The opening was neutral on Monday. However, it failed to move further in the latter part of the day. Stocks
struggled a lot to sustain at higher levels and they failed to cheer up the sentiment on the back weakness in IT and
Auto stocks.
Currently, the market has retraced beyond its normal limits in the short run. The rally that we came across from 4930
levels was smart but quick and may be that is the reason traders are exercising caution above the break out levels of
5180/5170. For the day we will keep a watch on the level 5240/16550 as sustenance of the market below the same
may weaken the sentiment further. Below the above mentioned levels the market has next major support in the
region 5190 and 5170 (17430/17350). Any close below the level 5160/17300 may deepen the current fall to 5100/5080
levels.
Our advice is to remain short below the level 5240/16550 with a tight stop loss above 5276 level. However, one should
be cautious in short positions around the support area 5190/5170 as these levels may act as a concrete support for the
market and "reversal" from these levels may invite sideline long traders to join the fresh up move that will try
surpassing 5300 levels.
Market wide open interest is seen at Rs. 97,435 cr. Nifty futures premium
is seen at 3 points with marginal reduction in open interest. Three day
average for the index is seen in the range of 5260-5280; near term trend
depends significant on how nifty behaves around the same.
n Nifty is expected to have completed its correction at 5245 levels. Cross of
5310 will confirm the reversal of the index. Targets for the index are seen
at 5350-5400 in the near term. Jan turnaround is seen at 5200 above
which buyers remain strong.
n IDFC is expected to test 173 in the near term. SBIN remains strong above
2260 for 2340/2370 on the higher side. ICICI is expected to complete its
correction around 873 levels.
n Metal majors are expected to consolidate in the near term. Price correction
is expected in the same. Capital goods majors are continue to consolidate
at current levels. Telecom majors are expected to gain from current
levels. Investors are advised to accumulate Rcom and Bharti at current
levels.
n Nifty options OI concentration is seen at 5300 call and 5000 put options.
Call writing is seen at 5350-5400 levels indicating possibility of the index
testing the same before any profit booking sets in.
