Nifty closed at 5,396.75, down by 50.75 points or 0.93 percent over the previous day closing of 5,447.50, after witnessing a low of 5,389.80 and a high of 5,447.50. Sensex closed at 17,985.88, down by 146.36 points or 0.81 percent over the previous day closing of 18,132.24. It touched an intraday low of 17,958.94 and high of 18,155.10.
The markets’ breadth was negative. Out of 2,946 stocks traded, 1,085 stocks advanced, 1,744 stocks declined and 117 stocks remained unchanged. In Sensex, 8 stocks advanced and 22 stocks declined.
FIIs were net sellers with the tune of ` 390.56 crore (prov. cash market fig.)
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VIEWS FROM DIFFERENT BROKING HOUSES:
HDFC SECURITIES: “With the markets sliding lower this week, traders will need to watch if the Nifty can hold above the crucial intermediate trend reversal levels of 5350 in the coming week. A close below 5350 would reverse the intermediate uptrend and could lead to a testing of the long term trend reversal levels of 5177. We recommend a wait and watch approach towards fresh longs till we see signs of strength”.
KOTAK SECURITIES (Sanjeev Zarbade): “For the coming week, there are no major market moving events. Thus, markets may move in line with global cues. By and large global equity sentiment has turned negative since May due to increasing evidence of rising inflation and moderating economic growth in the US and China. We expect markets to consolidate at these levels. Valuations are now reasonable and very much building in a slowdown in corporate profits. We continue to favour IT, private banks, media and FMCG sector. Given the interest rate sensitivity, we remain selective in auto. There are near-term concerns for the Capital Goods/infrastructure sector, but over a longer timeframe, we remain positive on the sector. We remain negative on the cement sector”.
CANARA BANK SECURITIES (CanMoney): “For the next week Indian equities may continue to take cues from world stocks as euro-zone debt crisis haunts global markets. Technically the trend remained muted after Nifty violated critical support of 5,450 on weekly closing basis, thus voiding the medium term uptrend. It has now entered into a non-trending zone which can last between 5,328-5,400. The only positive development which is seen in this correction has been formation of ‘pennant’ in 12 trading sessions. Similar pattern was visible, during the period of 4th-21st March 2011, after which Nifty had a significant rally however this time this could happen if Nifty breaks above 5,450. However if Nifty breaks 5400 level on upside indices may witness a huge short covering”.
FAIRWEALTH SECURITIES: “Next session’s range for the Nifty may be in between 5350-5390, if it breaches the level of 5390 on the upper side then the Nifty can face the resistance at 5421 and the crucial resistance will be 5448 for the day and the support for the Nifty may be at 5330-5335 if it breaks the level of 5350 and the key support may be called at 5267 for the day. Bank Nifty is expected to trade in the range 10535-10735. If sustains below this range it may test 10380 while 10800 might be treated as key resistance level”.
BONANZA ONLINE: “Nifty is still trading in 5325-5600 range for 6 consecutive weeks. Until Nifty decisively breakout or breakdown from the range volatility may be continuing. For trading during the coming sessions, trend deciding level is 5350. If Nifty shows strength above 5350 levels then we may see rally 5420/5470/5550 levels. If Nifty doesn’t sustain above 5350 levels then profit booking till 5300/5225/5175 may also be seen”.
| Duration | Action | Entry Zone (NF) | For Target of | Stop Loss |
| For Monday | Sell | 5420-5440 | 5350/5335 | 5460 |
| For the Week | Sell | 5430-5470 | 5300/5250 | 5500 |
BONANZA PORTFOLIO (Shanu Goel): “With no clear trend emerging from IIP number and monetary policy announcement, market sentiments are likely to be affected by global cues. Market is likely to consolidate in the range of 5,350-5,600”.
KARVY STOCK: “The market will take cues from the global markets and is expected to open on a flat note on Monday. Trade short in Nifty below 5,380 levels else around 5,400, with stop loss placed at 5,420, targeting 5,330-5,300 levels”.
ADITYA BIRLA MONEY (MONEY WEEKLY): “Rising inflation, corporate scams and paralysis in reforms policy continued to be the focus of the street for the week gone by. RBI increased the repo rate by 25 bps to 7.5%, indicating its discomfort with the domestic inflation scenario and its intention to persist with its anti-inflationary stance of monetary policy. This has led to investors staying away from rate sensitive sectors like banking, real estate and auto. The fall in market index was further accentuated by a fall in heavy weight Reliance Industries to an almost 2 yrs low level led by a CAG enquiry for KG-D6 capex by the company. In addition, a coal supply issue has led to drastic fall in stock prices of power finance companies like PFC, REC and IDFC. On the international front, markets were under pressure and commodities has been volatile due to higher probability of a Greece default, slower recovery in the US and fear of a slowdown in China. Overall, there is lot of nervousness in the market and investors are waiting for a positive triggers to break out of the trading band of 5350 - 5500. Once again, we recommend investors to stay confined to quality stocks. Technically, we believe market will take support at 5328 and 5270 and has resistance at 5420 and 5500”.
ICICI SECURITIES: “The Nifty is likely to remain bearish till it surpasses 5420 on the higher side. The immediate support for the index is at 5330/5250. On upsides, 5450/5510 should impose major resistances. The Bank Nifty has also shown volatile movement and saw a sharp decline towards 10700 towards the weekend. Sustainability below 10700 may prompt further downside towards 10500 levels. Important support levels for the Banking index lie around 10700/10200 while resistance can be experienced around 10900/11000”.
