"MARKET OUTLOOK & TRADING IDEA FOR MONDAY (19.127.2011)"

At the close, The 30-share index, Sensex plunged 722.11 points, or 4.45%, to 15,491.35 for the week ended Dec. 16, 2011. On the other hand, the broad based NSE Nifty dropped 215.10 points, or 4.42%, to 4,651.6 in the same period.
VIEWS FROM DIFFERENT BROKING HOUSES:
HDFC SECURITIES: “With the markets continuing to trade with a weak bias and the Nifty moving below its previous lows of 4639, the downtrend looks set to continue. Immediate downside supports to watch are now at 4539”.
KOTAK SECURITIES (Sanjeev Zarbade): “For the week, Sensex closed down 4.5%, while it has been a week of losses for global equities (between 1.5-2.5%), the Indian equities underperformed the global markets. For the coming week, there are no major events lined up. Focus would shift to upcoming results season”.

CANARA BANK SECURITIES (CanMoney): “Technically, after exhibiting significant losses in last session, Nifty witnessed a very volatile & choppy session and despite displaying an excellent recovery, closed with deep cuts. Level wise, closing below the vital 4700 levels may depict strength of the bears in the forthcoming sessions. Broader market witnessed weak sentiments, segments, like large- caps, small-cap, mid-cap were under sellers’ grip. Owing to this, bears outnumbered the bulls with significant margin. Due to selling Nifty continued to close below its vital 9, 14, 50 & 100 day’s SMA placed at 4849, 4865, 4997 & 5063. VIX, the barometer of uncertainty, closed at a higher level of 29+ and indicates a more than average volatility in market in the forthcoming sessions. RSI (14) for the session was at 34.85 levels and MACD closed below the signal line. Market may continue to witness some range bound weak movements in forthcoming session amidst higher volatility”.

BONANZA ONLINE: “Nifty showed selling pressure for second consecutive week and made long black candlestick pattern on weekly charts. Nifty closed below support in 4680-4725 levels. Sentiment may remain weak below 4700 levels and selling pressure may be seen. If Nifty manages to maintain above 4700 levels then recovery may also be seen. For trading during the coming sessions, trend deciding level is 4650. If Nifty shows strength above 4650 levels then we may see rally 4725/4800/4880/4950-5000. If Nifty doesn’t sustain above 4650 levels then selling pressure till 4570/4525/4450 may also be seen”.

Duration	Action	Entry Zone (NF)	For Target of	Stop Loss
For Monday	Buy	4580-4600	4660	4550
For the Week	Buy	4550-4600	4685-4730	4850

BONANZA PORTFOLIO (Shanu Goel): “The sentiments have changed for the worst. The medium to short term trend has definitely turned bearish. However after a huge fall of almost 200 points in a single day and almost 460 points in 7 trading days, some bounce back can be expected in next couple of days. Nifty is likely to consolidate within 4500-5000 range in medium term”.
KARVY STOCK:  “The market will take cues from the global markets and is expected to open on a flat to positive note on Monday. Trade short in Nifty at 4,680 levels with stoploss placed at 4,700 for targets of 4,650-4,630 levels. Alternatively, trade long in Nifty above 4,700 levels with a stoploss at 4,680 levels for targets of 4,750 levels”.

GEOJIT BNP PARIBAS FINANCIAL SERVICES (Alex Mathews): “Outlook for the Nifty remains cautious and weak as it closed below 4700 and Nifty has resistance at 4725 and 4790 while the support is there at 4600 and 4565 levels. On the sectoral front, we saw heavy offloading in capital goods, realty, banking, power and metal stocks. As rupee recovered today, we saw minor selling in IT stocks”.

