Market Outlook 12-08-2009

It was a volatile day for the markets. Markets opened on a neutral note but then gained momentum as the day progressed as Nifty crossed 4500. But again nervousness gripped markets at higher level as Nifty suddenly lost about 70 points from its intra day high before finding some support to close around 4470. Auto stocks were the top gainers as some buying returned to these counters after a sharp correction of past 3 days. Tata Motors was the top gainer followed by M&M and Maruti. Other Index gainers were Hindalco, Bharti and Tata Power. However index heavyweights like NTPC, HDFC, ONGC, Wipro, JP Associates and Icici bank lost ground. Outside the index major gainers were Cummins, TV18, Tech Mahindra, GVK Power, BRFL, Bharat Forge, Ashok Leyland, HDIL, Aban and Bajaj Hind. Losers included Zee, Patel Engg, MRPL, Indian Hotels, Biocon and Patni. Volumes were on the lower side while breadth was marginally positive. Nifty managed to bounce back from just around 4400 thereby managing to stay above the support levels at 4375-80, at least for the time being. But higher levels are proving to be difficult to sustain as once again selling was seen around 4500. So, for now we have crucial supports at around 4370 while crucial resistance is seen around 4525-4540. Market could gain momentum if it manages to stay above 4540 thereby resuming the uptrend after a brief corrective move to 4400. But on the other hand, as mentioned yesterday also a decisive break below 4370 could open up lower targets of around 4160-75. Few stocks have given fresh breakouts and could seek higher levels, particularly in stable market. GVK Power has closed above 46 and sustained move above 46 could take it higher to around 51 and even 55 in coming days. Bajaj Hind moved past 188 and closed above it. It has some resistance around 195-97 beyond which it might target 220 and 235. Other positive stocks are Aban (above 1125), JSPL (above 2885), Ranbaxy (above 274), Jindal SAW, Tata Chem, Hindalco, Unitech (above 89.50) and Suzlon. Nifty has immediate resistance around 4515-30 while support has emerged around 4430 before the crucial one at 4370.