GABA & GABA FINANCIAL ADVISORS PVT LTD (Prakash Gaba): “The market unfolded exactly as expected and the market saw our target of 5350 being achieved and the low for the week is 5355. Technically the market is still weak and has not displayed any signs of strength as yet, the bar generated for the week too is a bearish bar and so in all likely hood we should see some lower levels in the days to come...technically a level of 5285 is a possibility... however strong resistance exists around 5470. From a trading point of view I would consider buying only if market takes out the 5470 mark with force...”.
IIFL (Amar Ambani): “The markets remain nervous amid bleak prospects for the global economy in the face of the lingering worries linked to Greece and the euro-zone. Add to that apprehensions regarding a slowing US economy and monetary tightening across emerging markets, and we get a fairly challenging scenario for equities. A big problem for India is that the Government machinery seems to have gone into deep slumber. UPA II needs to get cracking on the policy front to shore up investor sentiment”.
MICROSEC SECURITIES: “After hitting 5604.95 on 3rd June, 2011, Nifty has given a correction of almost 250 points. Now it is facing its crucial support of 5300. If it breaches 5300, the short term trend would become negative and it may further go down to 5120. However a successive move above 5520 would indicate the reversal of current trend and in that case Nifty may test the level of 5610 in the extreme short term. Traders are advised to maintain a strict stop loss at 5300 of all long positions. For the coming week, first support of Nifty lies at 5300 and the resistance is 5450. If Nifty breaks 5300, it may further go down to 5225 and then 5120. However, if Nifty is able to sustain above 5450, the level of 5520-5610 would become the next target”.
INDIRA SECURITIES: “It was not a good week for the markets with both benchmark indices breaching key psychological levels. The picture looked bleak across the board and all major sectoral indices closed in the red. This week Nifty likely to trade in the range between 5550-5600 in the upper side and 5300-5150 in the lower side”.
JRG EQUITY RESEARCH (IndiTrade): “After days of narrow range trading, Indian markets gave way to bears. Even though the chances of short covering pullback is not ruled out, the outlook of the market is seen negative – especially if fails to hold the recent low. The behavior of the volume will add to the concerns – the volume had been low in recovery and is picking up strength in downside; this will turnout to be critical for the time ahead. The technical indicators have once again turned negative – with a number of oscillators reaching out for the oversold region. RSI has fallen considerably and is trading towards the oversold zone. So does Stochastic Oscillator, after registering a bearish crossing. MACD, once again turned bearish, failing at the cut-off mark, pointing towards the depth of the possible sell-off. The decider level for NSE Nifty for the week ahead is expected to be 5325 – the market will possibly intensify the downside further if fails to hold this level. The first support below this is expected at 5265, followed by 5220. The first resistance for the index is expected to be 5480, followed by 5515 – a pullback above the second resistance can be an extreme expectation”.
EDELWEISS FINANCIAL ADVISORS: “In last week's report, we had mentioned that "looking at Friday's close, it is likely that the weakness spills over to next week and Nifty corrects some more". We also said that a correction beyond 5434 would be certainly beyond the comfort level and would reduce the significance of the higher-top made by Nifty earlier and had advised keeping a stop loss of 5434 in trading long positions. On Monday, after touching a low of 5437, Nifty bounced back and extended the gains on Tuesday to touch a high of 5520. However, the benchmark could not sustain these gains and fell sharply over remaining three sessions of the week to finally settle at 5366, losing 2.2% over the week. By not sustaining 5434, the 61.8% retracement level of the 5328-5605 up move, Nifty has shown extreme weakness. The weekly candlestick of this week too portrays a bearish outlook. 5328, the bottom made on 25th May is the immediate support on the downside. However, there are chances that Nifty might not hold even this level and in that case the next support to watch out for would be around 5220, emanating from adjoining 4675 and 4786, the bottoms made in February and May 2010 respectively, as shown in the weekly chart below. On the upside, 5457, the 61.8% retracement level of the 5520-5356 fall would serve as the key immediate resistance. Traders are advised not to catch falling knife and wait for the completion of higher-top higher-bottom formation on daily chart before taking fresh long positions. Those who want to go short can do so with a stop-loss of 5457 on closing basis”.
PADMAKSHI FINANCIAL SERVICES (Kusal Kansara): “We believe that the Sensex could test the lows of 17,786, below which Sensex could head to 17,295. Defensive stocks like HLL, Dabur and Marico will continue to outperform the broader market. Downward pressure will be seen in IT and Oil & Gas”.
SWASTIKA INVESTMENT: “On weekly charts, a Black Candle is formed with a real body having a higher upper shadow and a negligible lower shadow indicating selling pressure for the whole week. The candle is formed at the major support level wn by the up sloping trend line. Now, if the index remains decisively below the levels of 5350/5328 then the downside rally will continue. The momentum indicators RSI, MACD are indicating weakness for the equity benchmark. In the coming week, there are no major market moving events. Thus, markets may move in line with global cues. Although, market has been drifting down but it could happen that it may attempt pullbacks but generally that aside, it looks like the drift is on the way down. For this week, the support for the Nifty is seen at 5300/5250, while on the upside it can face resistance at 5470/5580 levels”.
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