After nine consecutive days of drubbing, markets finally saw a green day as benchmark indices gained 1.7% on the last trading day of the week. Sensex gained 308 points to close at 18518 while Nifty ended at 5551, up 91 points. BSE mid-cap and small-cap indices gained 0.9% and 0.7% respectively. Rate sensitive sectors, viz Banking and Auto, rejoiced the sharp fall in crude oil. On weekly basis, Sensex and Nifty lost 3.2% and 3.4% respectively.
FIIs were net sellers with the tune of ` 655.34 crore (prov. cash market fig).
VIEWS FROM DIFFERENT BROKING HOUSES:
KOTAK SECURITIES (Sanjeev Zarbade): “Inflation has been the main concern for Indian markets. As a result, the decline in commodity prices on Thursday was greeted by a strong rally in equities on Friday. From the Indian equities standpoint, the strong closing on Friday may keep the sentiment positive as we enter the next week. However, the FIIs are selling. If it is a sign of smart money moving out of commodities and equities, then markets may feel the pressure. We remain positive on banking, media, IT and select capital goods and construction stocks”.
FAIRWEALTH SECURITIES: “In the next session Nifty is expected to trade in the range 5531-5579. If moved beyond the range 5608 and 5628 may act as strong resistance levels while 5511 and 5463 might be the support levels below 5608. As stated in the previous news letters trend of the Nifty is bearish, traders are suggested to follow the strategy of selling at rise.. In the next session, Bank Nifty is again expected to trade in the range 11000-11340. Beyond the given range 10900 may act as strong support level and 11480 may be another resistance level”.
BONANZA ONLINE: “Nifty continued selling pressure for 2nd consecutive week. Short covering may be seen, if Nifty manages to show strength above 5560-5580 zone else selling pressure may resume. Traders should be cautious and trade with strict stop loss. For trading during the coming sessions, trend deciding level is 5560-5580. If Nifty shows strength above 5560-5580 levels then we may see rally to 5650/5750/5825 levels. If Nifty doesn’t sustain above 5560-5580 levels then profit booking till 5450/5350/5260 may also be seen”.
| Duration | Action | Entry Zone (NF) | For Target of | Stop Loss |
For Monday | Buy | 5570-5530 | 5630-5670 | 5500 |
For the Week | Sell | 5700-5725 | 5600-5550 | 5775 |
KARVY STOCK: “The market will take cues from the global markets and is expected to open on a flat to positive note tomorrow. Trade long above 5550 level or else from 5520 level for targets of 5600-5630 levels with a stop loss at 5500”.
ANGEL BROKING (Daily Outlook): “The trend deciding level for the day is 18,453/5,529 levels. If Nifty trades above this level during the first half-an-hour of trade then we may witness a further rally up to 18,634–18,750/5,586–5621 levels. However, if Nifty trades below 18453/5529 levels for the first half-an-hour of trade then it may correct up to 18,338–18,156/5494–5437 levels”.
ICICI SECURITIES: “We expect the Nifty to trade positive if it holds 5500 otherwise it may test lower levels of 5450/5360. Immediate resistance lies at 5580/5630. Bank Nifty is likely to trade in the range of 10600-11400. The index may get the momentum back if Nifty holds 5500 levels”.
GABA & GABA FINANCIAL ADVISORS PVT LTD (Prakash Gaba): “....‘Technically no sign of strength as yet but we may see some support coming in closer to 5402 and Friday could turn into a short covering that’ the market unfolded as expected and truly Friday turned out to be a short covering day…but we are not out of the woods as yet and we need to watch the crucial support of 5500 and trade long. The support for the Nifty is at 5500 and resistance at 5623-5635. The crucial support on the Sensex on the downside is 18250 and resistance at 18748”.
IIFL (Amar Ambani): “Don't get carried away by any short-term spike. Volatility has been high and is likely to stay that way for a while. The good news for India is that crude oil has come off sharply. One has to see whether the Government will go ahead and hike fuel prices next week”.
IIFL (Amar Ambani): “Don't get carried away by any short-term spike. Volatility has been high and is likely to stay that way for a while. The good news for India is that crude oil has come off sharply. One has to see whether the Government will go ahead and hike fuel prices next week”.
MICROSEC SECURITIES: “Technically, Nifty is facing strong support in the band of 5420 and 5370. If it breaches 5370, it may further go down to 5250 in the short term. However, the leading indicators (like Stochastic & RSI) are giving over sold signal of Nifty. So a short term pull back rally is expected to 5770. Traders are advised to initiate long positions with a strict stop loss of 5370. For the coming week, first support of Nifty lies at 5480 and the resistance is 5610. If Nifty breaks 5480, it may further go down to 5420 and then 5370. However, if Nifty is able to sustain above 5610, the level of 5680-5770 would become the next target”.
