Market Outlook 24-09-2009

Markets remained steady for most part of the day before shedding some weight in the last 45 minutes of trade. Profit taking was seen a day ahead of the expiry of September series of derivatives. Add to the fact that we have a truncated week ahead on account of couple of holidays and this correction looks normal and routine. JP associates led the list of declining stocks as it slid by over 6% on huge volumes. Others that suffered setbacks were the usual suspects like Realty stocks and other momentum counters like Suzlon. A few banking counters continued to enjoy the backing of traders and investors. IOB topped the list with more than 7% rise. Other gainers were Federal Bank, Uco bank, Dena Bank, JSW Steel, Piramal Health and Ashok Leyland. The undertone was bearish as reflected in the AD ratio that had almost 3 declining issues for each advancing one. Nifty had a slight break in its up trend as level of 5000 attracted some profit taking. As of now it could be attributed to expiry and long weekend. A small part of the nervousness can also be attributed to US Fed comments (later during the day) on the health of the economy as well as on the future direction on interest rates. 4850-60 continues to be strong support in the short term and only a close below 4850 would need a serious re-look at the current up trend. Federal bank seems to have broken out and could target 285-290 in coming sessions. Praj is facing a lot of resistance around 106-107 and a breakout might lead it towards 122-125. Zee is also showing signs of a positive breakout and could target 242- 245 if it sustains above 221.Metal stocks could come under pressure in the short term. Some other stocks that could head higher are Biocon, Aurobindo, GSPL (above 81) and ITC. Nifty now has immediate support around 4910-15 and then around 4845-55.