Sun, 05th June:

Wednesday’s US data releases confirm that the economy has undoubtedly hit another soft patch. US is not the only country, other countries are also contracting, some are raising their lending rates to fight against the rising inflation and some trying to stay afloat with the austerity measures by the government.

Primary articles Inflation rate for the week ended May 211 fell sharply to an 81 week low of 10.87% due to a fall in prices of non-food items. Food articles inflation fell to 8.06% from 8.55% during the week.

After the news of the Anil to be questioned by CBI, ADAG stocks fell like a dead pin. But as the court cancelled the plea, the very next day the stock stood up firm and rallied nearly 10.5 % for the week. Bajaj Auto surged 4.3%, Dlf 3.7%, Relcapital 7.3%, Sun Pharma 6%, Ambuja 5.4%. Hul surged on back of acquisition by P&G.

Tata Motors was the major looser in the frontline stock which lost almost 6% in a week. M&m too lost 5%. Hindalco 3.9%, T. Steel 2%, Iob 2% and Bhel lost 1.2%.Cairn lost 3.3%. Beml was down by 7.2%, Spice Jet 10.5%, Dchl 6%, Den 4.7% and shree cement closed down by 5.7%.

But the Midcap and Small Cap Index closed higher by 2.4% & 1.5% higher. Cambridege Sol was the major gainer by surged 29.5%, Arss Infra closed up 21.5%, Llloyd steel 20.6% and Tril by 20.2%. On the other side IFB ind lost 21.3%, Rmmohite closed down by 22.5% and Accentia Tech lost 15.6%.

Numbers still counting as more and more names emerged in the 2G scam. Investors also counting on their losses. Companies named in the 2G scam lost nearly Rs.80K Cr in market capitalization since Nov 1. Anil Ambani leads the race with max of the loss in his companies. Anil’s company lost nearly Rs.45K Cr out of the total loss. with max of the loss in his companies. Anil’s company lost nearly Rs.45K Cr out of the total loss. The recent addition was the owner of the family business of Sun TV. Anil Ambani got clean chit against the order.

Reality & Banking sector continued to be the talk of the town. With rising interest rate lead to falling ownership of the residential apts in India. Slow growth rate and increasing home loan rate lead to downfall in the registration of the new houses.

In the last 4 weeks Nifty has been trading in a very tight range of 5600-5350 levels. As mentioned in my earlier article also the May month has seen to be a corrective month and it did happen. Since the start of the month Markets started correction. Nifty from the top of 5775 levels corrected and tanked till 5325 levels. Nifty was trading near the over sold zone. But bounced back a bit in the last 2 week.

Nifty in the last week have bounced back from the 5325 levels. Nifty has good support at 5335-5325 levels. Nifty major resistance at 5600 levels. If Nifty closes above the 5600 levels, than there could be no stoppage till 5750-5800 levels. Markets are still not comfortable to trade in. Close above 5600 levels should only be considered for taking delivery.

This Weeks Call

Sell Axis Bank below 1242 SL 1248.

Sell Bhel below 1900 SL 1909.

Buy Biocon above 365 SL 362.

Buy Glaxo Pharma above 2410 SL 2400.

Sell Gmr infra with SL of 33.

Buy Lnt close above 1726 SL 1716.

Sell Ril below 933 tgt 920.