9am with Emkay; 20 December, 2010

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9am with Emkay

n        Dealer Comments

The markets started the day’s session on a negative note with almost 75 odd point’s downward gap tracking weak cues from the global markets particularly the weak Asian counterparts. Post weak opening markets had a very choppy session as everyone on the streets were awaiting the outcome of the RBI’s review policy meeting. It was trading in and out of the dotted lines till almost noon trades. Post the announcement by RBI of keeping key rates unchanged and also CRR unchanged but surprisingly reducing the SLR by 1% leading to good renewed buying interest and even short covering in banking stocks. Even IT space saw very good buying almost throughout the day with Infosys and TCS striking record highs in today’s trade. After weak opening by the European markets and weak closing by the Asian markets indices witnessed a big crack. But finally markets recovered the lost ground in the last hour of trade and closed the day on a positive note with metals and realty also joining the bandwagon of buying interest. Going ahead markets will continue to be driven by the news of the day, sometimes positive and sometimes negative but the only console is that the underlying sentiment and the outlook growth story shall continue to remain positive. After a very narrow range of trading finally the markets closed the day on a positive note towards the end near almost day’s highs with Sensex gaining 217 points or 1.10% higher to settle at 19865 levels while Nifty gained 56 points or 0.96% higher to settle at 5949 levels. The overall traded volumes were higher compared to the earlier day by almost 15% and were at Rs 1486 bn. While delivery based volumes were lower compared to the earlier day at 37.3% of the total traded turnover. Among the Fund activities FII’s were net sellers to the tune of Rs 0.14 bn while Domestic Funds were also net sellers to the tune of Rs 0.91 bn on 15th December 2010. While on 16th December 2010 FII’s were net sellers to the tune of Rs 3.17 bn in the cash segment while in the F&O segment FII’s were net buyers to the tune of Rs 11.07 bn while Domestic Funds were net buyers to the tune of Rs 0.96 bn.

n        Technical Comments

At the upper boundary of the falling channel

Nifty ended trade on a strong note ahead of a long weekend. After a disastrous fall last week, the Nifty recovered nearly 200 points to end the week on a positive note. As on now Nifty is trading at the upper boundary of the downward sloping channel (grey one), clearly visible on daily degree. Hence, we still feel that until this channel is surpassed with a significant margin, the medium term view remains bearish and any surge for the kiss of 6000 level should be used for liquidating long positions. Moreover, the weekly MACD is still in the sell mode, which is the basis of our medium term bearish view.

BSE Auto:

BSE Auto index has formed Tweezers Bottom where the lows of nearby candles are same. Also, the hourly MACD cycle is in buy mode. Hence we expect a short term bounce upto 10,200 level.