Market Outlook 22-10-2009

Market remained under pressure throughout the day as heavyweights witnessed some selling. Even the mid caps that had seen a strong run in past few weeks came under profit taking spell, particularly in the later half. Banking and Sugar counters also lost ground after having moved up sharply in past few sessions. In fact most of the counters that had seen a sharp run up came under selling pressure. The losers list for the day is a testimony to that as it includes Sesa Goa, Triveni, Bajaj Hind, Balrampur Chini, Piramal Health, Divis Lab, HCC, APIL, Aurobindo, Ind Bank, BOB and Lupin.( all losing more than 4%). Canara Bank bucked the overall trend in banking as it raced to new high, gaining almost 4%. But the limelight of the day was Polaris as it shot up by more than 16% after it announced good quarterly numbers. Some of the other gainers were JSPL, HCL Tech, FSL, Mphasis and Opto Circuits. Overall, the sentiment was subdued and the breadth was negative. Nifty seems to be following a similar pattern that it has followed for past 3 months now. It makes new high and then trades around those highs for a few days as it absorbs profit taking at new levels. It happened after it broke past 4650, then around 4950 and now around 5100. The crucial support level is now placed around 4950-60 and till the time this is breached convincingly, market would continue to be in up trend. Certain IT counters like HCL Tech, FSL, Patni and Mphasis are looking good and could surprise on the upside. ABB attempted a breakout above 825 but failed to sustain above 825 due to the overall negative sentiments. Sustained trade above 825 again could take the stock higher to around 845 and 875. Unitech is likely to target 116 and 123 if trades consistently above 108. Other stocks that retain bullish bias are JSPL, GSPL, HDIL (above 411), IB Real( above 297), GVK Power, LIC Hsg, Colgate(above 703) and KFA. Nifty now has immediate support around 5025-30 and then crucial one around 4960 while resistance is seen around 5115 and then 5180.