Market outlook for 08/02/10

The benchmark Nifty closed the special trading session held by exchanges on a positive note on the back of short covering, because the markets saw deep cuts on Friday following global meltdown on credit default concerns in the Eurozone countries. It shot up over 45 points during the day on the back of buying across all sectors.
The sharp recovery in the US markets in late trade on Friday, which ended flat, also helped the markets in today's trade. There was speculation that European Union may propose a solution for Greece’s budget deficit in a meeting weekend, as according to European Commission forecasts Greece’s debt will increase to 135% of GDP from 113%; Spain’s will increase to 74% from 54%, and Portugal’s public debt will rise to 91% of GDP by 2011 up from 77%.

• Nifty closed the day at 4,757.25 up by 38.60 points. Nifty February Future closed at 4,749.35 discount of 7.90 points.
• FII sold in index option and cash but bought small in stock futures and index futures (Net sold 60.5 Crore)
• US markets closed Flat.
• Global cues are flat to Negative.
• SGX nifty is Negative as of now.
• Most Active February Nifty Call Option: 4800 and 4900.
• Most Active February Nifty Put Options: 4700 and 4600.

Over all view
Supports: 4734 and 4710 is the zone for intra bulls to protect. Though as long 4790 is not taken out decisively, it'll be riskier to buy on dips from 1-2 days positional perspective. Below that 4685-4640 can be the targets before any considerable bounce.
Resistances: 4786/90 is the main hurdle. Any weakness around that zone can be bad news for bulls. Above that the immediate intraday trend can take a small reversal towards discussed level 4825/30-4885-4920/35.

NIFTY Technical
Current Spot: 4757.25
Pivot: 4752
3DEMA: 4776
7DEMA: 4834
21DEMA: 5014
RSI (14 days): 20.97
Supports: 4736 - 4715
Resistance: 4773 - 4789

Target Nifty
Buy Nifty above 4753 - 4769 - 4790 - 4814 SL - 4746
Sell Nifty below 4741 - 4729 - 4706 - 4684 SL - 4750

Stock Ideas for the Day
Reliance Industries: Buy above 993 for targets of 996, 1001, 1007 SL of 990
Reliance Industries: Sell below 989 for targets of 986, 980, 975 SL of 989
Ceat: Buy above 135 for targets of 138, 142 SL of 132 (2-3 Days)
JK Tyre: Buy above 176 for targets of 180, 185 SL of 171 (2-3 Days)
HDIL: Buy above 322 for targets of 328, 335 SL of 318

Positional Call
Adani Power: Buy above 105 for targets of 120 SL of 100 (One Month)
DCW Ltd.: Buy above 20.75 for targets of 23 SL of 20 (One Week)

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

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