JRG EQUITY RESEARCH (IndiTrade): “Most of the momentum indicators are in the oversold territory, indicating (atleast slight) chances for recovery in the days ahead. RSI is in the oversold region; and so the Stochastic Oscillators. Commodity Channel index has reversed the downside – but a confirmation of sustained upside is not available yet. The indices being below the major Moving Averages add to the downside risk. The MACD is still in bearish mode. The money flow is also in the negative zone. The first and critical resistance for NSE Nifty for the week to come is seen at 5635, which happens to be the 200-days Exponential Moving Average. Any upside will pan out only if the index manages to hold above this. The upside resistance are expected at 5695, followed by 5760. The trend deciding support for the week to ahead is expected at 5440 The first support for the market will be 5340, followed by the medium-term critical support of 5250”.
MANSUKH BROKING HOUSE: “It seemed like a silver lining on the dark cloud as the Indian equity markets emerged triumphant after ultimately breaking the nine back to back session declining streak, the longest in a decade, and returned back to the path of resurgence. The frontline indices witnessed a relief rally as bears’ rampage was finally brought to a standstill and bulls showcased their enthusiasm on a day when stock markets across the globe exhibited bearish trend. The broad based crash in prices of commodities, especially crude oil, spurred great deal of zeal among local investors, who lately kept taking money off the table session after session on fears of spiralling inflationary pressure. Spot index manages to sustain around this level though we feel sentiments remain shaky in upcoming sessions. Moreover trend line drawn adjoining two significant bottoms 5177 and 5232 , next level of support could be around 5430 level where possibility of bounce back couldn't be rule out. Hence clients are advised to remain cautious and use ‘Buy on Dip’ strategy on any substantial correction. On the flip side such sharp drifts usually encountered by aggressive retracements . In that case 5760-5770 (200 DMA) could be the key resistance zone where we might see some selling pressures. Any closing above this level with substantial volumes may boost the traders sentiment however 5945-5960 could be the next resistance zone”.
INDIRATRADE SECURITIES: “The markets were in consolidation mood this week and interest rate sensitive sectors like banking and realty were the ones that took severe correction. Infrastructure stocks also faced correction. This week Nifty likely to trade in the range between 5750 in the upper side and 5350 in the lower side”.
EDELWEISS FINANCIAL ADVISORS: “The outlook on Nifty continues to be negative as there is no bottoming out formation visible on the daily chart. We will change the outlook to neutral when we see a positive divergence (which would happen if price makes a new low but the RSI makes a higher bottom) on the daily chart and positive only on the resumption of a higher-top higher-bottom formation. However, the pullback, which started on Friday, can extend itself for some more. On the upside, first resistance would come around 5628, which happens to be the 200 day exponential moving average. After that, 5693, the bottom made on 19th April would be the next resistance to watch out for. Traders are advised to lighten commitments in 5628-5693 zone. On the downside, on the breach of 5443, which is the low made during the week, the immediate support would come around 5370, where the trend-line adjoining 4538 and 4675, the bottoms made in November 2009 and February 2010 respectively, present a support, as shown in the weekly chart below. Below, 5370, the benchmark can plunge all the way to 5177, the year 2011 low made on 11th February”.
MANGAL KESHAV SECURITIES: “Last week, Nifty (Spot) begins its fresh down move below 5700 mark and corrected sharply. According to the weekly chart, One can clearly observe Nifty (Spot) trading in a Lower Top Lower Bottom price formation which indicates a long term Down Trend. Nifty (spot) witnessed a strong resistance near 5950 (T3) mark indicates the strength of the chart and possible weakness in days to come. According to Daily chart which provides a short term view indicates that the market is trading in a oversold zone and a technical bounce is due. The sector which was most beaten down could attract short covering and some value buying, BANKING, AUTO, REALITY and INFRA sector could attract some bottom fishing opportunities from its oversold levels. Nifty (Spot) closed above an important levels of 5500 should help Bulls to strengthen further where we could see some stocks specific action in coming week. Market is expected to trade sideways for next week where Nifty (Spot) could hover within a price range of 5500 and 5680 level respectively. Breach of 5480 mark in Nifty (Spot) will negate the earlier given short term Bullish view. In such case, market could witness fresh selling pressure which will drag Nifty (Spot) till the lower band of Diagonal Price Channel support of 5235 level”.
