Indian stock market opened in the green but with very flat and quiet while Asia is trading weak yesterday (Tuesday, the 24th August 2010). The market showed downtrend throughout the day due to sell-off in early trade. The market closed weak due to heavy sell-off in the trading session. The opening was gap-up but thereafter, weak global cues weighed heavily on our market and it traded lower for the most part of the day. However, the Nifty managed to give a closing above the important 5500 mark for the fourth consecutive day. It may also be noted that the market didn't allow to break 5479 level. Nifty closed at 5,505.10, down by 38.40 points or 0.69 percent over the previous day closing of 5,543.50, after witnessing a low of 5,488.45 and a high of 5,547.25 . Sensex closed at 18,311.59 , down by 97.76 points or 0.53 percent over the previous day closing of 18,409.35. It touched an intraday low of 18,260.71 and high of 18,451.73 . The markets’ breadth was negative. Out of 3,038 stocks traded, 1,184 stocks advanced, 1,740 stocks declined and 114 remained unchanged. In Sensex, 7 stocks advanced and 23 stocks declined. Market breadth was also negative on the NSE with advances at 416 against declines of 864. Top gainers included BHARTIARTL, HUL, RCOM, SBIN, HDFCBANK, CAIRN and RANBAXY. Top losers are listed as STER, HINDALCO, DLF, JAIPRA, RELINFRA, UNITECH and IDEA.
On the sectoral front, Consumer Durable, Health care and FMCG traded marginally higher. However, Realty and Metal lead to a decline.
The daily chart of Nifty is showing that it has been giving closing above 5500 for last four successive trading sessions.
MARKET OUTLOOK: Indian stock market may trade range bound. Sluggishness due to over valuation concerns is letting investors nervous and hence profit taking seen at higher levels. However, money waiting on the sidelines may support market on correction as sharp dips in the market is uncalled for. In the next few session, Nifty may trade in the range 5450-5550. If Nifty breaks 5479, it may further go down to 5450-5400‐5350. However a breach of 5550 would open the gate for 5600-5680. Since Nifty is likely to test 5450,  the strategy of selling at rise with close stop loss will be fruitful.
FOR TODAY: US stocks declined, sending the Standard & Poor’s 500 Index to a seven-week low, as a record plunge in home sales cast further doubt on the viability of the economic recovery. The NASDAQ, Dow Jones and S&P 500 slipped 1.83%, 1.32% and 1.45%, respectively. European markets were in RED. All Asian markets are trading in RED at this moment. SGX Nifty is down around 10 points and trading at 5498. Surely, our market will open flat to negative.
I will buy Nifty future only above 5550; Otherwise, will sell at/around 5540-5544 level with strict stoploss 5550. OR will buy around 5481-5484 level with strict stoploss of 5466.
DISCLAIMER: Holding some short position in Nifty created on Monday. Covered half of them yesterday and exited 5500 PE.
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