India Stocks Outlook: Volatile next wk on Aug F&O contract expiry
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SUKUHOPES
Aug 23, 2008, 12:54:19 AM8/23/08
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India Stocks Outlook: Volatile next wk on Aug F&O contract expiry
Trade is likely to be volatile next week on rollover of positions
ahead of the expiry of August derivatives contract Thursday, but the
bias remains positive as genuine buying was seen in yesterday's
session.
Domestic institutions have turned buyers and selling by foreign
institutional investors is slowing down.
"Market is looking good till futures expiry. It (Nifty) can move
up to 4600 level till Thursday. Nifty breached 4330 yesterday, which
was a major resistance, and next resistance is seen at 4480 and then
at 4640.
However, we expects any bounce-back to be limited, as Nifty would
face "stiff" resistance around 4440 level.
For the last couple of weeks, Nifty was consolidating in the
4625-4250 range, and is currently trading near the lower end of the
range. As intra-day momentum oscillators are oversold, one can expect
a minor bounce-back, which should be used as a selling opportunity or
to exit long positions.
As long as Nifty remains below 4440, we advises caution and
recommends exiting positions on any rise and believes that only if the
index closes above 4440 can one re-enter or take a fresh long
position.
Nifty closed at 4327.45, up 43.60 points or 1% from Thursday.
Sensex ended at 14401.49, up 157.76 points or 1.1%.
Shares of power and capital goods companies will remain in focus,
as several countries in Nuclear Supplier's Group are registering their
reservations on the waiver proposal for India.
It is unlikely that a verdict will be out at yesterday's meet as
the NSG is likely to meet again in early September to reach an
outcome.
We think the (nuclear) deal will go through. If that happens,
capital
goods, Larsen & Toubro, NTPC...all these stocks will move up.
We are also positive on Reliance Industries and Hindalco
Industries, as the rollover in these stocks has been above the six-
month average.
N.Sukumar
Research Analyst.
Trade is likely to be volatile next week on rollover of positions
ahead of the expiry of August derivatives contract Thursday, but the
bias remains positive as genuine buying was seen in yesterday's
session.
Domestic institutions have turned buyers and selling by foreign
institutional investors is slowing down.
"Market is looking good till futures expiry. It (Nifty) can move
up to 4600 level till Thursday. Nifty breached 4330 yesterday, which
was a major resistance, and next resistance is seen at 4480 and then
at 4640.
However, we expects any bounce-back to be limited, as Nifty would
face "stiff" resistance around 4440 level.
For the last couple of weeks, Nifty was consolidating in the
4625-4250 range, and is currently trading near the lower end of the
range. As intra-day momentum oscillators are oversold, one can expect
a minor bounce-back, which should be used as a selling opportunity or
to exit long positions.
As long as Nifty remains below 4440, we advises caution and
recommends exiting positions on any rise and believes that only if the
index closes above 4440 can one re-enter or take a fresh long
position.
Nifty closed at 4327.45, up 43.60 points or 1% from Thursday.
Sensex ended at 14401.49, up 157.76 points or 1.1%.
Shares of power and capital goods companies will remain in focus,
as several countries in Nuclear Supplier's Group are registering their
reservations on the waiver proposal for India.
It is unlikely that a verdict will be out at yesterday's meet as
the NSG is likely to meet again in early September to reach an
outcome.
We think the (nuclear) deal will go through. If that happens,
capital
goods, Larsen & Toubro, NTPC...all these stocks will move up.
We are also positive on Reliance Industries and Hindalco
Industries, as the rollover in these stocks has been above the six-
month average.
N.Sukumar
Research Analyst.
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