Sentiments remain positive2 min read . Updated: 06 Nov 2011, 09:32 PM IST
Sentiments remain positive
Sentiments remain positive
Driven by global factors, the Indian markets ended the week lower by about 1.5% as uncertainty about Greece kept sentiments low. The political drama, which stretched throughout the week, ended on Saturday after Greek Prime Minister George Papandreou survived a parliamentary confidence vote, avoiding snap elections, which would have torpedoed Greece’s bailout deal and inflamed the euro zone’s economic crisis. This is a positive for the global stock and bond markets.
Before this, there would be two more important resistance levels. The first, at 5,498, would be an important level to watch, which if broken would mean further gains. However, technically, I am seeing some consolidation followed by mild profit taking, which will not threaten the potential of the rally. Once this level is crossed with good volumes, the next, at 5,612, would become the next important milestone. By this level, the Nifty might start losing momentum; so it would be advisable to track volumes. Since this entire technical buoyancy is like swimming against the current, it would be advisable to keep an eagle’s eye on volumes. Any signs of volumes dropping should be seen with a lot of caution and the trigger for profit taking. However, due to any global or domestic economic reasons, if the Nifty retreats, it would most likely come across its first support at 5,191, which is likely to be a moderate support level. This would be followed by an important support at 5,156, which is most important level to watch.
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As mentioned before, if this level is breached, there would be negative sentiments and a further fall on the bourses. Since the economic indicators are quite important, it would be better to keep an eye on global as well as domestic economic indicators. Among global indicators next week, the US economic calendar is light as the US government’s data on the consumer price index and producer price index is due, apart from regular weekly jobless claims on Thursday. China has a busy calendar, which includes producer price index, consumer price index, retail sales and industrial output for the month of October due on Wednesday, followed by Chinese international trade data on Thursday. Back home, the trading week is shortened by two local holidays on Monday and Thursday. The data for India’s industrial output and manufacturing output will be released on Friday. The industrial output data will affect market sentiments. Apart from this, developments in the euro zone will have a major impact on market sentiments globally.
Among individual stocks, Aban Offshore Ltd, Titan Industries Ltd and HDFC Ltd look good on the charts. Aban Offshore Ltd, at its last close of ₹ 430.15, has a target of ₹ 440, and a stop-loss of ₹ 418; Titan, at its last close of ₹ 217, has a target of ₹ 226, and a stop-loss of ₹ 207, while HDFC, at its last close of ₹ 683.90, has a target of ₹ 695, and a stop-loss of ₹ 670.
From my previous week’s recommendations, Bharat Heavy Electricals Ltd and Indian Bank met their targets, while Development Credit Bank Ltd missed it by a whisker and continues to remain a valid recommendation.
Vipul Verma is chief executive officer, Moneyvistas.com. Comments, questions and reactions to this column are welcome at firstname.lastname@example.org