Market Outlook 18-08-2009

Markets opened on a strong note but could not maintain the gains as heavy profit booking was witnessed around 5000 levels of Nifty. Nifty in spite of its best attempt could not maintain above the crucial 5000 level. Reliance was the primary culprit for the weakness as it lost around 3.96% because of the huge treasury sale. All the petro stocks namely HPCL, BPCL and IOC were the major losers. The major gainers were surprisingly the airline stocks namely Kingfisher and Jet Airways. Jindal Saw continued its momentum as it closed higher at Rs.742 which was a strong 7.69% appreciation. We are of the view that markets might pause at these levels for some time and hence one should not add fresh long positions at current levels. It would be better to wait for a small decline or a closing above 5000 levels of Nifty for fresh additional positions. Select madcap stocks would continue to outperform the market. A PRUDENT STRATEGY AT THE CURRENT LEVELS OF THE MARKET WOULD BE TO BOOK PARTIAL PROFITS AND ALLOW THE MARKET TO CROSS THE 5000 LEVEL OF NIFTY FOR FRESH ADDITIONAL POSITIONS. Nifty will face resistance around 4995-5010 levels whereas it has strong support around 4945 and 4910 levels.