Market Outlook 06-08-2009

It was a lackluster day as far as the Nifty movement is concerned. Nifty moved in a relatively narrow before closing almost unchanged at 4684. The day belonged to the Oil and Gas heavyweights as it were ONGC and RIL that saved the day for Nifty. ONGC was up 4% while RIL gained around 2% even as some profit taking continued in other heavyweights. Apart from these two heavyweights, action was concentrated on few mid cap counters. GT Offshore remained in demand and gained almost 10% to move past 550. Other sharp gainers were FSL, Orchid Chem, Adi birla Nuvo, BRFL, Moser Baer, Polaris, NFCL, Sesa Goa, Kotak and LIC Hsg. Profit taking trimmed some of the gains of past few days in counters like Maruti, Axis, Patni, IB Real, Aurobindo, Uniphos and Piramal Health. Overall, the undertone was slightly bullish as captured in marginally positive AD ratio. Nifty has done nothing after breaking out above 4640 and is trading around 4650-4700 for past three days. If this is just consolidation we could see a sharp up move above 4710 in next couple of days or otherwise there is a threat of some short term correction, particularly if the market were to trade below 4630 consistently. Either of these scenarios is likely in next couple of days. Since we are in a consistent up trend for past few months, probability of upward breakout is slightly higher. Movement in RIL is also suggesting positive bias as the stock moved above 2040 and also closed above this level. Next technical levels for RIL are 2130 and 2185-2200. Other stocks that are looking positive are ACC, GEShipping, NFCL, PTC (above 93), Sterlite (above 690), LIC Hsg, Educomp, United Spirits and Voltas (above 147). Nifty has immediate support around 4620-4635 and then around 4575-80 while some resistance is seen around 4775-4790.