Mkt Outlook

Hi Friends,

Markets set to open lower based on global cues.If we analyze the nifty levels now the chart present an outlook favorable just for bears in medium term.Perhaps no other technical indicators have that much significance for a technical analyst as is averages.Markets in EOD charts are unable to close above 100DMA and this is a sign of huge caution.A close above 100 dma can target 50 dma.But below 100 dma chances of the markets retesting the 200 dma is bright.Technically the nifty was unable to move above 53% retracement levels of its fall.Chances are bright of nifty hitting 4960 levels all over again.We wont advise aggressive trading positions in nifty and will advise traders to trade with strict sl and be more in day trades then in leveraged btst or stbt trades.Large cap stocks are not able to perform in the markets.Not even a single large cap stock was able to hit a new high in the recovery which is disturbing.We had written an article on 1st of january.We will request traders to go through the article once more.We never expected that the bearish analysis will work 100% and that also in just 3 weeks after the caution news was sent.

We wont discuss about 2007 and the great returns it gave.What we will be discussing about is what the chart of the nifty as an index and the major components of nifty say going ahead.We believe the focus should shift to protecting money.We will try to keep traders updated about what should be the way going ahead.As of now its ripe time to book profits in penny stocks. We have seen it time and again that stocks like Dynacons, Gv films and ikf technology and many more such stocks play with public settlements at the last stage of the bull run.These are known penny stocks in the market and we strictly advise traders to book out of these stocks.Now the million dollar question is what should one do in the Long term picks given by Team stockresearchers that have doubled and tripled in months after the call was given.We update subscribers time and again when the stocks should be booked.We have given partial profit booking calls recently on andrew yule( cmp 79 given at 25) hfcl(cmp 43 given at 24) and jayaswals nec( cmp 60 given at 17).We believe that its ripe time to take some profits home.We dont know whether we will see such a stellar equity performance going ahead in 2008 or not.

Do remembers even if this bull market continues in 2008 we will surely see a leadership change in the marketsThere is a large number of issues that remains unanswered.Outcome of the UPA,LEFT talks about nuke deal.Resurgence of Inflation pressures by food commodity and oil pricesA populist budget.A stagflation in USARupee appreciation.instability in south east Asia( Pakistan,Bangladesh & Myanmar) There is no point discussing these issues in details as someone has rightly said in a BULL market every negative news is already discounted.The only reason why we have posted something like this is because we believe that an earnings upside is not only essential but also necessary for the momentum to continue in the markets.If we do not see an earnings expansion going ahead in Nifty,a very likely outcome is of a marked under performance in nifty. Nifty expectations.Dont expect huge upside in Nifty and the broader markets in general in 2008.We believe that markets should consolidate as India is not independent of global cues.It seems that everything is sunny and green but there is a marked under performance in large cap stocks.Some movements in large cap stocks does worry us.We believe that the non participation of FII's might be a reason for the non performance of large cap stocks in last two months.

Do remember that in any bull market the major support comes at 200 dma which in our case is at 4702 levels.Avoid leveraged positions is all we can say.

ABB>> There is no doubt that there is great future for power equipment stocks.It seems that every story has a price and as mentioned in the start of the newsletter earnings upside in this quarter is a must.Technically the stock is weak after hitting a high of 1700 levels.can take support around 1400.lnt,bhel>>>Both are looking weak in eod charts.lnt has made a double top in eod charts bhel also has huge resistance at 2930 2900 zone going ahead
RCOM IDEA AND BHARATHI>>Rcom has formed a triangle of 200 rs and should signal a breakout or a breakdown based on the spectrum issue.Bharthi has given a breakdown in charts and might give a breakdown in future.Idea is weak going ahead.It has made a double top in 161 levels and we expect that the highs will hold for a good amount of time.Siemens>>stock is consolidating at 1900 levels.Can give a breakout and a breakdown going ahead.
RELIANCE>>a large cap stocks that makes me worry is reliance.The company is struggling since past 2 months for a move past 3000 levels.The show of strength by reliance in past is missing.We remain optimistic about the stock.
REL>>> The only stock that has shown good movement in past three months.We believe that the reason was the rel power ipo and we might see "Buy on rumors and sell on News " in this stock.
Infosys,tcs and IT stocks>>The results till last quarter of I.T companies in past two quarters were above expectations due to the hedging cover of these companies.we believe that there is more trouble times going ahead in I.T stocks.
Cement Stocks >>. The cement stocks might lead any fall going ahead in markets.A fall below 950 in acc will support over objective.
Steel stocks>> The real strength of the bull run is due to the steel stocks .the sector has been highly bullish in the past and we expect the sector to outperform the broader markets going ahead. Going ahead have an eye on valuations.Sail has made a double top at 293 levels in nifty eod charts.tata steel is showing good movts.Stock has to close above 950 for a convincing movement in future.
Tata Motors,MnM and Maruti>>> Tata motors chart is not worth looking.the stock is taking support at 650 680 zone and is finding resistance at 750 levels.Maruti also has a double top at 1224-48 zone.MNM charts are the best among all of them.
NTPC>>> company has reacted sharply since making a new high of 283.We believe that these highs should hold going forward and the stock might oscillate in a 220-60 broader range.
Tata Power>>>> the company is trying to breakout of the double top created by it.We believe that the rise was phenomenal but valuations should be considered going ahead.
Unitech>>>>>When compared to global peers large cap real estate players looks decently valued.We strongly say for large cap real estate plays, "UPSIDE IS CAPPED".
IOC&BPCL>>>>>>>> UPSIDE POSSIBLE AND LIKELY IN THESE OIL STOCKS GOING AHEAD.
To summarize look out for new sectors that might lead the bull run like oil stocks as traditional stocks are looking tired.Best is to remain cautious with focus of protecting what you own.