Markets traded with a negative bias in the week gone by and closed in red on weekly basis, breaking a 3 week winning streak. Benchmark indices, on all the five sessions of the week, could not cross previous sessions' high and broke previous session's low as shown in the chart below, clearly indicating dominance of bears. Nifty, in fact, briefly broke the last week's low of 5353 by touching an intraday low of 5349 on Friday and finally settled at 5367.6, down 1.5% week-on-week.
The European shares fell on Friday (July 30, 2010) for the third straight day with construction shares among the top losers, as concerns over the US economic growth and downbeat comments from a Federal Reserve official hurt market sentiment. All the major Asian indices closed in the negative territory on Friday. SGX Nifty closed 68 points lower on Friday. As indicated day before yesterday, US markets recover its early loss and closed flat.
The Indian markets posted a weekly decline after gaining over the past three weeks. The results from the index heavyweights like Hero Honda Motors and Oil & Natural Gas Corporation were not so inspiring enough to lift the markets. The benchmark indices - the Sensex and the Nifty - were struggling to stay above their crucial levels of 18000 and 5400 respectively. The Nifty closed at 5368, 41 points down.
Indian market seems to have hit a soft patch after a really good June, with the key indices struggling to break above the current range. Disappointing earnings from a few bellwethers have not been of any help even as uncertainty prevails over the state of the global economy. Even the fact that food inflation has dipped below 10% and that monsoon deficit has shrunk failed to offset jitters linked to corporate results. Bulls are hoping that August turns out to be better than July.
Data on manufacturing PMI from across the globe will be announced today as we step into a new month. Over the next few days, key domestic data points of importance will be those on Trade, IIP and Monthly Inflation. The first day of August will also see Auto and Cement companies come out with their monthly volumes. Monsoon has been pretty good and the forecast is also positive. So, all eyes will be on inflation data not just for the month but also weekly.
Results will of course continue to pour in as the time to declare quarterly financial statements has been extended to 45 days. Any further disappointment on this front will keep a lid on stock gains. On the whole, we expect the market to remain in a range but with a positive bias. The NSE Nifty could cross 5500 shortly provided global markets are supportive. It may even rise beyond that but some pressure is bound to be there at higher levels. So, trade wisely and don't take aggressive bets.
Stock-specific activity is likely to continue next week based on Q1FY11 result announcements for companies that are yet to come out with results. Many front line companies such as State Bank of India, Bharti Airtel, Tata Motors, GAIL, IDFC, Power Grid and Tata Steel, are still to announce their results.
In the next session, Nifty may face selling pressure at higher level or if traded below 5350. Traders are suggested to sell at rise as long as Nifty is trading below 5420. 5270-91 may act as a support level. IT and REAL ESTATE may face selling pressure while OIL-GAS may attract buying.
FOR TODAY:
Nifty has to gain its strength and needs to trade and remain above 5392.75 whereby it may move up to 5407/5423. Strong support for the NF exists at 5357.25 which if breached decisively with volumes then NF may slide to 5339/5316.
All Asian Markets are trading green and with gain of nearly 1-1.5%; SGX Nifty is trading @5411 i.e., 40 points up. Frankly speaking, the trend is still up till it trades below 5350; However, the trend is moving very fast towards down.
My trade will be:
BUY NIFTY FUT ABOVE 5363,TGT 5388-5396, STOPLOSS 5348
SELL NIFTY FUT BELOW 5385, TGT 5361-5351, STOPLOSS 5402
If nifty future opens around 5410, the abvoe trade will not be implied.
Below is the strategy for intraday received from reputed broker:
1 SELL NIFTY FUTURE AROUND 5392-5400 SL 5420 TGT 5350-5308
2 SELL BANKNIFTY FUT BELOW 10110 SL 10150 TGT 10070-10020
3 SELL ICICIBANK FUT BELOW 897 SL 905 TGT 889-880
4 BUY M&M FUT ABOVE 662 SL 654 TGT 670-684
5 BUY LICHSGFIN FUT ABOVE 1154 SL 1144 TGT 1164-1174
6 BUY TATASTEEL ABOVE 545 SL 535 TGT 555-565
7 SELL DLF AROUND 308 SL 313 TGT 300-295
8 BUY BAJAJHLDNG ABOVE 530 SL 524 TGT 536-545
NOTE: Please go through "WARNING" on this blog. TRADE SAFE AND ALWAYS WITH STOPLOSS. ONLY STOPLOSS WILL PROTECT YOUR MONEY.
