Market outlook for 28/01/10

Indian markets concluded today's downward journey in deep red zone backed by sustained selling over the ground. Stocks exhibited blood bath during the final trading as selling pressure in rate sensitive stocks gathered greater force. Market extended losses to around 3 per cent ahead of Reserve Bank of India's policy meet on 29th January. Asian markets extended Tuesday's sold off and took huge beating in the domestic bourses. Besides, unfavorable European stocks along with lower US index futures also fueled the negative sentiments. The market caught up with a slide in global shares as trade resumed after a holiday. Investors were cautious also ahead of January F&O series expiry. The Nifty closed below 4,900 mark.
Nifty closed the day at 4,853.10 down by 154.80 points. Nifty January Future closed at 4835.00, discount of 18.10 points.

• FII sold in index futures and cash but bought small in index options and stock futures. (Net sell 2961.5 Crore)
• US markets closed in Green.
• Global cues are flat to Positive.
• SGX nifty is Positive as of now.
• Most Active January Nifty Call Option: 4900 and 5000.
• Most Active January Nifty Put Options: 5000 and 4900.

Over all view

• Huge bearish candle on high volumes decisively breaking the uptrend line from July lows.
• Support taken at 61.8% retracement level of rise from 4538 to 5310.
• Daily oscillators have reached oversold levels but no sign of recovering.
• Half hourly oscillators have turned up from oversold zone and given positive divergence.

The trend is now clearly down. We may expect a pullback from present levels as Nifty has reached good support levels and intraday oscillators have started showing positive divergence. Besides, the fall has been for 6 continuous days.
Resistances on the way up are at 4945-5016-5073-5131.
Supports on further fall is at 4806, previous low made on 27th November 2009, 4639 - 200dema, November 2009 low of 4538.

NIFTY Technical
Current Spot: 4853.10
Pivot: 4886.30
3DEMA: 4953
7DEMA: 5055
20DEMA: 5133
RSI (7 days): 11.31
Supports: 4800 - 4747
Resistance: 4940 - 5026

Target Nifty
Buy Nifty above 4885 - 4928 - 5010 - 5059 SL - 4879
Sell Nifty below 4841 - 4802 - 4753 - 4670 SL - 4883

Stock Ideas for the Day
Reliance Industries: Buy above 1044 for targets of 1052, 1061, 1068 SL of 1028
Reliance Industries: Sell below 1028 for targets of 1022, 1016, 1009 SL of 1044
Aban: Buy above 1255 for targets of  1294, 1357, 1405 SL of 1246

Aban: Sell below 1227 for targets of 1189, 1141, 1078 SL of 1252
Unitech: Buy above 73.5 for targets of 76, 81.4, 84.4 SL of 72.9

Know what you own, and know why you own it - Peter Lynch

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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