ADITYA BIRLA MONEY (MONEY WEEKLY): “The market continued to be under selling pressure, with the benchmark NIFTY index down 4.5% for the week. The selling was led by continuing apprehension of investors regarding domestic macro issues. The rupee continued to slide against the dollar, falling 1.4% for the week and 15.3% YTD. This is likely to result in exacerbating the (1) worsening fiscal deficit through higher subsidies in fuel, fertilizer and food, (2) mark-to-market losses for companies with high foreign currency borrowings and (3) operating margins of companies through higher raw material costs. The marked fall of 5.1% in October IIP numbers was quite higher-than-market expectations, indicating a severe slowdown in capital goods, manufacturing and consumer durables and the high probability of GDP growth slowing to sub 7% in both FY12 and FY13. The reliability of economic data provided by Government institutions also came into question, with the government admitting that exports were overstated by ~$9bn during April-October’11. Even the dovish statement by the RBI in its credit policy that the monetary policy stance is likely to reverse, responding to risks to growth, failed to check the negative sentiment. Sectorally, cyclical came under severe pressure and the defensives outperformed. Capital goods, realty, banks and metals were down 10.3%, 8.2%, 7.2% and 7.1% respectively while FMCG and technology were only down 0.7% and 1.7%. Going ahead, markets could continue to remain under pressure due to unwinding of funds and the bear cartel taking advantage of weak sentiments. We continue to advise employing a defensive trading/investment strategy, buying companies with good management and low debt on declines”.

ICICI SECURITIES: “The Nifty may continue to trade in a jittery manner amid high volatility. Continuous addition of open interest in banking and capital goods stocks may spell further weakness for the Nifty. On the higher side, the 4750-4830 zone should act as a stiff resistance zone in the near term. Banking stocks underperformed the Nifty and were the major laggards. Heavyweights from both public and private sector stocks observed intense selling pressure. Moreover, open interest in banking heavyweights is significantly high and the bias has largely remained on the short side. The index is likely to find immediate resistance at 8500/8650 while immediate support can be experienced at 7950/7600 levels”.

SMC TRADEONLINE (WISE MONEY): “Domestic indices remained highly volatile last week. The week began on the negative note and managed to close above 4700 levels. Technically Nifty failed to sustain above the 50-day SMA and further declined below the short-term moving averages. Meanwhile, global factors will continue to play an influential role. The put-call ratio of open interest dropped throughout the week to close at 1.00 which indicates weakness. Currently, the highest concentration of open interest in December series is at the 4700-strike put option, with open interest of more than 90 lakh shares. The 5100-strike call has an open interest of above 80 lakh shares, the highest among call options. It is closely followed by the 5200 strike, with open interest of more than 60 lakh shares .The Implied Volatility (IV) of call options closed at 26.47% for the week, whereas it was 27.55% for puts. The market is expected to remain in the broad range of 4700-5000 in the near term. If Index manages to close above the 4800 mark, it could gradually inch up towards 4900-4950 levels on the back of short-covering and fresh buying. Alternatively a failure to sustain above the 4700 mark will induce further selling pressure, thereby dragging Nifty down immediately to lower supports of 4500 levels in due course”.

GABA & GABA FINANCIAL ADVISORS PVT LTD (Prakash Gaba): “Technically the market has not displayed any sign of strength so far and has traded in a typical bearish mode and can slide down to its next logical target of 4400 in the days to come...the market is stretched on short term time frames and so volatility and short up moves to strong resistance zones of 4850 is not ruled out either. Technically it looks weak with strong resistance around 4750 and lower levels remaining open… The support for the Nifty is at 4520 and resistance at 4750. From trading point of view, I would short all rallies until 4850”.

ANGEL BROKING (Technical): “Our benchmark indices opened marginally higher this week, but strong selling pressure at the higher level dragged indices to close near a new 52-week low. Going forward, if indices break Friday's low of 4628, then they are likely to test the 15330/4540 level, which also coincides with a ‘Downward Sloping Trend Line’, joining two lows of 15760-15479/4728-4639. Moreover, if indices sustain below the 15330/4540 level, then the possibility of testing the monthly 50% Fibonacci retracement level of the rise from 7697/2252 (October 31, 2008) to 21108/6338 (November 30, 2010) cannot be ruled out. This retracement level is at 14400/4300. On the upside, indices may face strong resistance near the 16142/4841 level”.

