Daily Call - Apr 22 2010

US markets closed absolutely flat after yo-yoing between positive and negative territory. Gains on account of strength in Apple and Boeing were negated by weakness in healthcare, financial and energy stocks. European markets however corrected about a percent on the back of lingering concerns over Greek debt.

Our markets could not sustain morning gains and closed almost flat after encountering stiff resistance around previous day’s high. Nifty gained more than the Sensex as Nifty component HCL Tech surged more than 8% after reporting strong quarterly results. Rate sensitive sectors, i.e. Realty and Banking outperformed while heavyweight Reliance continued to be a drag on the index. Mid-cap and Small-cap stocks outperformed smartly for the second consecutive day. Near term outlook on the market remains negative and will remain so until we see a resumption of higher-top higher-bottom formation on the daily chart. Individual stocks however can continue to outperform.

As mentioned in yesterday’s report 5280-5300 is likely to act as a strong supply area on the upside while 5160 is the immediate support. ACC and Ambuja Cements will be announcing their quarterly earnings today among others.