Daily Call - May 13 2010

Daily Call - May 13 2010

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.

Daily Call - Apr 16 2010

US markets, after opening in red, recovered to close in green for the sixth consecutive day. While the jobless claims data came worse than expected, Philadelphia Fed index rose to 20.2 in April from 18.9 in March, the expectation being 20. March Industrial production stood at 0.1% versus the expectation of 0.7%

Our markets however had a sharp cut of about 1% as heavyweight stocks from Oil & Gas and Banking space saw profit booking. March inflation came in at 9.9%, a 17-month high, and resurfaced the fears of rate hike in the ensuing policy meet of RBI on 20th April. Reports that SEBI has directed FIIs and sub-accounts to disclose more information about their investment structure in India also added to the nervousness. Nifty as well as sensex for the first time after 9 weeks breached previous week’s low. For nifty the level was placed at 5290. While a lower top-lower bottom formation has already started in intraday 60 minute chart, on daily chart the same will happen when previous bottom placed at 5235 is breached. Keep a tight stop loss of 5235 in all the trading long positions.

Daily Calls - Apr 12 2010

Daily Calls - Apr 12 2010

Daily Call - Apr 7 2010

Dow recouped intraday losses to end flat while S & P 500 and Nasdaq closed with modest gains on the back of assurance emanating from the minutes of the Fed’s latest policy meeting that easy money conditions would continue. Oil, gold and Dollar all rose, though modestly.


Our markets took a breather yesterday after running hard for two days. Mid-cap and Small-cap stocks however continued their upward journey. Massive activity was witnessed in Nifty options where FIIs bought worth almost Rs. 1200 cr compared to buying of Rs. 350 cr. in index futures. Nifty calls added 15 lakh shares in open interest while Puts OI went up by 27 lakh shares. Mid-cap and small-cap stocks continue to hog the limelight and that’s where traders should concentrate as the Nifty consolidates. Meaningful resistance in Nifty comes only around 5470 where trendline adjoining tops of October 2009 and January 2010 is placed. 5235 continues to be key support.

Daily Call - Apr 5 2010

Benchmark indices managed to close in green for the eighth consecutive week on the back of smart recovery on the last trading session of the truncated trading week. On the first session of the week Nifty gained 0.4% but the RSI failed to make a new top, reconfirming the negative divergence. Following two sessions were marked by correction which took the benchmark around 1% lower from Monday’s close. But a smart rally of 0.8% on Thursday made the Nifty close higher by 0.16% on weekly basis.


The cautious view on the market continues as the negative divergence is still in place. Nifty is likely to face a stiff resistance around 5330, the top made on Monday. On the downside, 5235, the low made on Wednesday, is now a crucial support, a breach of which can take the benchmark to around 5170, where a trend line adjoining bottoms of 8th and 25th Feb presents a support. Traders need to be nimble footed and keep a strict stop loss of 5235 in long positions. Only a decisive close above 5330 along with the support of RSI will make the view turn bullish. Meanwhile, concentrate on mid-cap and Small-cap stocks which were underperformers in the earlier rally and might chart their own course.

Daily call - March 26 2010

US markets gave away all the intraday gains in the second half of the trading session to close almost flat. Dow ended with just 5 point gains, off 114 points from the highest point of the day. Dow surged nearly 1% intraday as Bernake reiterated the need to keep interest rates for extended period. This added to the bullish sentiment already in play over corporate earnings and fourth consecutive decline in weekly-jobless claims. But a surge in dollar spoiled the party, sending the equities and commodities lower. Dollar index surged past 82 to scale a high of 82.17.



Our markets ended the final day of the March derivative series with flourish on the back of last hour short covering. Nifty surged 35 points to finish at 5260. For the March series, both the benchmark indices put on a whopping 8%. Technically, markets are on a strong footing. If Nifty is able to sustain above 5270 then crossing of January high of 5310 should not be a difficult task and the benchmark can go all the way to 5350. 5187 continues to be immediate support.

Daily Call - March 18 2010

US markets continued their northward journey by putting on nearly half a percent in yesterday’s trade. Dow gained for the seventh consecutive day and closed at the highest level since 1st October 2008. European markets too gained and hit a 17 month closing high.

After yesterday’s gain, Nifty is now just 1.5% away from 5310, the high made in January. While the volumes were encouraging, broader market participation, which picked up after many sessions on Tuesday, faltered again in yesterday’s trade. FIIs bought index futures worth 874 cr. and Index options worth Rs. 799 cr. while provisional buying in cash segment stood at Rs. 815 cr. Put-call ratio rose to 1.61 from 1.56 on Tuesday on the back of substantial increase in open interest in 5300 and 5200 strike puts. Immediate support is place around 5158 while possible target on the upside is 5310.

