Market outlook for 01/02/10

Indian markets managed to conclude the friday's trading marginally above the previous session's closing on fresh buying emerged during final trading hour. Strong rebound was led by buying at lower level. Firm European stocks and higher US index futures also contributed to the recovery on the domestic bourses. The market improved after shedding its early losses as the central bank raised the FY10 GDP forecast, to a much stronger 7.5 per cent from 6 per cent. However, earlier stocks were trading with losses since initial bell and fell sharply on more than expected CRR hike. The RBI has increased CRR by 75 bps to 5.75 per cent, whereas key interest rates were unchanged in its third quarter review of Annual Monetary Policy. Benchmark indices lost also on sustained selling over the counters led by negative Asian markets.
Nifty closed the day at 4,882.05 up by 14.80 points. Nifty February Future closed at 4886.75, premium of 4.70 points.

1. FII sold in index futures, stock futures and cash but bought in index options. (Net sell 505.9 Crore)
2. US markets closed in Red despite better then expected GDP data.
3. Global cues are flat to Negative.
4. SGX nifty is Negative as of now.
5. Most Active February Nifty Call Option: 4900 and 5000.
6. Most Active February Nifty Put Options: 4800 and 4700.

Overall View
Nifty reversed from the well discussed zone of 4760-4730 by hitting a low of 4757 on the last session. Nifty still in a downtrend, but a correction against a 550 points fall can also lead towards a healthy upmove.
Supports: Supports for the day lies at 4865 and 4845, reversal from 4757 is having pivot on those place. Intra bulls will try to hold that. A confirmed break below 4820 will bring more weakness and it may head towards 4760-4730 again.
Resistances: 4896/4900 is immediate. 4938 will be pivotal for the day for an immediate breakout towards 4975/80-5010/15.

NIFTY Technical

Current Spot: 4882.05
Pivot: 4847.25
3DEMA: 4896
7DEMA: 4977
20DEMA: 5086
RSI (7 days): 18.87
Supports: 4800 - 4720
Resistance: 4929 - 4975

Target Nifty
Buy Nifty above 4879 - 4922 - 4971 - 5054 SL - 4839
Sell Nifty below 4834 - 4795 - 4712 - 4663 SL - 4844

Option & Futures Call
Buy Nifty 4700CE at 245 for targets of 261, 285, 302 SL 221

Stock Ideas for the Day

Reliance Industries has a solid support at the levels of Rs 1,020 and till the time it can sustain above this level we can say that there is scope of hope. Thus if the bounce back occurs it can take the stock to the levels of Rs 1,070-Rs 1,085. If Rs 1020 level is broken than it can fall to the level of Rs 990 in the near-term. It is likely that stock will remain range bound in medium-term range between Rs 1,200 and Rs 850.
The trend in the stock is down and can fall to the levels of Rs 900-860 sooner or later.

Reliance Industries: Buy above 1047 for targets of 1054, 1061, 1072 SL of 1038
Reliance Industries: Sell below 1038 for targets of 1031, 1024, 1005 SL of 1047
Sree Renuka Sugar: Buy above 204 for targets of 210, 216 SL of 198 (2-3 Days)
Aban Offshore: Buy above 1210 for targets of 1250, 1295 SL of 1165 (2-3 Days)
SBI: Buy above 2065 for targets of 2095, 2135 SL of 2020 (2-3 Days)

Positional Call
Hanung Toys: Buy above 117 for targets of 137 SL of 109 (One Month)
Mukund Ltd.: Buy above 56.50 for targets of 61 SL of 53 (One Week)

My basic advise is don't lose money - Jim Rogers

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

Thanks and Regards

S&P Wealth Creators

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