The week past and expected
Technically speaking: On Friday the market opened in a red with significant losses on the back of negative global cues
and remained weak till the 1st session of the day, however, it recovered in the second half of the day due to oversold
activity in a short span of time. The losers were mainly high beta stocks like Aban Offshore, HDIL, Tech Mah, JP Asso and
Punj Lloyd. Gainers were mainly from pharma and Oil refineries like Ranbaxy, Cipla and BPCL.
For the day and for the week, the level of 16860 and 5005 will act as a major hurdle for the market and till it remains
below the same, will invite few more round of quick buying and selling. As the medium term trend is still negative we have
to be cautious below Friday's lowest levels 4800/16200. In case the Market breaks these lows, then the market may even
gradually fall to 4670/15800 levels. Sustenance of the market above 5005/16860 level will only lift the overall sentiment
for the market as it will try to negate negative divergence on weekly basis.
For the day we will watch on 5005/16860 and 4890/16510 level as the range to trade.
BRIEF OVERVIEW
n Nifty closed the week on a negative note as significant selling was seen
across global markets. Buying emerged at lower levels which led to a significant
recovery from the lows of the trading session.
n Market wide open interest is seen at Rs. 86,846 crs. Nifty futures witnessed
significant volumes with addition in open interest to the tune of
10 lakh shares. Futures trade at a premium as compared to the earlier
session's discount of 13 points.
n Nifty turnaround for Nov series is seen at 4985. Sustain above the same
would indicate the index continues to remain in an up trend for higher
levels of 5250. On the other hand failure to sustain above 4950-5000 levels
would further invite selling in the near term.
n We expect OIL and Gas stocks to do well in the medium term. Medium
term investors are advised to accumulate HPCL and BPCL at current levels.
GAIL remains in an up trend above 380 for 450/500 on the higher
side. Pharma stocks also remain positive at current levels led by Ranbaxy.
n Midcap banking can be bought on correction. Bank of Baroda, DENA Bank
and Vijaya bank remain our preferred picks for the medium term. Real
Estate majors are expected to consolidate with a negative bias in the
near term.
n Nifty OI concentration is seen at 5000 call and 4800 put options. Significant
addition is seen in 4800 put options as the index recovered from
lower levels.
OUTLOOK
n Nifty Dec turnaround is seen at 4995; if the index manages to sustain
above 4950-5000 the up-trend remains intact for higher levels of 5250/
5450. On the other hand below 4950-5000 we advice caution with stock
specific buying for the medium term.
n We remain positive on the Oil and Gas, Pharma and Midcap Banking
space in the medium term. Buying is advised in select stocks on corrections.
Bank of Baroda is expected to test 560 levels on sustain above 500.
Educomp remains positive above 700 for 800/850 on the higher side.
