>EAGLE EYE ON 09/09/09 (SHAREKHAN)

Support at 4740

Markets on Sep 08, 2009: Above 4800

The market continued to move up third day on trot and closed marginally higher on support from heavyweights like Reliance Industries (up 3.5%) and the State Bank of India (up 4%). After hitting the day’s high in the first half, Nifty faced resistance around 4850 and slipped in the second half. In the coming sessions, Nifty is expected to take support around 20 hourly moving average (HMA) at 4740 and continue the up-trend for the short-term target of 5000. The bullish island on the daily chart holds the key for the current up-trend, however a close below 15275 will lead to trend reversal. Nifty is currently trading above 20 daily moving average (DMA) and 40DMA at 4626 and 4539 respectively, which are crucial support levels going forward. The momentum indicator (KST) has turned up and has given positive crossover. Our short-term bias is up for the target of 5000 with reversal above 4575.

On the hourly chart, Nifty is trading above 20HMA and 40HMA at 4743 and 4704 respectively, which are crucial supports in the immediate run. The momentum indicator (KST) has given negative crossover and trading above the zero line. The market breadth was negative with 532 advances and 741 declines on the NSE and 1384 advances and 1503 declines on the BSE.

Nifty added 22 points and Sensex 107 points to its kitty today. Of the 30 stocks of the Sensex, aluminium major Hindalco Industries (up 6%) and biggest Indian bank the State Bank of India (up 4%) were the top gainers, however Tata Power (down 3.5%) and FMCG major Hindustan
Unilever (down 2.5%) were hit the most. Metal stocks saw good buying, while auto stocks were under pressure.

To see full report: EAGLE EYE 090909