Market Outlook 03-08-2009

Markets gained over 8% for the month and almost 1.5% for the week, continuing with the up trend that began in mid March. Indices have closed at extremely crucial levels both on daily as well as weekly charts. As we had mentioned earlier also that weekly close above 4625 would have extremely bullish implications and now we have a closing just above this mark. On daily charts too we are approaching crucial levels of around 4680-4700. Sustained trades above 4700 could open up fresh targets of around 4950. On weekly charts another close above 4625 could open up fresh targets of around 5350-5400 that might be achieved over next few weeks. So, for bullish momentum to continue its is extremely important that market sustains at current levels for next 2-3 days at least. We are witnessing extremely high volumes for last 3-4 sessions and a breakout now that comes on the back of these heavy volumes could be extremely bullish. That could suggest a sharp upsurge to 5000 mark. For Sensex this target is placed around 16700-800 and breakout level is 15600. Auto stocks continue to lead the way and along with FMCG counters are already in bullish territory. ITC has given a breakout even on Monthly charts and that has after almost 40 months of consolidation. This suggests that ITC might again attain market leadership status that it once enjoyed. IT stocks are continue to look good and more upside is likely in stocks like Patni, TCS, Wipro and Satyam.( maybe after a brief consolidation/correction). Another important sector, Banking too has woken up after almost 6 weeks. SBI has given a breakout after almost 8 weeks of consolidation and could lead the sector to new highs. Other banks that are showing positive bias are Andhra Bank, Indian Bank, Syndicate Bank, PNB and Allah bad Bank (above 91). NHPC is issue opening on 7th Aug and this might keep the power stocks in limelight, particularly the PSU ones. So, watch out for some action in REC, Neyvelli (above 140), PFC and PTC (above 92). Amongst others Aban and United Spirits have given breakouts on both daily and weekly charts. Aban has targets of 1120 and even 1260 in coming weeks while United Spirits could target 1125- 1140 and 1280-1300 over short and medium term. Nifty now has immediate support around 4560-4580 and then around 4520-30 while expect explosive move above 4700.