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Nifty View
Nifty has completed its 9th month in the downward
channel on monthly charts and has taken support
at the lower band of the channel. Now this area of
lower band would be critical area and sustaining
below these levels may increase further selling
pressure in the market towards 4500-4350 levels.
As mentioned in the previous report market is in a
bear phase, Nifty below 4820 which is 200 week
simple moving average on a closing basis,
correction would be faster in months to come. Till
then nifty sustaining 4900, rally till 5150 to 5400
cannot be ruled out.
Nifty has immediate resistance of 5100 level which is
also 23% retracement of the downfall from 6340 to
4720 levels where it may face hurdle, sustaining and
closing above these levels only may take rally towards
5350 levels(38% retracement).
Whereas if it fails to hold the 4900 levels then further
profit booking may be seen followed by selling in
Banking-IT-Metal and Capital Goods stocks where lot
of weakness is there and participants would like to
book their profits at higher levels. Nifty if breaches
4820 levels and closes below these levels for one to
two trading days then selling pressure may get
intensified with breaking the recent low of 4720 and
may head towards 4500-4350 levels.
Sensex View
During the month of August, Sensex formed a long
bearish Candlestick with closing @ lowest in
17months, and making a downward channel
formation.
Sensex has completed 9months of correction from
November 2010. Sensex close above 17700 for 3-4
trading days on continuous basis only will reverse
the downtrend otherwise till Diwali the downtrend
may continue.
Sensex from 1990 has corrected every 2 years
1990,1992,1994,1996,1998,2000,2002,2004,
2006,2008 and this correction which started in
2010 November has till now corrected 25%
that is 15800 which has been the lowest till
now comparing with 2006 but this correction
can be even 33% where levels of 13900 are
also possible if things don’t improve. Any rally
till 18300 can be also a pullback rally but below
16070 which is 200 week moving average,
things can get worst before improving.
BSE IT View:
We continue to maintain our stance of being
negative on IT as said in the last presentation also.
No end to the worries for the tech stocks as they
lower the budgets for 2012 also citing lack of
visibility of orders for outsourcing companies.
Also recruitment by Indian IT companies witnessed
a slowdown (down by 49%) in the month of
August, owing to the crisis in the US and Europe
region .
INFOSYS, HCLTECH, WIPRO, TCS looks weak
on charts, these stocks are in pullback phase and
if fails to hold the rally then heavy selling could not
be ruled out. One should keep cautious approach
in these stocks.
Wipro looks very weak on charts, it is trading
below 100 DMA and 200 DMA. If it breaches 310
which is the recent low made in August month then
it may target 285- 280 levels in coming days.
Dark Clouds surround…
The problem of slowdown in Euro zone and US continue mainly on postponement
of problems and which is also having an impact on Indian economy. Sectors like
export oriented, IT, metals, job generation and to that extent the remittances from
outside are also getting impacted which is further disturbing the demand and supply
scenario in our economy.
Q1 results did not bring in any surprises with top line growth but pressure seen on
bottom line mainly on higher raw material and interest cost. On the other hand global
peers have reported decline in top line but improvement in bottom line by their cost
cutting measures. Going forward Q2 results are also expected to be on similar lines.
The focus of volatility has been shifted mainly from domestic platform to global
arena.
The domestic concerns on liquidity, higher interest cost, economy slowdown
still haunts the investors. The sectors which have been severely hurt in the
downward rally are the banking, IT, metals, (as mentioned in the earlier article)
auto and realty stocks specifically.
Banking – default concerns on European banks, asset quality issues, margins
pressure
IT – US and European exposure where uncertainty still prevails
Auto & Realty – Interest rate concerns
Metals – global slowdown in the economies
Going forward we feel that Banking and IT will see the pressure where as
Realty and Infra stocks look good for a longer term perspective
An eye for events this month…
After the Anna Hazare episode now the next event in line is the RBI monetary
policy and before that the monthly inflation and IIP numbers. After not so
encouraging GDP numbers and the Finance ministers hint towards softening of
interest rates to RBI the action on monetary front will be much watched. Also the
advances tax numbers for Q2 will come in the later part of this month which will
further guide the direction of markets.
On global front also the September is an eventful month with G-7 Finance
ministers and Central bankers meet, FED meeting, German votes for bailout
funds and Greece due for more aid will keep the our markets also on heels.
Nifty Range Bound
Nifty may rally till 5750 levels in coming days whereas on
downside if it breaches 5300 levels then 5180 becomes
the next level and below that heavy selling could be seen
towards 500-4800 levels.
Negative to Range
Bound
Sensex Range Bound
Sensex and Indian market has corrected every 2years
starting from 1990-1992-1994-1996-1998 in 90’s and
2000-2002-2004-2006-2008 and now in 2010 Correction
has started in November on Diwali day and now when
would this correction end is there in everyone mind. .
Negative to Range
Bound
Sector View
(Healthcare)
We remain Positive on Health care as
mentioned in last presentation
Ranbaxy Reco – 563 , High - 570
Glenmark Reco – 331, High - 344
Though the stocks
have not shown
much movement we
remain positive on
the stocks and
sector
Sector view
(IT)
We remain Negative on IT as
mentioned in the last presentation. We
Continue with the same view for this
month.
