Wednesday, March 25, 2009


■ Indian markets are likely to open flat today, taking cues from global markets. Asian markets were trading mixed in the morning amid caution over whether US government moves to shore up the economy will succeed. Before this, US markets fell on the uncertainty of the US plan of buying toxic assets. Bank stocks, which posted their best day in at least 16 years on Monday, dragged Wall Street lower as investors booked profits amid questions whether the US government's plan to spend up to $1 trillion to buy up toxic bank assets would work. We saw Indian markets ending nearly flat on Tuesday after a volatile session. Crude bounced to settle near $54/bbl as the dollar strengthened. The rupee is expected to start weaker on Wednesday,
following the dollar’s gains against Asian currencies and month-end import payments heighten demand for the US currency

■ The Sensex has supports at 9420 and 9350 and resistances at 9650 and 9770. The Nifty has supports at 2920 and 2900 and resistances at 3000 and 3030

■ Asian stocks declined after Japan’s exports slumped by a record margin, metal prices dropped and Sanyo Electric forecast a loss. The Nikkei fell 61.6 points, or 0.7%, to trade at 8,426.7. The Hang Seng fell 197.8 points, or 1.4%, to trade at 13,712.5

■ US stocks slid on Tuesday as investors paused to reassess the likely success of the government's latest plans to clean up bank’s balance sheets and revive the financial system, a day after initial euphoria over the plan drove huge gains. The Dow Jones was down 115.65 points, or 1.49%, at 7,660.21. The S&P 500 was down 16.59 points, or 2.02%, at 806.33. The Nasdaq was down 37.43 points, or 2.41%, at 1,518.34

■ Stocks in news: Patel Engineering, GAIL, NIIT, Ashok Leyland, Reliance Communication and DLF

Sensex: We said, "Trading above the candle's high of 9455 can test the upper end of the Green channel ... This could be the short term target/resistance for the Index." Up nearly 3% initially, the Index did touch the target, only to find its short-term resistance as argued. Retracing all the gains, it closed flat. Metals lost 3%. The A/D ratio ended negative.

The action formed an up day, but a bear candle with an upper shadow. This indicates hesitance at technical resistance near the upper channel and last month's high. However, it does not indicate a breakdown as yet, until we see a strong selling below its low at 9400. Holding 9400 can, therefore, encourage positive efforts, perhaps initially.

To see full report: OPENING BELL 250309