Friday, May 8, 2009

>Daily Market & Technical Outlook (ICICI Direct)

Key points

  • Market outlook — Open flat with a negative bias
  • Positive — FIIs buying consistently
  • Negative — Crude rising again, MF selling

Market outlook

Indian markets are likely to open flat and trade with a negative sentiment. Some profit booking cannot be ruled out later in the day. The announcement on the stress case needs some more clarity and markets may trade range bound for the next few sessions till the fullimpact is calculated. We advise against taking aggressive trading positions till clarity emerges or the market breaks from the trading range of 3500-3750 on the Nifty

The Sensex has supports at 11900 and 11730 and resistances at 12270 and 12550. The Nifty has supports at 3640 and 3600 and resistances at 3730 and 3760

Asian markets were trading flat to negative in the morning session

US stocks slid on Thursday as investors took profits from the technology sector’s recent surge, while analyst downgrades hurt telecoms and a tepid response to a government bond auction raised fears about public finances. However, stock index futures rose after the official government results were released that said leading banks would raise $74.6 billion to build a capital cushion. Officials hope this will restore faith in financial firms and set a course out of the deepest recession in decades. Shares of several major banks, includingCitigroup rose after the bell, with Citi gaining 6.6% to $4.0 after regulators said the bank’s capital need was $5.5 billion. Citi had ended the regular session down 1.3%. There was no major negative surprise from the stress results

Stocks in news: Reliance, Essar Steel, DLF, Religare

Technical Outlook

We said, "profit-booking may prove temporary if candle's low at 11899 gets protected today, though the shadow area remains a challenge on the upper side." The day saw a volatile trade holding 11899, but not crossing the shadow area. The 8% gains in Metals aided Sensex to finish 1.3% higher. A/D ratio turned +ve 5:1.

The action formed a small bull candle retracing 61.8% of Wednesday's bear candle. Failure to trade strongly above the day’s high of 12144 would prove the corrective nature of yesterday's action and test the lower range of the sideways action of the past three days. It will be positive otherwise.

To see full report: OPENING BELL 080509