Sunday brought a much suprised good news for Indian economy in a form of patch up stitched between two warring brothers and owners of two major business houses of the country- Reliance Industries and Anil Dhirubhai Ambani Group (ADAG).
Indian stock markets too reacted positively to the development and had a gap-up opening of about 1.5% each. The markets further made their way up and at one time Nifty was trading above 5000 mark which gave hope to the participants of a consolidation around those levels. But with soft opening in European bourses, markets started loosing its ground and finally closing the day at 4943.
The provisional data released by exchanges indicate selling of around 1000 crores by FIIs, though, it is ably supported by a buy of around 1100 crores by Domestic Institutional Investors (DIIs). It should be noted that FIIs have already sold equities worth 11000 crores in the month of May, which should be a concern for the Indian stock markets.
Another positive factor that might have drived the markets up was "Short-covering". The markets have lost almost 7-8% in this month and it was widely expected that some of the short positions in May series will be covered which can help Nifty move beyong 5000 levels. The initial part of the day saw some of the shorts being covered, but Europe soft opening triggered the fresh round of short positions created in the markets. Though, there are certain indications of short covering happening around 4930-4950 range, which should act as mild support for the markets.
US markets have opened up soft and European markets too have been trading in a narrow range. If the trend persists, we might see a flattish kind of opening for the markets. 4870-4890 should act as a good support level for the Nifty. On the upper side, 5030-5050 acts as a strong resistance. For tomorrow, traders should maintain caution and wait on the sidelines till markets take a definite trend.
If Nifty able to breach 4870 levels on the downside, then traders can open short positions with stop-loss of 4925 and target of 4770. Whilst if Nifty goes up and breaches 5030 on the upside, one may sell Nifty with Stop-loss at 5080 and target price of 4925.
No stock-specific recommendations for now. The previous recommendations for Maruti, Sterlite and Cipla remain intact.
Before we close the article, a note of caution. Many a times we try to do bottom fishing especially during times when markets seem weak and suddenly we see markets rebounding and we end up with nothing in our hands. By now we all know that markets are weak. Almost every analyst is giving bolder levels on the downside. JM Financial has even talked about Nifty @ 4100 in the medium term. But the fact remains is "nobody knows it". Hence, it is advised to pick good quality stocks at every correction.
Another piece of statistics before I close the article. In last one year Dow Jones has actually outperformed Sensex by around 10%. Seems strange!!!! Yes... But its true....
Wishing you a great trading day tomorrow!!! Good night...
Indian stock markets too reacted positively to the development and had a gap-up opening of about 1.5% each. The markets further made their way up and at one time Nifty was trading above 5000 mark which gave hope to the participants of a consolidation around those levels. But with soft opening in European bourses, markets started loosing its ground and finally closing the day at 4943.
The provisional data released by exchanges indicate selling of around 1000 crores by FIIs, though, it is ably supported by a buy of around 1100 crores by Domestic Institutional Investors (DIIs). It should be noted that FIIs have already sold equities worth 11000 crores in the month of May, which should be a concern for the Indian stock markets.
Another positive factor that might have drived the markets up was "Short-covering". The markets have lost almost 7-8% in this month and it was widely expected that some of the short positions in May series will be covered which can help Nifty move beyong 5000 levels. The initial part of the day saw some of the shorts being covered, but Europe soft opening triggered the fresh round of short positions created in the markets. Though, there are certain indications of short covering happening around 4930-4950 range, which should act as mild support for the markets.
US markets have opened up soft and European markets too have been trading in a narrow range. If the trend persists, we might see a flattish kind of opening for the markets. 4870-4890 should act as a good support level for the Nifty. On the upper side, 5030-5050 acts as a strong resistance. For tomorrow, traders should maintain caution and wait on the sidelines till markets take a definite trend.
If Nifty able to breach 4870 levels on the downside, then traders can open short positions with stop-loss of 4925 and target of 4770. Whilst if Nifty goes up and breaches 5030 on the upside, one may sell Nifty with Stop-loss at 5080 and target price of 4925.
No stock-specific recommendations for now. The previous recommendations for Maruti, Sterlite and Cipla remain intact.
Before we close the article, a note of caution. Many a times we try to do bottom fishing especially during times when markets seem weak and suddenly we see markets rebounding and we end up with nothing in our hands. By now we all know that markets are weak. Almost every analyst is giving bolder levels on the downside. JM Financial has even talked about Nifty @ 4100 in the medium term. But the fact remains is "nobody knows it". Hence, it is advised to pick good quality stocks at every correction.
Another piece of statistics before I close the article. In last one year Dow Jones has actually outperformed Sensex by around 10%. Seems strange!!!! Yes... But its true....
Wishing you a great trading day tomorrow!!! Good night...
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