Despite a positive start to the holiday-shortened week, the Sensex ended with marginal losses owing to selective profit taking. Markets witnessed stock-specific activity because of derivatives expiry-related cues. The Sensex neared the 17,000-mark during the course of the week as the index touched a high of 16,943 on Tuesday. However, after slipping to a low of 16,495, the index finally ended the week with a marginal loss of 48 points at 16,693.
Among the index stocks - Maruti and SBI jumped over 11.5 per cent each to Rs 1,641 and Rs 2,139, respectively. HDFC, Sun Pharma, HDFC Bank, Tata Motors, DLF and Grasim surged 7-9 per cent each. Bharti Airtel and ONGC, however, were down nearly 2 per cent.
The market will continue to remain up as long as the Sensex holds the 16,400 level. A breach of this level could see the index drop towards 14,800. Next week, trading activity may remain low owing to holidays at the start and end of week - Dussehra and Gandhi Jayanti, respectively. Expect the index to move more or less in the range of 16,970-16,400 unless there is any major external influence.
The Nifty regained the 5,000-mark on Tuesday after a gap of 16 months. The index after touching a high of 5,036, slipped to a low of 4,904. It finally settled with a loss of 17 points at 4,959.
The Nifty is currently in the rising channel and may find considerable support around 4,825, which is also its short-term (20-day) daily moving average (DMA). The medium-term (50-day) DMA is at 4,655.
Next week, the index may find support around 4,910-4,890-4,875 and resistance around 5,010-5,025-5,040.
Call and put options
Very good and elaborate analysis...but i think this is not good for stock marketer i think the average trading level of nifty 5800-5900.i think nifty's trading level growth fully depend on industrial growth..so I really appreciate it and you have shared very valuable blog. We can utilize and i would like to thank to you a lot for sharing this.
Hi Rex,
I expect NIFTY fall of 15% from peak of 5200 to 4300 by Nov-end or Mid dec'09 based on back testing of mean reversion to the 200 DMA. ( i have taken data for last 18 years that captures the 12 market tops)
have added detail analysis on my blog site httt://saanpaurseedi.blogspot.com
would like to know your views.
Regards
djvu
Hi BG Shirsat,
agree with your view.
One point that further adds more weight to your view on high valuations is "Quality of Growth". For eg. Larsen PAT growth was 60% in FY09 but CFO ( Cash flow from operations) fell 24%.
have added detail analysis on my blog site httt://saanpaurseedi.blogspot.com
Regards
djvu
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