Archives : IIP Data Fails To Cheer The Market - 12/03/2010

IIP DATA FAILS TO CHEER THE MARKET – 12/03/2010.

ECONOMY ON STRONG GROWTH TRAJECTORY.

ALL EYES ON RBI.

TECHNICALLY SPEAKING.

INDEX LEVELS.

LAST WEEKS RECOMMENDATIONS.

THIS WEEKS RECOMMENDATIONS.

WATCH OUT FOR.


IIP DATA FAILS TO CHEER THE MARKET – 12/03/2010.

ECONOMY ON STRONG GROWTH TRAJECTORY.

Strong IIP numbers for the month of Jan 2010 failed to enthuse the market. Industrial growth figure for Jan came in at 16.7% v/s 1% last year. The high Jan growth figure came on the back of strong Dec growth figure of 17.6%. Such month on month strong growth figures are proclaiming that our economy is now firmly on growth track. If we compare the last nine months IIP number i.e. from April 2009 to Jan 2010, then the Industrial growth is well over 9.6% which is three times the growth 3.3% of last year. There is every possibility that the GDP will be revised upwards. One can safely infer that the steps taken by the government to stimulate the economy are now bearing fruits.

ALL EYES ON RBI.

Once again the spotlight has now shifted on the RBI as such high growth in a rising inflation scenario, further adds to the worry of inflation. The role of RBI is shifting from that of managing recovery to managing growth. As can be seen from strong growth figures for the month of Dec and Jan, all eyes are now set on the RBI meet in end April. It won’t be a surprise if the RBI is now forced to act and increase the interest rates or the CRR. Nonetheless, it is an interesting and challenging situation to be in for the RBI.

TECHNICALLY SPEAKING. 

The Sensex opened the week at 17034, made a high of 17244, a low of 17027 and closed the week at 17166. The Sensex closed the week with a gain of 172 points. Similarly Nifty opened the week at 5092, made a high of 5158, a low of 5092 and closed the week at 5137. The Nifty too closed with the week with a gain of 49 points.

 

Both the indices have formed a small white body on the weekly charts which is almost a neutral formation. Even on the daily charts on Friday, Sensex has formed a Doji whereas Nifty has formed a neutral formation and hence the direction of the immediate movement of the indices will be dependent on the candle formation next week.

 

The momentum oscillators like the RSI and ROC are in Buy mode, whereas the MACD already in Buy mode has entered positive territory. The TRIX as well as OBV have given Buy signal.

 

The short and medium term trend is up as the Sensex and Nifty are above the critical 50dma and 100dma. Sensex (50dma – 16813 and 100dma – 16795) and Nifty (50dma – 5013 and 100dma – 5020) are almost coinciding and the market will find support in case of a fall around Sensex 16800 and Nifty 5000. The long term uptrend remains intact as the market remains above the 200dma (Sensex – 16084 and Nifty – 4793).

 

Both the indices have formed a Bullish Reversal pattern known as Inverted Head & Shoulders pattern. As a result of this, the Sensex has a target of 17319 and Nifty 5189.

 

Nifty OI PCR is showing signs of exuberance at 1.62, which is indicative of the strong bullish mood that the market is in. Call writing is seen at 5200, which supposedly should act as resistance going forward. Strong Put writing is seen at the strike of Nifty 5000, which should provide strong support in case of a fall.

 

For the week ahead, Sensex will find Support at 17027-16820-16635 and will find Resistance at 17290-17493-17735.

 

For the week ahead, Nifty will find Support at 5092-5020-4943 and will find Resistance at 5181-5242-5298.

 

INDEX LEVELS: 

 

 S3S2S1CLOSER1R2R3
Nifty4943502050925137518152425298
Sensex16635168201702717166172901749317735

LAST WEEKS RECOMMENDATIONS:

STOCKReco. PriceTgt ReachedLot SizeProfit
JSWSteel1196  12261231412Rs.14,420
Bhushan174317951789500Rs.23,000
Educomp714733742375Rs.10,500
McDowell148915261513250Rs.6,000
Grasim281329012915176Rs.17,952
    TotalRs.71,872

THIS WEEKS RECOMMENDATIONS:

 

 

STOCKCMPSLTgt-1Tgt-2
Buy HindZinc1250123612771301
Buy Cairn276270285294
Buy JindalSaw215211222230
Buy SterliteInd827811849870
Buy M&M 1140112511681190

WATCH OUT FOR:

Hind Zinc 

Cairn

CrewBOS

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