Market outlook for 06/01/10

The Indian market rallied sharply during the trading and ended on positive zone for the second straight day led by significant buying over the ground. Market surged tracking strong cues from most of the Asian stocks. Growth in Chinese manufacturing by the biggest margin in five years in December, also aided to the upsurge in the domestic bourses. Comments from Finance Ministry’s Chief Economic Advisor (CEA) Kaushik Basu that the Indian economy can notch up a 10 per cent growth rate in the next few years also boosted the sentiments. However, stocks pared gains in afternoon trade backed by subdued European markets, before regaining strength later. Nifty ultimately closed day at 5,277.90 up by 45.7 points. Nifty January Future closed at 5,277.00, discount of 0.90 points.

• FII bought in index futures, index options and cash but sold small in stock futures (Net Buy 3177.5 Crore)
• US markets closed just Flat.
• Global cues are flat to Positive.
• SGX nifty is flat to Positive as of now.
• Most Active January Nifty Call Option: 5300 and 5400.
• Most Active January Nifty Put Options: 5200 and 5100.

Over all view: Yesterday Nifty opened gap up and closed at “DOJI” which suggest uncertainty at higher level but no sign of bearishness, some amount of consolidation cannot be ruled out. Daily RSI and MACD are still in bullish mode where as stochastic is hovering in over bought region. Nifty 30 Minutes chart has formed “High wave” pattern which suggest some amount of supply at higher level. Over all technically scenario is bullish and buying on dips work well as long as Nifty survives 5187 level on closing basis.
Supports: Immediate support lies at 5272-5260, sustaining below that, can target further downside towards 5250-5225, 5220 can emerge as a potential buying zone, in case immediate support breaks.
Resistances: 5295 is clearly the immediate one. Above that most awaited 5333/40 zone will emerge which can very well be potential profit booking and shorting zone with strict s/l above 5355.

NIFTY Technical
Current Spot: 5277.90
Pivot: 5275
3DEMA: 5242
7DEMA: 5193
20DEMA: 5124
RSI (7 days): 76.97
Supports: 5262 - 5246
Resistance: 5291 - 5304

Target Nifty
Buy Nifty above 5277 - 5285 - 5296 - 5304 SL - 5242
Sell Nifty below 5242 - 5234 - 5226 - 5215 SL - 5277

Stock Ideas for the Day
Reliance Industries: Buy above 1072 for targets of 1081, 1095, 1106 SL of 1056
Reliance Industries: Sell below 1056 for targets of 1047, 1040, 1031 SL of 1072
Tata Chemicals: Buy above 330 for targets of 340, 352 SL of 318 (1-2 Days)
Indian Hotel: Buy above 105 for targets of 109, 113 SL of 101 (1-2 Days)
Gujarat NRE Coke: Buy above 92.3 for targets of 94, 96 SL of 90 (1-2 Days)
GMR Infra: Buy above 67.8 for targets of 70, 73 SL of 67 (1-2 Days)

Positional Call
Dena Bank: Buy above 84.75 for targets of 97 SL of 78 (1 Month)
Arvind: Buy above 39.6 for targets of 45 SL of 36 (1 Week)

Stocks are bought on expectations, not facts - Gerald M. Loeb

Use strict STOP LOSS in each and every trade in this kind of volatile market and Trade at your own risk.

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S&P Wealth Creators

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