Weekly Stock Newsletter - Nov 21 2010

Bad news appears to be outweighing the good news these days, with the market tanking in the past two weeks after reaching within striking distance of the all-time highs on Diwali. The rising political temperature over the 2G spectrum scam, fiscal troubles in Ireland and China's monetary tightening have combined to dent investor confidence in recent days. The slowing FII inflows are also not helping either.



Given the sudden and sharp turnaround in sentiment in the last two weeks, it would be prudent to be a little cautious and wait for the trend to turn up again. In the absence of any major domestic triggers, the Indian market will continue to be driven by global cues. At the same time one has to keep track of the political developments as the UPA government clearly seems to under pressure over the 2G spectrum scam.

With the Nifty having broken below 5900, the bulls might remain jittery next week as well. Being the F&O expiry week, volatility could also inch up. The Nifty is likely to find support at 5850 while resistance is expected at 6050. Having said that, any significant fall should be utilised as a buying opportunity to build the long-term portfolio.

Watch out for the revised US GDP data and other important economic statistics from around the world. The US markets will have a truncated trading week owing to the Thanksgiving Day and Black Friday, which heralds the start of the shopping season