Market outlook for 05/02/10

Domestic market closed sharply lower backed by heavy selling pressure over the ground. Stocks slipped into broad decline after swinging up and down, following fall in Europeans stocks and negative closing of most of the Asian stocks. Decline in US index futures ahead of the influential US jobs report Friday also contributed to southward journey. Telecom stocks also led the slide during the trading, as the government came out with an announcement that some new licenses will be delayed. In addition, downfall was also added by IT stocks, which tumbled on reports that US services growth was less than the estimate. Meanwhile, India's food inflation, increased to 17.56 per cent for the week ended 23rd January as compared to 17.4 per cent in the previous week.
Nifty closed the day at 4,845.35 down by 86.50 points. Nifty February Future closed at 4,838.50 discount of 6.85 points.

• FII sold in cash, index futures, and stock futures but bought in index option (Net buy 2.0 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: 4800 and 4900.

Over all view
Market has been sold off again from the critical resistance zone after session of extreme volatility. Though technically it's still holding the 4800 zone, we can say correction is still in course on the upside. But the magnitude of volume with which it has fallen, the corrective uptrend may well be under threat.
Supports: 4800 is the key for this corrective up move to hold. Sustaining below that can bring sell off towards 4760-4730 again. 4730 will the very crucial place to look out. Further break down can bring 4640 and much lower levels lie 4450-4400.
Resistances: 4905/4910 is crucial. Above that 4950 will be the reversal for further targets towards 4990/95-5030-5080/85.

NIFTY Technical
Current Spot: 4845.35
Pivot: 4912.15
3DEMA: 4872
7DEMA: 4907
20DEMA: 5017
RSI (7 days): 31.1
Supports: 4812 - 4779
Resistance: 4899 - 4952

Target Nifty
Buy Nifty above 4859 - 4884 - 4938 - 4969 SL - 4853
Sell Nifty below 4826 - 4805 - 4773 - 4720 SL – 4858

Stock Ideas for the Day
Reliance Industries: Buy above 1029 for targets of 1031, 1045, 1055 SL of 1021
Reliance Industries: Sell below 1014 for targets of 1012, 1002, 988 SL of 1026
Lupin: Buy above 1526 for targets of 1548, 1572 SL of 1490 (2-3 Days)
Triveni Engineering: Buy above 128 for targets of 133, 138 SL of 125
GSPL: Buy above 92.5 for targets of 94.5, 96 SL of 90
Titan: Sell below 1677 for targets of 1665, 1654 SL of 1702

Positional Call
Grasim: Buy above 2635 for targets of 2748 SL of 2603 (One Week)
Hero Honda: Buy above 1601 for targets of 1684 SL of 1573 (One Week)

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