unfolded weak as expected and came close to the psychological 5500 mark and has closed in the red…technically no sign of strength but the market could see some sluggishness in the weakness and may hold ground here. The support for the Nifty is at 5540-5471 and resistance at 5600-5659. The crucial support on the Sensex on the downside is 18464-18257 and resistance at 18858”.

IIFL (Amar Ambani): “The Indian market has been under-performing the world stocks lately amid concern about inflation and interest rates. Though the worst fear on RBI hike has come true there is still no clarity on the impact on the economy and markets. This will take time to play itself out. Even the previous rate hikes may not have fully got transmitted. The fuel price hike being talked about will add to inflation though it will also reduce subsidies to an extent. So, the prudent thing to do right now is to wait for the turmoil to settle down and then take a call on markets”.

MICROSEC SECURITIES: “Yesterday Nifty traded in the band of 5500 and 5580. Now, Nifty is expected to get a strong support near 5480 and there after moving in the range of 5480 and 5760 in the short term. If Nifty breaches 5480, it may further go down to 5375. Traders are advised to maintain a stop loss at 5480 of the long positions. On an intra-day basis Nifty has a support at 5500 and is likely to face a stiff resistance near 5575. If Nifty breaks 5500, it may further go down to 5480 and then 5450. However, if it is able to sustain above 5575, the level of 5620–5660 would become the next target”.

EDELWEISS FINANCIAL ADVISORS: “On the lower side Nifty is likely to face strong support in the vicinity of 5460-5480 level, the level (5500) which consists of the second highest OI (i.e. 44.68 lacs shares) among the Nifty put options. On the other hand on the higher side Nifty is likely to face strong resistance in the vicinity of 5600-5650 level, the level (5600 which consists of the second highest addition in OI (i.e. 48.34 lacs shares) among the Nifty Call Options”. 

RAJATKBOSE.COM (Rajat Bose): “The way the Nifty has moved down, it has broken several crucial levels since the current fall began on April 27 from a level of 5892.35. Now, the case for a pullback rally in some measure would not be too out of place. We should continue to watch the levels between 5525 and 5475—unless this support area gets breached decisively we would not see any further major fall before a pullback. There are two levels to watch out: 5537 and 5575 on the upside. Only when you see the index successfully crossing this barrier, we can expect more upswing or a short-term uptrend”. 
ANGEL BROKING (Daily Outlook): “The trend deciding level for the day is 18,471/5,540 levels. If Nifty trades above this level during the first half-an-hour of trade then we may witness a further rally up to 18,603–18,736/ 5,576–5,615 levels. However, if Nifty trades below 18,471/5,540 levels for the first half-an-hour of trade then it may correct up to 18,338–18,206/5,501–5,464 levels”.

BONANZA ONLINE: “On Wednesday, Nifty closed on a negative note for 7th continuous session, however, it remained in a range throughout the trading day between 5500-5580 levels. Short term trend is bearish as Nifty trades below 5550 level. For Daily Purpose, Trend deciding level is 5550. If Nifty shows strength above 5550 levels, then rally to 5650/5700/5750 levels may be seen. If Nifty does not show strength above 5550 levels then profit booking till 5500/5450/5400 may also be seen”.

NIRMAL BANG: “The markets traded within a tight range amid high volatility and ended marginally in red. The daily chart of Nifty future indicates formation of DOJI which signifies indecision in the market. The markets have corrected almost 6% in seven trading sessions and the RSI on the daily chart is at 36 indicating that the markets have reached the oversold region and quite possible that we could witness a pullback rally emerging around the 5470 levels. Going forward it’s very important for the Nifty to trade above the 5560 level for a positive move to happen. The trend is very weak and the current data suggests that this corrective phase could turn only if nifty holds above 5700. Support for Nifty future at 5490 and Resistance at 5587. Bank Nifty @ 10,938 has corrected more than 10% in past seven trading sessions. Trend is very weak but strong support seen at 10806 levels and fresh sell-off could be seen only if the index trades below this point. Resistance seen at 11020 and stability above could take the index 11300”.

ANGEL BROKING (Mileen Vasudeo): “Markets opened flat and traded with negative bias with choppiness to close in red. On the daily chart we are observing that prices test the upward sloping trendline joining the two significant lows of 17295 and 17469/5177 and 5232. At present the upward sloping trendline holds significance. As long as indices trade above this trendline, a bounce up to 18600–18700/5600–5620 cannot be ruled out. On the other hand if indices breach 18339/5500 level then on the downside indices may test 18250–18140/5450–5420 levels”.

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