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Tuesday, July 27, 2010
Gap-up start likely; RBI's move eyed
Headlines for the day:
NMDC eyes two mines in Russia for Rs1,881 crore
Dabur picks up Turkey firm for Rs323.78 crore
RBI says inflation remains a target lest it hurt growth
FedEx guidance and housing data lift US stocks
Twenty-nine out of thirty Dow components ended higher
An increased forecast from FedEx and some better-than-expected new home sales figures sent the US stock market up solidly on Monday, 26 July 2010. With Monday's gains, stocks closed higher for third straight day. There weren't any major earnings announcements for traders to digest this morning. The dollar index fell against its competing currencies.
Bullion metals end mixed
Gold drops but silver rises as housing data checks in better than expected
Bullion metal prices ended mixed on Monday, 26 July 2010 at Comex. Gold prices dropped but silver rose after the housing report at Wall Street checked in better than expected. Housing data reduced gold's investment appeal but silver rose due to industrial demand.
Copper prices benefit from strong new home sales data
Lower dollar aids further in prices going up
Copper prices ended higher for sixth straight day at Comex on Monday, 26 July 2010. Lower dollar and better than expected report on the housing front led to higher metal prices on Monday. Copper is heavily used in construction wiring and benefitted from the new home sales news.
Crude ends flat
Prices rise earlier in the day following strong housing data
Crude oil prices ended flat on Monday, 26 July 2010 at Nymex. Prices fluctuated throughout the day and rose earlier during the day following better than expected housing data. Then, prices pared early gains and settled flat for the day.
Tata Elxsi
We recommend a sell in the stock of Tata Elxsi from a short-term perspective. It is evident from the charts of the stock that after encountering a significant long-term resistance in the zone between Rs 340 and Rs 350 in March 2010 itstarted to decline. Since then, the stock has been on a medium-term downtrend. Moreover, it met with twin resistance (down trendline and resistance level) around Rs 290 in early July and it had resumed its medium-term downtrend. On July 26, the stock tumbled 5 per cent, breaching its 21 and 50-day moving averages decisively. The volume traded was above average on that session. The daily relative strength index has entered in to the bearish zone from the neutral region and weekly RSI is slipping towards this zone in the neutral region. After signalling a sell, the daily moving average convergence divergence oscillator is entering in to the negative territory implying downward momentum. Considering that the stock's medium-term down trend-line is intact, our short-term forecast on the stock is bearish. We expect the stock to decline further until it hits our price target of Rs 250 or Rs 240 in the approaching trading sessions. Short-term traders can sell the stock while maintaining stop-loss at Rs 276.
via BL
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