Market Outlook:
S&P CNX Nifty has made lower high-lower low compared with previous day while Nifty Futures and Sensex has Gap-down, Nifty opened @ previous day lowest level. Nifty 5065 will act as strong resistance till that level is not breached profit booking and fresh selling may emerge and below 5018, Nifty has support around 4967 which is 3days low. Metal, Banking and Capital good space is looking weak with LT-BHEL underperforming market and on charts both these stock look weak for more correction. Market after 5weeks of correction 3weeks of rally is possible, now this week if we start to correct then below weekly support of 4940 and recent double bottom support of 4911 then 4720-4500-4350 are possible lower levels. Global events- a concern of Greece is heading for default is very high added S&P Cuts Italy's Sovereign Rating, which is 3rd largest economy in Euro zone. Global events, Weak Rupee is short term very negative Power & Steel Companies which import Coal & coke are seeing raw material prices moving higher.
§ Sensex- has gapped-down (16889-16865) which normally indicate weakness and till Gap levels not closed selling pressure would increase. Sensex has strong support around 16640 & 16530 levels breaching which 16375 is crucial levels to watch. Sensex failing to close the Gap-down in next few days and below 16375 then retesting of 15765 faster can't` be ruled out.
Technical Calls:
GITANJALI-348, Stock has been outperformer for the year 2011 with 66% YTD-year till date, Stock after making 52week high of Rs.351.5 is consolidating and now again strength is seen in the stock and good break-out above previous high then 8-10% gains is possible. Stock trades above all major averages which indicate strength for the stock. Stock is in Ban period in F&O and stock already has gained 10% this month & 15% quarterly which is squeezing shorts buy in cash.
JPASSOCIATE-70, stock is a Major Break-out above Rs.72 only it can trade above these levels for 15-20minutes then 7-10% return would become possible. JPASSOCIATE has been outperformer in Nifty for the month of September with gains of 15%. Stock has also made Inverse Head & Shoulder formation and above Rs.72 which is a triple Top Break-out target could be Rs.80.
Technical View: Make/Break
STERILITE-130, Stock has made lower high failing to Rs.135 on sustainable basis and normally lower low can lead to lower levels as Stock has closed near 20DMA Rs.129. Stock is trading near 28month low of Rs.120 and in short term weaker stock correct fast. Metal stocks are more cyclical and in correcting market they react faster on the downside Rs.104 is possible levels the stock can target in months to come.
