Market outlook for 22/01/10

Market nosedived deeply into red today to close sharply lower due to huge selling pressure emerged during second half of trading. Bears gathered bigger force on the major Indian bourses and stocks plunged by sharp margins. The benchmark indices experienced one of its worst session in recent weeks. Heavy selling pressure was witnessed across the board with weak performance of leading Capital Goods Company during the last quarter. Asian stocks were mostly lower amid credit tightening by global economic growth driver China. There were concerns that China’s curbs on bank lending might put at risk on the global economic recovery. Meanwhile, India's food price index rose 16.81 per cent YOY as on Jan 9th.
Nifty closed the day at 5,094.15 down by 127.55 points. Nifty January Future closed at 5,085.00, discount of 9.15 points.

• FII sold in index futures, stock futures and cash but bought in index options. (Net sell 3115.5 Crore)
• US markets closed deep in Red for the second day.
• Global cues are flat to Negative.
• SGX nifty is Negative as of now.
• Most Active January Nifty Call Option: 5300 and 5200.
• Most Active January Nifty Put Options: 5200 and 5100.

Over all view
Review of the fall: 5225 & 5205 was discussed as a most critical support for the resumption of the uptrend. On 20th it broke down 5205 by making a low recorded @ 5195 and retested 5225 (reached 5229) but failed to sustain above. Immediate support discussed for 21st was 5180. Gap down opening created low @ 5183 and retested second pivot zone of 5205 (high made 5207) but again was unable to trade above that, thus creating a shorting point. Today we will first give the positional views.
From positional perspective 5185 and 5235 are biggest hurdles as of now. No Reversal of the new downtrend can be possible below that.
Support: Immediate support lies at 5080 again. Open-low same can bring some chance for intra day longs for 30-40 odd points where as a gap down below that will immediately bring 5026/20-4990 and finally 4970 zone, below that further crack towards the levels given on the above chart.
Resistances: Now we are in zone where resistance are more precious than supports, and that's only because of shorting opportunity. 5105-5135 are such levels as of now. In case we go above that, 5160-5185 will be another shorting band.

NIFTY Technical
Current Spot: 5094.15
Pivot: 5130.85
3DEMA: 5163
7DEMA: 5202
20DEMA: 5194
RSI (7 days): 25.84
Supports: 5049 - 5003
Resistance: 5176 - 5258

Target Nifty
Buy Nifty around 5159 for Targets of 5187, 5215, 5243 SL 5140
Sell Nifty around 5103 for Targets of 5080, 5066, 5046 SL 5140

Stock Ideas for the Day
Reliance Industries: Buy above 1069 for targets of 1078, 1087, 1096 SL of 1050
Reliance Industries: Sell below 1050 for targets of 1043, 1033, 1016 SL of 1069
Dredging Corp of India: Buy above 652 for targets of 666, 680 SL of 640 (1-2 Days)
NMDC: Buy above 498 for targets of 510, 525 SL of 475 (2-3 Days)

Positional Call
Shriram Transport Finance: Buy above 503 for targets of 610 SL of 480 (1 Month)
Archidply Industries: Buy above 40.40 for targets of 45 SL of 38 (1 Week)

Market Timing is a wicked idea. Don’t try it ever - Ellis, Charles D

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

Thanks and Regards

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