Daily Call - Feb 24 2010

Dow ended down about 1% on the back of sharp dip in the consumer confidence. February Consumer confidence index declined to 46, which is a 10-month low, from a revised 56.5 in January, the expectation being 54.8. The weak data added to the cautious tone before congressional testimony from Federal Reserve Chairman Ben Bernanke on interest rate policy beginning on Wednesday.

Railway minister, Ms. Mamta Banerjee, will present her second Railway budget today. While no uptick in passenger fare is expected, a selective hike in freight rate might be done. While announcement of new trains and thrust on private sector investment will enthuse the related stocks, a concrete implementation of these plans will be crucial for translating these promises in the top line and bottom line of companies. Rollovers by and large are smooth ahaed of the F & O expiry of Feb series due tomorrow. Technically, markets are precariously poised as after not being able to cross the 4950 hump, a fall below 4805 will mean the breakdown from past four days consolidation and can take the benchmark near 4675, the bottom made on 8th Feb. On the other hand, a decisive crossover of 4930 would make the case for bulls stronger.

Daily Call - Feb 11 2010

US markets initially plunged deep in the red as Federal Reserve Chairman Ben Bernanke laid out plans to eventually raise some borrowing costs, but recovered thereafter to close with marginal losses as news was digested and markets realized that the immediate impact to the U.S. economy would be limited.

As expected, Nifty encountered a huge resistance around the upper band of the gap down opening on last Friday, the possibility of which was expressed in our Tuesday’s report. Our view that gains made merely on the back of short covering cannot be sustained, has also been vindicated by yesterday’s move. A further short covering was witnessed by FIIs yesterday as they bought index futures worth Rs. 879 cr while their OI went down by 22403 contracts. In Cash they provisionally sold worth Rs. 209 cr. DIIs however put in Rs. 459 cr. Put call ratio fell below 1 and Stock futures OI declined after a long time. An important observation I would like to share is that while a divergence on daily chart was already in place when markets made a lower bottom on last Friday but RSI made a higher bottom, a follow up action was required on the price chart to turn the view bullish. While a higher top higher bottom formation will only make that happen, a sustained crossover of yesterday’s high of 4827 will be the first move in that direction as it coincides with a trend line resistance joining tops of 22 Jan(5094) and 3rd Feb(4949). One can take a mildly positive stance if Nifty crosses 4827 decisively. Tomorrow markets are shut on account of Mahashivratri. Yesterday’s high of 4827 in Nifty, is now a crucial resistance while on the downside 4675 is the support.

Daily Call - Feb 9 2010

Euro zone’s sovereign debt concerns came haunting again as US markets closed with nearly 1% cut after briefly flirting with the positive territory in the first half of trade, led lower by financial shares.

While our markets bounced back smartly in the latter half of the trade, the sustainability of such moves is a big question mark. The gains made merely on the back of short covering are not sustainable, unless followed up by fresh buying. FIIs provisionally sold worth Rs. 935 cr in cash segment and 295 cr in index futures yesterday. Nifty took the resistance at the upward sloping trend line joining bottoms of August and November 2009 which earlier acted as a support. While On the move up, Nifty will encounter various resistances, including yesterday’s high placed at 4799, the upper band of the gap down opening on Friday placed at 4832 and 61.8% retracement level of the fall from 4951 to 4675 placed at 4846, the toughest one is placed at 4950, which happens to be the previous top. We have been advising sell on rallies since Nifty broke 5170 and traders who would have followed our advice would be a happier lot as market has been consistently coming down after brief rallies. Sell on Rallies still remains the advice and only a decisive close above 4950 will only negate the bearish view. Yesterday’s Low of 4675 is the immediate support.

Daily Call - Feb 4 2010

Dow ended two day winning streak as Obama’s pledge to complete banking and healthcare reforms revived fears of increased regulation and Pfizer’s disappointing outlook weighed on the health sector. A lesser than expected growth in US service sector also added to the negative sentiment. Metal prices fell back as the dollar strengthened. European markets too broke 3 day rising streak to close with about half a percent cuts as caution came back ahead of Thursday's Bank of England monetary policy decision and Friday's U.S. jobs report.

