Indian markets dropped on Wednesday erasing earlier gains. The markets ended on a lower note after snapping a three-day winning streak. Traders witnessed profit booking following weak start of European peers and decline in Reliance Industries on gas cost report. As per media reports, production costs at two of the company`s natural gas fields in the Krishna-Godavari basin have shot up nearly 40% because of low output.
Oil & gas, capital goods and banking stocks edged lower, while metal and PSU gained.
At the close, the benchmark 30-share index, BSE Sensex lost 44.52 points or 0.22% at 20,015.80 with 15 components registering drop. Meanwhile, the broad based NSE Nifty fell by 16.25 points or 0.27% at 5,984.40 with 29 components posting drop.
Market breadth was negative with 1,546 advances against 1,454 declines.
VIEWS FROM DIFFERENT BROKING HOUSES:
Motilal Oswal (Market Diary):
• The Nifty closed marginally negative after three days of gains due to selling pressure on the failure to overcome the overhead resistance around 6050
• The weekly uptrend is intact as the Nifty recovered intraday from the previous Friday closing of around 5950
• The Nifty is in a sideways consolidation between the 50dma (6025) and the 10dma(5915)
Technical Idea of the Day:
Buy SBI above 2800 with stop loss at 2650
Sell Sun Pharma below 423 with stop loss at 440
OPTIONS:
Sell Nifty 5900 PE MSP 26 Sl 40
Sell SBI 2600 PA MSP 12 Sl 18
Buy Gail 500 CA MBP 11 Sl 5
Buy IDBI 170 CA MBP 2.6 Sl 1.2
Outlook for Today: Nifty futures saw no major change despite of the choppiness indicating longs came in last few sessions are still hanging on. Stock futures continue to remain light. It is prudent to take stock specific approach, we like Unitech & Strelite for going long. Nifty December series Options are attracting higher Open Interest in strikes around current levels indicating expectation of the range bound movement to continue.
LOTUSFUNDS: Buy on any dips to 5960‐5970 for an objective of 6050 with stop below 5916.
Emkay Global: Dark-cloud cover at the resistance of 50-DSMA
After a range-bound session for the major part of the day, Nifty sold-off during the closing bell, to end the session on a negative note. Moreover, today’s price action has formed a top reversal pattern known as Dark-cloud cover, where the second body of the Dark-cloud cover failed to go pass the resistance level of 50-DSMA, which proves that bulls were unable to take control of the market. Apart from this, Nifty is trading within a broad range of 300 odd points, since 26th Nov, 2010 and this range is taking the shape of a triangle. So unless the previous swing high of 6070 is surpassed the odds are in the favour of the bears. Also, the breadth of the market deteriorated as the day progressed to finally conclude with 1.1:1 advance to decline ratio. The momentum cycles on hourly degree too confirmed the sell call with their negative crossover. So we have revised down our short term bias for the target of 5800 with reversal at 6070.
Gaba Financial Advisors (Prakash Gaba): “The market has traded sideways with a positive bias and will continue to trade in a sideways mode. The crucial support on the downside for the Nifty is at 5,950 and resistance at 6,050-6,125. For Sensex, the crucial support on the downside is at 19,900 and resistance at 20,217”
Karvy (Ambrish Baliga): “I think crossing 6050 will be difficult for the market, It is prudent to book out at this point of time,” He advised investors to start booking profits at the current levels. The markets have regained important psychological support levels. However, the rally has been based on thin volumes making market men sceptical of any breakouts happening either way. “We could see levels of closer to 5,800-5,825 over the next two weeks.”
Miteshthacker.com (Mitesh Thacker): “5940-5950 level is very important to watch out for to decide the short-term trend. A lot of intraday averages are placed in that zone of about 10 to 15 points. So I think 5940-5950 will emerge as a key area to watch" The Nifty is still in a broad 250-point range of around 5750-5800 on the lower side to 6015 on the higher side.
JV Capital Services (Sajiv Dhawan): The Nifty may meander around the 6000 mark for another week to 10 days and look at fresh direction only in the new year. Volumes have been dull and lacklustre over the last few days, he said, adding "there is no real trigger over the next week to 10 days from a domestic perspective." He believes the next big sentiment booster for the markets will be the Q3 earnings and advance tax figures expected to be released in the new year.
Fairwealth Securities: “Despite heavy selling pressure in the final hour of the session in Indian market, metals and FMCG maintained the gains while the other entire sector turned red. The Sensex closed at 20,015, down 44 points from its previous close, and Nifty closed at 5,984, down 16 points. In the next session, Nifty may take support around 5,934. If sustained below 5,934, Nifty may test 5,870 and 5,800 levels. However, 6,030-6,040 may act as a strong resistance zone in Nifty. Again, intraday traders are suggested to stay long as long as Nifty holds 5,930. Metals and FMCG may maintain strength while banking, IT and capital goods may face selling pressure at higher levels”.
Microsec Securities: Indian stock market is likely to trade range bound without giving clear directions. The U.S. GDP data for the 3rd quarter may set some direction in market. We recommend buying in stocks like Renuka Sugars, Tata Elexi, IFCI, Aditya Birla Nuvo, Bharat Forge, Escorts, IDBI Bank and IOB with trading perspective and also for long term investment.
Microsec Securities (Technical): Nifty has been moving between 100 DMA (near 5863) and 50 DMA (6028) for last seven successive trading sessions. We expect this range bound movement would be continuing for another few days. If Nifty breaks 5863, it may further go down to the level of 5750. However a breach of 6028 would open the gate for 6230 in the short term.
On an intra-day basis Nifty has a support at 5950 and is likely to face a stiff resistance near 6028. If Nifty breaks 5950, it may further go down to 5920 and then 5900. However, if it is able to sustain above 6028, the level of 6070-6110 would become the next target.
NOTE: Sell Nifty futures around 6,025-6,030 for target of 5,980-5,940 and stop loss of above 6,050. Will update during trading hours. OR Buy Nifty future around 5940-50 level with stoploss of 5924 for a target of 6000.
