The week past and expected
Technically speaking: In the middle of the last week the market has formed peculiar top at 5310/17790 and reversed
back quickly. We are calling it as a peculiar top because it is in real terms distinct from other weekly tops. It's a reversal
activity from highest levels with huge volumes on weekly basis. The weakness was supported with a two mega sectors
namely Technology and Auto in which we came across sustained run-up in last several months.
The second supporting observation is weekly lowest level which is almost parallel to previous week's low. In case the
market fails to hold the level 5170/17330 and breaches 17310/5150 level then it may weaken the sentiment further to
5090/17050 or 5050/16950 levels.
The chances of hitting 5190/5170 levels are bright as the market closed below the crucial support area 5250/5260 (17620).
However, 5190/5170 (17350) levels may act as a good support area for the market. Previously the market has spent
nearly "two months" below the same. Our advice is to buy only on sharp recovery from these levels instead of buying in
advance around the same. The reason behind buying on recovery is, below the level 5170 the market has next immediate
support at 5150, which is weekly lowest level and sustenance of the market below the same will quickly pull to 5090/5040
levels.
Market wide open interest is seen at Rs. 99,181 cr. Nifty futures have
seen marginal reduction in open interest with premium seen at 5 points.
n Nifty remains in an uptrend above 5160 for an initial target of 5350. Jan
turnaround is seen at 5213 above which the sentiment remains significantly
positive. As compared to global indices, our index has under performed
and hence significant upsides can be expected as long as the index
sustain above 5160-5200 levels.
n TechM is expected to gain significantly in the near term. Above 1000 levels,
expect 1100 in the near term. Infosys Tech is expected to complete its
correction at 2450 levels from where a bounce back is expected.
n Metal majors are expected to consolidate in the near term after having
gained significantly in the recent past. Pharma stocks are expected to
gain in the near term. Traders/investors are advised to maintain long positions
in Biocon, Ranbaxy and other pharma majors.
n Nifty options concentration is seen at 5000 put and 5300 call. Call writing
is seen at 5350-5400 levels while no significant put writing is seen in the
current series. IV's remain on the lower side which indicates range bound
movement in the current series.
