FIIs were net buyers with the tune of ` 445.26 crore (prov. cash market fig.)
The BSE Sensex was down 117.70 points or 0.54% to 18,376.48, its lowest closing level since 30 May 2011. The Sensex rose 178.47 points at the day's high of 18,672.65 in morning trade, its highest level since 13 May 2011. The index lost 148.33 points at the day's low of 18,345.85 in late trade. The S&P CNX Nifty was down 33.60 points or 0.61% to 5,516.75, its lowest closing level since 30 May 2011. The Nifty hit a high of 5,604.95 in intraday trade, its highest level since 13 May 2011. The Nifty hit a low of 5,507.20 in intraday trade.
The market breadth, indicating the health of the market, was negative. On BSE, 1,502 shares declined while 1,308 shares advanced. A total of 123 shares remained unchanged. The breadth was strong earlier in the day. Among the 30-member Sensex pack, 22 stocks declined while rest of them gained.
BSE clocked turnover of ` 2543 crore, lower than ` 2887.69 crore on Thursday, 2 June 2011.
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VIEWS FROM DIFFERENT BROKING HOUSES:
KOTAK SECURITIES (Sanjeev Zarbade): “The Indian markets are likely to remain range-bound in the next few days. The economic data has been indicative of a moderation in growth. Inflation has also been resilient and the RBI may affect a further rate hike at its policy meeting in June. On the positive side, valuations are reasonable and monsoons also seem to be largely on track. Our preferred sectors are IT, banking, metals and media. We remain moderately positive on Construction, Capital Goods and Auto. We are negative on Cement. Earnings of listed Indian companies grew at the slowest pace in the past three quarters as rising input costs eroded profit margins even as sales remained buoyant. The slow-down was led by SBI (higher loan-loss provision) and ONGC (higher subsidy burden)”.
CANARA BANK SECURITIES (CanMoney): “Technically, Nifty witnessed an interesting session, today, wherein our indices witnessed a firm upward movement at starting that ended on a weak note, mainly due to profit booking. After last sessions’ dull closing, Nifty witnessed a positive opening and breached upper sentimental resistance level of 5600. But on account of profit booking at higher levels, Nifty gave up all the gains and breached the vital support of 5560 and 5520. This may strengthen the bears, in the forthcoming sessions. For the second straight session, Nifty closed below its 9 day’s & 14 day’s SMA placed at 5481 & 5463. At the end, nifty closed below its 50 and 100 day’s SMA placed at 5645 & 5578. These levels may act as new ranges in the coming sessions. Owing to profit booking in large cap, mid-cap & small-cap space, for the first time in last four sessions, market breadth turned into red. In today’s session, VIX closed at a little higher level of 17.61%, indicating higher than average volatility in market in the forthcoming sessions. RSI (14) for the session was at 48.59 levels and MACD was above the signal line, thus combined together they are giving the signals that, market may witness some range bound movements in coming sessions”.
FAIRWEALTH SECURITIES: “Next session’s range of Nifty may be 5501-5552 and it may resist at 5573 and 5592.The support may be at 5473 and 5444 if it breached the level of 5501. In the next session Bank Nifty may trade in the range 10730-11860. If crossed this range it may test 10960and 11210. However, 10660 and 10580 may act as strong support levels in Bank Nifty”.
BONANZA ONLINE: “Nifty is weak in near-to-medium term as it is trading below 50-DMA of 5572 and 200-DMA of 5609. Profit booking near resistance levels may be seen in coming week. For trading during the coming sessions, trend deciding level is 5610. If Nifty shows strength above 5610 levels then we may see rally to 5650/5710/5750 levels. If Nifty doesn’t sustain above 5610 levels then profit booking till 5400/5350/5300 may also be seen”.
| Duration | Action | Entry Zone (NF) | For Target of | Stop Loss |
| For Monday | Buy | 5440-5430 | 5480/5500 | 5400 |
| For the Week | Buy | 5400-5440 | 5500/5560/5620 | 5660 |
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 in Nifty form current levels or else from 5560 levels targeting 5500-5450 levels, with stop loss placed above 5580 levels”.
ADITYA BIRLA MONEY (MONEY WEEKLY): “We have seen rebound in the Indices led by good progress of monsoon and weaker data points from the west suggesting slow recovery there. The 10-year domestic bond yield cooled off after hitting a high of ~8.5%. FII turned positive and bought to the tune of Rs.40bn over the last seven sessions. US bonds rallied pulling down the yields to 2.97% from a high of 3.5% six weeks back implying lower than expected recovery and therefore the exodus of short term capital towards emerging markets. This also suggests a cool-off in commodities, which could possibly moderate domestic inflation a bit, and could assuage the ensuing steep monetary tightening. FMCG and Pharma led the rally. Auto, especially 4-wheelers, was a loser with slow down apparent in the month of May coupled with some disappointment in quarterly results. The Government is meeting next week to decide on the quantum of diesel price hike and could possibly introduce specific duty on diesel passenger cars. The policy inaction from the Government and the probable future charge sheets and more revelations on account of 2G probe will continue to keep the market at bay and a decisive break out of 5600 levels looks tough. Pharma, we believe, is likely to outperform over the next two quarters on account of non-cyclicality and good volume growth registered by the sector. Technically, market is likely to find support at 5450 & 5420 levels and would face resistance at 5550 & 5640 levels”.
ICICI SECURITIES: “The Nifty is likely to remain range bound. The immediate support for the index lies at 5480/5420. On upsides, 5610/5750 should provide major resistances. Bank Nifty showed volatile movement and after surpassing 11,000 it fell sharply towards 10,700. We expect the index to remain volatile in the range of 10500-11000. Important support levels for the Banking index lie around 10700/10500 while resistance can be experienced around 10900/11200”.