MICROSEC SECURITIES: “The daily chart of Nifty is showing that it has broken its short term crucial support of 4700 on last Friday. Now it is likely to hold 4530. If Nifty breaches 4530, it may further go down to 4440 in the extreme short term. However, a breach of 4920 would indicate a reversal of current trend and in that case Nifty may test the level of 5110. For the coming week, first support of Nifty is at 4590 and the resistance is 4725. If Nifty breaks 4590, it may further go down to 4530 and then 4440. However, if Nifty is able to sustain above 4725, the level of 4815-4920 would become the next target”.

INDIRATRADE SECURITIES: “Negativity prevailed across all sectors during the week and both benchmark indices and all sectoral indices closed with significant losses. Capital goods, realty and metal were the biggest losers and auto and power, too, contributed in the negativity. For the next week, Nifty likely to trade in the range between 4770-4830 in the upper side and 4500-4400 in the lower side”.

JRG EQUITY RESEARCH (IndiTrade): “The Indian market indices have crashed nearly 27% from the 2-year highs. In the last week, they have tested a major longer term support level – but failed to break it. Technically this level will act critical for the week ahead also for further direction. For NSE Nifty, this comes around 4620 and for BSE Sensex it will be 15400 – a convincing close below this can be drastic for the medium-term. The technical indicators still remain unimpressive. MACD has turned negative with dropping momentum, which can be a concern for the market. Stochastic Oscillator and RSI have retraced towards the oversold region – but any recovery is not expected to pickup energy at higher levels, if the above mentioned support level is broken (on a closing basis). The critical level for NSE Nifty for the upcoming week is expected at 4620 (on a closing basis). A failure below this can potentially pull the index down towards the first support of 4460. The short-term lower support will be 4210, which is not impossible with the coming few weeks. On upside, the first resistance for the week ahead is expected at 4820, followed by 4920”.

SWASTIKA INVESTMART: “Next week Market will dominate by developments in European Union nations besides Volatility in the dollar, foreign Institutional activity and political uncertainty will remain a cause of concern”.

UNICON WEEKLY: “The markets both globally and locally seem to be finally giving up hope and the signs are ominous. Global problems remain and there does not seem to be any solution in sight. Technically Nifty on weekly chart has formed bearish candle stick pattern, which shows negative sentiment on weekly closing basis. Oscillators like RSI is showing negative crossover in weekly chart, which shows resistance are good for selling opportunity. Nifty closed below the 20 day moving average (4840) indicating the short term trend could be turning negative. Short term stochastics are showing negative sentiment till support levels at 4400-4300. The market setup is somewhat negative with trading range between 4700-5100 on weekly basis.  The next area of resistance is around at 5050-5175. So Nifty appears to be negative on weekly chart and trading range at 4300-4840 levels. If Nifty trades above short term 4850, it may take resistance at 4900-4935. Weekly Nifty has resistance at 4750-4840 and supports at 4400-4300. Weekly Sensex has resistance at 15800-16150 and supports at 15000-14560. Weekly Bank Nifty has resistance at 8400-8700 and supports at 7855-7610”.

R K GLOBAL: “In the next week, we expect the indices to remain choppy amidst global volatility. The European condition is still not stable as its banks are getting downgraded by the credit rating agencies every other day. Moreover, France stands to lose its AAA status as Fitch warned for a possible rating review. So, given these negative outlook, we expect our domestic indices to follow suit. However, there are slight chances of a reversal as the indices have lost considerably so some buying may happen at these levels as most of the stocks are trading at their 52-week lows”.

MAGNUM RESEARCH: “On the Nifty, 4800 levels on closing basis will continue to be the Major Resistance. If we cross this, 4930 levels would become the next logical move. On the downside, we may witness a strong support near 4650 levels but closing below this level for consecutive two or more session may trigger another downfall till 4500 mark”.

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