Market outlook for 29/01/10

Indian markets pared most their initial gains and closed marginally above the dotted line. Stocks were ruling volatile as traders rolled over positions in the derivatives segment ahead of the expiry. The key benchmark indices pared gains after hitting fresh intraday highs, as selling emerged at higher level. However, for the first time in this week market has come out from negative territory and gained ground during earlier session on fresh buying by funds, driven by rally on the global bourses. US market had shown sign of recovery and the Asian market are trading in green. The Federal Reserve has decided to hold interest rates at a record low. Meanwhile, India's food price index increased to 17.40 per cent y/y for the week ended 16th Jan.
Nifty closed the day at 4,867.25 up by 14.15 points. Nifty February Future closed at 4885.00, premium of 17.75 points.

• FII sold in index option and cash but bought in index futures and stock futures. (Net sell 745.4 Crore)
• US markets closed in Red.
• Global cues are flat to Negative.
• SGX nifty is Negative as of now.
• Most Active February Nifty Call Option: 4900 and 5000.
• Most Active February Nifty Put Options: 4900 and 4800.

Over all view

• A small bodied candle with long upper and lower shadow showing indecision.
• Lower high lower low continues into the seventh day of declines.
• Volumes were low and Advance Declines was negative.
• Daily oscillators have reached oversold zone and half hourly oscillators are moving up from oversold zone with positive divergence intact.

Trending down inside a channel and continues to trade below 5 DEMA. Unless Nifty closes above 4965 today, carrying longs will not be a good strategy. Risk reward on the upsides are limited with more downsides possibility continues though a sideways trend may ensue for a few days.
A channel break (decisively) can set it up for a relief rally. If not week's Support Level 2 @ 4757 could come.
Resistances on the way up are 4941-5010-5067-5126
Supports on the way down are 4853-4833-4806-4757

NIFTY Technical
Current Spot: 4867.25
Pivot: 4874.00
3DEMA: 4910
7DEMA: 5008
20DEMA: 5107
RSI (7 days): 14.88
Supports: 4818 - 4769
Resistance: 4923 - 4979

Target Nifty
Buy Nifty above 4877 - 4924 - 4979 - 5032 SL - 4865
Sell Nifty below 4865 - 4821 - 4768 - 4713 SL - 4877

Stock Ideas for the Day
Reliance Industries: Buy above 1038 for targets of 1047, 1057, 1068 SL of 1025
Reliance Industries: Sell below 1025 for targets of 1014, 1004, 993 SL of 1038
Aban Offshore: Buy above 1134 for targets of 1141, 1148, 1155 SL of 1125
Maruti: Buy above 1379 for targets of 1400, 1425, 1451 SL of 1339 (2-3 Days)
Gujarat NRE Coke: Buy above 76.45 for targets of 77.2, 78.1, 78.5 SL of 75.35 (1-2 Days)

Positional Call
Sail: Buy above 219 for targets of 252 SL of 209 (One Month)
Binani Cement: Buy above 72.50 for targets of 79 SL of 69 (One Week)

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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