ADITYA BIRLA MONEY (MONEY WEEKLY): “Last week saw the markets being spooked by sharp increase in the Repo rate as the central bank moved away from the baby steps to control inflation and its hawkish tone. 50 bps increase in the savings rate and increase in provisioning requirements also didn’t go down well with the investors. Expectedly, interest rate sensitive like Real Estate, Financials, Auto and Infra took the beating. By the second half of the week, as the global commodities plunged, led by oil, local markets recovered. As the policy makers from China and India to Brazil weighed with the options to increase the interest rates, nervous global investors seemed to be taking money off the table. FII’s pulled out ` 35.bn for the week. There has been growing concern that US recovery could wane as QE II gets over. Next week lot of data is due. China is expected to release CPI. It’s Central bank could take a cue from RBI and take stronger monetary measures to control inflation given that both economies are suffering from high degree of imported inflation. Tighter measures could lead to a further fall in price of commodities, which would be positive for India, given it is a significant net importer of commodities. Short covering could also support the market move. Market is likely to remain positive as long as it remains above 5470. Beyond 5550 it has potential to rally to 5710. With the high inflation and interest rates taking away the pricing power, investors would do well to book profit in the market strength. A sharp increase in fuel price hike by the later half of the week is in offing once the state elections are over. Pranab Mukherji earlier this week went on record to say that if oil prices continue to exert pressure at the existing level it would be difficult for us to manage both inflation and achieve high GDP growth rate”.
PINC RESEARCH: “Last week’s sharp downmove has diluted our positive view of the Nifty in the medium term. The short term technicals however seem to be showing signs of being oversold and hence an impending bounceback is only to be expected. The coming week promises to be exciting affiair as Nifty may attempt a recovery after the thrashing it has received in the last few trading sessions”.
ADITYA BIRLA MONEY (MONEY WEEKLY): “Last week saw the markets being spooked by sharp increase in the Repo rate as the central bank moved away from the baby steps to control inflation and its hawkish tone. 50 bps increase in the savings rate and increase in provisioning requirements also didn’t go down well with the investors. Expectedly, interest rate sensitive like Real Estate, Financials, Auto and Infra took the beating. By the second half of the week, as the global commodities plunged, led by oil, local markets recovered. As the policy makers from China and India to Brazil weighed with the options to increase the interest rates, nervous global investors seemed to be taking money off the table. FII’s pulled out ` 35.bn for the week. There has been growing concern that US recovery could wane as QE II gets over. Next week lot of data is due. China is expected to release CPI. It’s Central bank could take a cue from RBI and take stronger monetary measures to control inflation given that both economies are suffering from high degree of imported inflation. Tighter measures could lead to a further fall in price of commodities, which would be positive for India, given it is a significant net importer of commodities. Short covering could also support the market move. Market is likely to remain positive as long as it remains above 5470. Beyond 5550 it has potential to rally to 5710. With the high inflation and interest rates taking away the pricing power, investors would do well to book profit in the market strength. A sharp increase in fuel price hike by the later half of the week is in offing once the state elections are over. Pranab Mukherji earlier this week went on record to say that if oil prices continue to exert pressure at the existing level it would be difficult for us to manage both inflation and achieve high GDP growth rate”.
PINC RESEARCH: “Last week’s sharp downmove has diluted our positive view of the Nifty in the medium term. The short term technicals however seem to be showing signs of being oversold and hence an impending bounceback is only to be expected. The coming week promises to be exciting affiair as Nifty may attempt a recovery after the thrashing it has received in the last few trading sessions”.
ANGEL BROKING (Mileen Vasudeo): “After a consolidation of nearly four weeks indices have broken down from the price band of 19811 to 18976/5944 to 5693 levels. This fall halted after nine continuous sessions and at present, a relief rally/pullback is underway. In this leg of the short-term up move, Indices may move towards 18940-19130/5680-5735 levels where we expect selling pressure. Traders are advised to stay light on long positions, in view of the probable Head and Shoulder bearish formation”.
RAJATKBOSE.COM (Rajat Bose): “The range of 27 points from 5575 through 5602 would be the initial levels where fresh supply is likely to come and only if it is decisively cleared then start expecting further higher levels; however, the levels between 5626 and 5640 and thereafter between 5670 and 5695 there would be quite a bit of resistance. As of now, the index has not shown as much potential to really get past 5695. In fact, let it cross 5640 in a clear manner. On the downside, we would need to monitor 5510–5482 range very closely for a fall below 5482 now would be rank bad. In case if it happens see whether 5366 helps or not”.
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