Market Outlook:
S&P CNX Nifty has made lower low and higher high making a engulfing candle, But Nifty managed just 5points higher than previous day. Market is seeing supply around 5100-5140 so around 5170 more supply is possible and focus could shift to midcap and small cap which is underperforming market. Nifty for the day 5070 is important for 5170 & 5230 on higher side. RELIANCE results have come below our expectation and after almost 8% rally last week on result expectation profit booking can be high. Nifty first time crossed 5000 in 2007, we saw 5000 in 2008, 2009, 2010 and now in 2011 so in real terms booking regular profit is more important and being in right stock @ right time. RELIANCE, INFY and L&T are investors most liked stock but leadership is changing and latest OUTLOOK profit article on L&T shows insider selling from peak levels, and stock has made Head & Shoulder pattern and near term target for the stock comes to around Rs.940.
§ Sensex- Sensex holding 16850 now can target 17230 & 17360 on higher level, 100DMA 17541 would be a major resistance on higher side where profit booking is possible as rally from 15745-17112 has been sharp and many investor who are struck @ higher level would reduce position. RIL, HDFC and Tech stocks are to be watched and range for Sensex 16500-17500 could be possible for the week.
Technical Calls:
ICICIBANK-Rs.890 Stock has made positive island, which means after Gap-down (866-860) on 03/Oct and latter it was followed by Gap-up(863.35-866) and till Rs.863 is not breached on the downside chance of stock giving 6-8% return is higher. Stock recovery has been V-shape, above Rs.905 the move would be faster.
ABAN-Rs.405 Stock after making double bottom formation around Rs.331 in daily, weekly and monthly has shown good strength, closing around 10weeks high. Stock has gained 19% in this settlement which would attract more short covering going forward.
Technical View: RELIANCE-866 Post results -RIL has gained 7.9% week that ended on expectation of result, now stock holding Rs.840 this week is important. Results were inline are slightly below market expectation, no major positive trigger as KG-D6 basin production ramp up would take 2-3years, PETCEM & Refinery margin may cool off due to falling global demand. Study says RIL in last 8quater after results has corrected 9-20% and average being 13% and after INFY Gap-up of 5% where many traders are trapped short now many are long in RIL and if stock fails to hold Rs.875 then correction can be big.
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