Sunday, April 10, 2011

Sun, 10th Apr 2011 Correction continues


2 weeks rally ended with a mild correction as off now. Indices corrected sharply on the last day of the trading session of the weak despite positive global cues. Profit booking was seen as the markets were overbought. Markets are surging on back of FII buying. Since the start of the new rally from 22nd Mar FII have bought almost Rs.11000Cr ($2.5bn) worth of stock in the Indian Equity markets. Domestic players were net sellers.

Indices gained marginally. Reality Index gained the most 2.6%, Capital Goods Index surged 3%. Auto 0.5%, bankex 0.8%, Metals 0.7%, IT 0.6%.

Gold gained as conflict in Libya, concerns about European debt and rising inflation spurred demand for an alternative investment. Silver also climbed to a 31 Year high. Crude prices may have found a new floor around $100 a barrel, supported by rising production costs and higher budgetary requirements in Saudi Arabia.

European Central Bank ups main refinance rate by 25 bps to 1.25%. Bank of England keeps Bank Rate unchanged at 0.50%.

Indian economy is expected to grow at a slower rate of 8.2% in the current fiscal down from 8.6% last year. Rising Oil prices coupled with Monetary and fiscal tightening would have a dampening effect on demand which may lead to slower growth rate.

It’s once again a season of company results. Markets will be more focused towards the company’s performance. Markets will be more of stock specific. Midcap IT and Infra stocks looks good. These are some of the stocks which failed to catch up with the frontline stocks rally.

As mentioned in my earlier article that the Nifty will find stiff resistance at its 61.80% retracement levels. And it will find difficulty above 5905 levels. Nifty in the current week made a high of 5944 and started correcting. Nifty fell down below its 61.8% retracement levels to close at 5842. Nifty will find support at 5800-5765-5735 levels.

In the last week’s article SUZLON was recommended to buy at 45 levels, it made a high of 56.35. Punjlloyd was also recommended to buy at 67, it made a high of 77.50. Unitech made a high of 48.50 was given at 46.50.

PIPAVAV SHIPYARD

Pipavav shipyard is been tradin in a very tight range between 83.50 -75.00. As we can see in the chart the stock have tried out many times to close above the 83.50 levels but failed to do the same and corrected everytime there after. After a month long consolidation it seems that the stock is ready to breakout through this range and move forward. Breakout above the 83.50 levels, can take the stock to 88-91-95 levels within short term. MACD has given a positive divergence. SL can be kept at 80.50 levels. Buy recommended at current levels.

Silver made its 31year high. Mining of Silver have gone down drastically but not the usage. Industrial usage of Silver will not come down. Demand will keep on increasing. Correlation between Silver and Gold have change dramatically in the recent years. To much up with that, Silver much be way above the current levels.

Last weeks call

Sell Asian paint below 2507 SL 2520. Did not trigger the price

Buy Bhel above 2127 tgt 2145-2154. Made a high of 2246.

Buy Cairn above 356 SL 354. Made a high of 372.

Buy Siemens above 885 SL 876.Made a high of 900.

Sell Sbi below 2705 SL 2719. Did not trigger the price

This weeks call

Sell Andhra Bank below 148 SL 149.50.

Sell Bharat Forge below 355 SL 360.

Sell Cipla Below 316 SL 319.

Sell Corbank below 621 SL 625.

Sell DLF below 257.5 SL 259.5

Sell Hdfc Bank below 2345 SL 2352.

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