PINC RESEARCH: “The penultimate and the last day of the previous week may have subdued the strong optimism. There has been a strong rally from the lows of 5330 to high of 5600 and it should only be natural to anticipate few days of pullback. Also the level of 5600 coincides with the 200 DEMA. Hence, such pull back should be construed as healthy as long as key supports on the downside are held. In the short term, we may be undergoing such a phase and post this ,there is a high probability for the Nifty to breach the level of 5600 in the coming weeks. A decisive breach of 5600 level should clear the way for further advance till 5750. Earlier, we had highlighted the following points to support an impending up-move and a possible trend reversal for the Nifty. 1) Pace of rallies is faster than the pace of declines indicating a shift of sentiment. 2) Accumulation pattern which are now becoming evident in the short term. 3) Oversold technical indicators which are now exhibiting positive divergence. 4) Weekly candlestick chart showed a “Dragon Fly Doji” which is a bullish reversal pattern. A good closing for the last week has confirmed this reversal pattern. These factors reaffirm our bullish view in the medium term. Target on the upside should be near the area of 200 Day SMA which comes to around 5750. Moreover, the 200 Day EMA is at 5600 and this level is acting as the logical resistance for the trend”.
GABA & GABA FINANCIAL ADVISORS PVT LTD (Prakash Gaba): “As expected Nifty found resistance near the 5600 zones and profit booking came in...I would like to consider the market as tired unless 5600 get taken out with force. The support for the Nifty is at 5495-5463 and resistance at 5600. Technically the bar generated for the week is suggestive of a flat market ahead and can be considered up as long as 5450 holds but the market certainly cannot be considered as up until it takes out 5600 with force. From a trading point of view I would trade long as long as 5450 holds. The crucial support on the Sensex on the downside is 18334-18229 and resistance at 18700”.
IIFL (Amar Ambani): “We’ve had some relief on FII flows. Hopefully, the current trend of a gradual upward move will continue in the near term. But, the macro-economic backdrop remains challenging as has been underscored by the GDP data and other reports. Other area of concern is the muted trading volumes. RBI mid-quarter review on June 16, EGoM on fuel prices on June 9, April IIP data on June 10 and May inflation on June 14 would be the important events that could have a bearing on the direction of the markets in the coming days”.
MICROSEC SECURITIES: “After making a low of 5328.70 on 25th May, 2011, Nifty has gained almost 5.20% in a time span of seven days. Now it is facing a crucial resistance near 5610. If Nifty is able to maintain above 5610, an upward rally might carry it to 5760 in the extreme short term. However a breach of 5440 would indicate the end of current rally and in that case Nifty may further go down and take support near 5300. Traders are advised to maintain a strict stop loss at 5440 of the long positions. For the coming week, first support of Nifty lies at 5440 and the resistance is 5610. If Nifty breaks 5440, it may further go down to 5370 and then 5300. However, if Nifty is able to sustain above 5610, the level of 5680-5760 would become the next target”.
INDIRA SECURITIES: “The markets made moderate gains this week with realty and banking providing support to the indices. Oil & gas and metals closed with moderate losses while auto also took a beating. This week Nifty likely to trade in the range between 5700 in the upper side and 5300 in the lower side”.
JRG EQUITY RESEARCH (IndiTrade): “The market can potentially reverse the trend and can extend the downside further IF fails to sustain above the last day's high. In fact, the current selling happened from a major technical point – the 200-days Exponential Moving Average. This, along with the last day's price pattern, will possibly weigh too much upon any efforts of upside in the days to come. The RSI has bounced back from the oversold to the overbought region. Stochastic Oscillators also followed the same pattern and is in the overbought territory – but any reversal is not confirmed yet. MACD, however, is still with the optimists. Considering all these, the short-term orientation for the market is seen towards the downside. The critical support for NSE Nifty is understood to be 5465 – a failure to sustain above this can intensify the downward momentum. The first support below this is expected to be 5390, followed by 5325 – a fall below the lower support will potentially trigger the next round 'short-term' sell off in the market. The market will make any commendable recovery only of Nifty manages to break and close above the first resistance level of 5635. The upside resistance in such a scenario will be 5715”.
EDELWEISS FINANCIAL ADVISORS: “The hammer pattern did yield desired result as Nifty rose to touch a high of 5605 during the week, where it got resisted by 200 day EMA and fell sharply to end the week at 5516, gaining 0.74% week-on-week. By taking out the immediate previous top of 5518, Nifty has fulfilled the first requirement of a higher-top higher-bottom formation. Now the benchmark is possibly in the process of making a higher bottom. For this requirement to get fulfilled, the ideal situation would be that Nifty corrects at least 38.2% and does not correct more than 61.8% of the previous up move. The 38.2% and 61.8% retracement levels of the 5328-5605 up move are placed at 5499 and 5434 respectively. So what we would like to see is that Nifty falls at least till 5499 but resumes the upward journey before breaching 5434 and subsequently takes out 5605 to complete the higher-top higher-bottom formation. If that happen, we would be looking out for nothing less than 5800 as the target where the trend line adjoining 6338 and 6181, the tops made in November 2010 and January 2011 respectively, presents a stiff resistance as shown in the weekly chart below. On the downside, as mentioned above, 5434 is the level around which the fall should get halted. Next support will come around 5350, emanating from the trend line adjoining 4786 and 5177, the bottoms made in May 2010 and February 2011 respectively. Those who want to bottom fish can buy around current levels with a stop loss of 5434 on closing basis. Others can wait for the crossover of 5605 on the upside for taking fresh long positions”.
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