Positive global cues and short covering propelled our market higher in yesterday’s trade. While FIIs bought Nifty futures worth 2447 cr, Nifty OI went down by 7%, indicating short covering. A provisional buying of Rs. 396 cr in cash segment by FIIs was more heartening. Kirit Parikh panel, in its report submitted to Oil Ministry yesterday, has made some bold recommendations, the prominent ones being- Complete deregulation of petrol and diesel price, Rs. 100/cylinder hike in LPG and Rs. 6/litre hike in kerosene. While it is unlikely that these recommendations will be accepted in toto, Oil PSUs are likely to get a sentiment booster. Expect the market to recover after lower opening. Day traders can initiate long positions with first 10 minutes low as SL. At the risk of repeating, 4967 remains the resistance on the upside. 4814 is the immediate support followed by important one at 4750.

Daily Call - Nov 23 2009

Banking stocks surged late in Friday session, as rumors of Dena bank being taken over by Canara bank spread. If permitted it would be a welcome beginning for the whole host of mergers in the space. Banking stocks had already seen a large addition in open interest on Friday, and punters may book profit today at higher level.



Markets have come back from 5080-5180 resistance twice. We need RIL fire power to go past this critical zone and trace towards 5300. Reliance’s bid for LyondellBasell, if successful, would be India’s highest buyout till date. RIL’s underperformance of more than 35% in last 6 months makes us believe that if markets were to go up from here, RIL will lead that rally. The big boy looks set to provide leadership before it goes ex-bonus this Thursday.

Daily Call - Oct 1 2009

The Bharti–MTN deal has fallen through again. The first attempt had failed on May 25, 2008. Exactly a year after the first attempt failed, Bharti had dialed the number again on May 25 this year. MTN’s own compulsions and some last minute change of guidelines by SEBI may have had a role to play in not tying the knot. The markets will like this as they have rarely backed stocks which have bitten larger than what they can chew. Wiser after the failed courtship, the two companies will redouble their efforts to scout for a partner once again after a breather.

International cues are not very encouraging. In the US, Chicago purchasing managers index came in lower than expected. A reading of 46 indicates contraction. The quarterly Tankan survey by Bank of Japan is on expected lines but further cuts planned in December in machinery buying is a worry. The Nikkei is in red. Hong Kong and China are closed. Expect the markets to open lower and the 5000 mark in the Nifty is going to act as a solid support, though a slide of that magnitude is not expected. Crude prices going up will buoy some of the upstream oil and services companies and will hit the oil marketing companies. Gail could spring a surprise with Government mulling marketing margins for the company in the case of APM gas.

Daily call - Aug 7 2009

Daily call - Aug 7 2009

Daily Call - Aug 6 2009

The guiding force of this rally has been the Chinese economy. And if any questions are ever raised on the sustainability of the Chinese economic affluence, the world markets, including US and India will get jitters. Today is one such day, when Chinese markets are down 3% on concerns that monetary tightening could be in store after 7 months of easy money policy that has seen banks lending 160% of what they lent in whole of the last year.

Commodity stocks may take a beating and so would banking. So close your longs and take protective measures. Will this be a one day weakness, like the one we saw last week or some thing more enduring? The chances of the markets getting bearish from here are more. So even Hindustan Oil, some thing, which we have recommended in the past may only be a buy at dips story and not a outright trading buy if the 153 level is broken. In order to go short on the Nifty, one will have to first ensure that we trade below the 4600 mark for some 15 minutes. Keep a tight stop loss or simply buy lower puts if the 4600 level does cave in. Till the time this level breaks, there could be long trading opportunities if the Nifty does open sharply lower (more than 60 points) with the three minute low or 4600 as stop loss.

Daily Call - July 20 2009

The 9% surge seen last week has wiped out the head and Shoulders pattern that had been formed in the Sensex and the Nifty. Similar moves in the US markets have also made those bearish patterns fizzle out. However, considering the sharp rise in the past week, expecting an encore in this week may be asking for the moon, in a week that is going to witness the longest Total Solar eclipse of this century.

However, the week is set to begin on a positive note. The confidence comes from the fact that more than 3.2 Crore shares have been added in the stock futures. This is the highest single day addition in the month of July. Some of the stocks that we like are Jaiprakash Associates, FSL and Rolta. Among the banks, our interest revolves around ‘Axis’. Traders should keep an eye on international developments, where a $3 billion helpline is likely to be thrown at CIT, the beleaguered US bank. If this fails to materialise, it could jolt the traders.

Morning Daily - July 15 2009

Morning Daily - July 15 2009

Morning Daily - July 13 2009

Morning Daily - July 13 2009

Morning Daily - July 9 2009

Morning Daily - July 9 2009