INFY – 2752, Low – 2161
Wipro – 383, Low – 311, Tgt – 360-345
Any rally should be
used to exit
WIPRO Revised Tgt - 285-280 Low -311 last month
Last month Target
reached
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Nifty View
Nifty has completed its 9th month in the downward
channel on monthly charts and has taken support
at the lower band of the channel. Now this area of
lower band would be critical area and sustaining
below these levels may increase further selling
pressure in the market towards 4500-4350 levels.
As mentioned in the previous report market is in a
bear phase, Nifty below 4820 which is 200 week
simple moving average on a closing basis,
correction would be faster in months to come. Till
then nifty sustaining 4900, rally till 5150 to 5400
cannot be ruled out.
Nifty has immediate resistance of 5100 level which is
also 23% retracement of the downfall from 6340 to
4720 levels where it may face hurdle, sustaining and
closing above these levels only may take rally towards
5350 levels(38% retracement).
Whereas if it fails to hold the 4900 levels then further
profit booking may be seen followed by selling in
Banking-IT-Metal and Capital Goods stocks where lot
of weakness is there and participants would like to
book their profits at higher levels. Nifty if breaches
4820 levels and closes below these levels for one to
two trading days then selling pressure may get
intensified with breaking the recent low of 4720 and
may head towards 4500-4350 levels.
Sensex View
During the month of August, Sensex formed a long
bearish Candlestick with closing @ lowest in
17months, and making a downward channel
formation.
Sensex has completed 9months of correction from
November 2010. Sensex close above 17700 for 3-4
trading days on continuous basis only will reverse
the downtrend otherwise till Diwali the downtrend
may continue.
Sensex from 1990 has corrected every 2 years
1990,1992,1994,1996,1998,2000,2002,2004,
2006,2008 and this correction which started in
2010 November has till now corrected 25%
that is 15800 which has been the lowest till
now comparing with 2006 but this correction
can be even 33% where levels of 13900 are
also possible if things don’t improve. Any rally
till 18300 can be also a pullback rally but below
16070 which is 200 week moving average,
things can get worst before improving.
BSE IT View:
We continue to maintain our stance of being
negative on IT as said in the last presentation also.
No end to the worries for the tech stocks as they
lower the budgets for 2012 also citing lack of
visibility of orders for outsourcing companies.
Also recruitment by Indian IT companies witnessed
a slowdown (down by 49%) in the month of
August, owing to the crisis in the US and Europe
region .
INFOSYS, HCLTECH, WIPRO, TCS looks weak
on charts, these stocks are in pullback phase and
if fails to hold the rally then heavy selling could not
be ruled out. One should keep cautious approach
in these stocks.
Wipro looks very weak on charts, it is trading
below 100 DMA and 200 DMA. If it breaches 310
which is the recent low made in August month then
it may target 285- 280 levels in coming days.
Dark Clouds surround…
The problem of slowdown in Euro zone and US continue mainly on postponement
of problems and which is also having an impact on Indian economy. Sectors like
export oriented, IT, metals, job generation and to that extent the remittances from
outside are also getting impacted which is further disturbing the demand and supply
scenario in our economy.
Q1 results did not bring in any surprises with top line growth but pressure seen on
bottom line mainly on higher raw material and interest cost. On the other hand global
peers have reported decline in top line but improvement in bottom line by their cost
cutting measures. Going forward Q2 results are also expected to be on similar lines.
The focus of volatility has been shifted mainly from domestic platform to global
arena.
The domestic concerns on liquidity, higher interest cost, economy slowdown
still haunts the investors. The sectors which have been severely hurt in the
downward rally are the banking, IT, metals, (as mentioned in the earlier article)
auto and realty stocks specifically.
Banking – default concerns on European banks, asset quality issues, margins
pressure
IT – US and European exposure where uncertainty still prevails
Auto & Realty – Interest rate concerns
Metals – global slowdown in the economies
Going forward we feel that Banking and IT will see the pressure where as
Realty and Infra stocks look good for a longer term perspective
An eye for events this month…
After the Anna Hazare episode now the next event in line is the RBI monetary
policy and before that the monthly inflation and IIP numbers. After not so
encouraging GDP numbers and the Finance ministers hint towards softening of
interest rates to RBI the action on monetary front will be much watched. Also the
advances tax numbers for Q2 will come in the later part of this month which will
further guide the direction of markets.
On global front also the September is an eventful month with G-7 Finance
ministers and Central bankers meet, FED meeting, German votes for bailout
funds and Greece due for more aid will keep the our markets also on heels.
Nifty Range Bound
Nifty may rally till 5750 levels in coming days whereas on
downside if it breaches 5300 levels then 5180 becomes
the next level and below that heavy selling could be seen
towards 500-4800 levels.
Negative to Range
Bound
Sensex Range Bound
Sensex and Indian market has corrected every 2years
starting from 1990-1992-1994-1996-1998 in 90’s and
2000-2002-2004-2006-2008 and now in 2010 Correction
has started in November on Diwali day and now when
would this correction end is there in everyone mind. .
Negative to Range
Bound
Sector View
(Healthcare)
We remain Positive on Health care as
mentioned in last presentation
Ranbaxy Reco – 563 , High - 570
Glenmark Reco – 331, High - 344
Though the stocks
have not shown
much movement we
remain positive on
the stocks and
sector
Sector view
(IT)
We remain Negative on IT as
mentioned in the last presentation. We
Continue with the same view for this
month.
INFY – 2752, Low – 2161
Wipro – 383, Low – 311, Tgt – 360-345
Any rally should be
used to exit
WIPRO Revised Tgt - 285-280 Low -311 last month
Last month Target
reached
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