The confidence vote sparked a massive but short lived jump in prices. The Nifty hit a high of 4539 before sliding down a steep slope to close at 4311.85 points for week-on-week gains of 5.37 per cent.
The Sensex hit a high of 15130 before settling back to 14274 for a gain of 4.69 per cent. The Defty rose 6.7 per cent as the rupee strengthened a lot.
Volumes improved but breadth signals remained negative with declines ahead of advances.
Outside the charmed circle of liquid counters, many small stocks moved negatively. The Junior was up over 9 per cent while the Midcaps 50 rose 10.38 per cent. The BSE 500 was up 5.84 per cent. The FIIs were net buyers while local funds were sellers. Sentiment worsened on Friday after the blasts in Bangalore.
Outlook: We will probably see the Nifty seek support at 4250-4275 in the first couple of sessions next week. The settlement could trigger covering that pushes the Nifty back up till around 4550. One likely scenario is range-trading with extremely high intra-day volatility between 4250-4550.
Rationale: The net rise in prices coupled to volume expansion suggests that the intermediate downtrend that started in early May has ended. But the long term trend is definitely negative – narrow concentrated trading and bearish AD ratios are clear signals. The short-term trend is also down – a very high VIX shows that. If support at 4250 holds, higher troughs and peaks will confirm the intermediate trend reversal.
Counter-view: The short-term signals are negative and if the 4250 support breaks, the downside target could be 4100. On the upside, a breakout would set up potential targets of 4650 – that may come if shorts build up and are covered on Thursday.
Bulls & bears: The most noteworthy trend is that of speculative bullishness in a host of PSU stocks across the refining and energy space such as Bongaigaon, MRPL, Neyveli, Petronet and PGCIL. This persisted. The initially biggest movers were the ADAG scrips, such as Reliance Capital, RNRL, RelPower and even Adlabs. However, these saw sharp selloffs towards the weekend only RCOM held its ground.
Bank scrips also did well towards the beginning of the week and the BankNifty gained 9.8 per cent overall. But the sector plummeted on Friday. ICICI Bank lost a lot of ground and so did several other majors. Reliance Industries turned massively bearish on Friday after Q1 results.
Apart from RIL, banks and the ADAG group, most IT stocks contributed to the sell off. Engineering majors like L&T and ABB also lost ground.
But there were strong pricelines scattered across the entire industry space such as 3iInfotech, Renuka, Sterling Biotech, United Phosphorus, JP Hydro and India Cement. Hind Unilever and ACC also looked perky even on Friday.
The Sensex hit a high of 15130 before settling back to 14274 for a gain of 4.69 per cent. The Defty rose 6.7 per cent as the rupee strengthened a lot.
Volumes improved but breadth signals remained negative with declines ahead of advances.
Outside the charmed circle of liquid counters, many small stocks moved negatively. The Junior was up over 9 per cent while the Midcaps 50 rose 10.38 per cent. The BSE 500 was up 5.84 per cent. The FIIs were net buyers while local funds were sellers. Sentiment worsened on Friday after the blasts in Bangalore.
Outlook: We will probably see the Nifty seek support at 4250-4275 in the first couple of sessions next week. The settlement could trigger covering that pushes the Nifty back up till around 4550. One likely scenario is range-trading with extremely high intra-day volatility between 4250-4550.
Rationale: The net rise in prices coupled to volume expansion suggests that the intermediate downtrend that started in early May has ended. But the long term trend is definitely negative – narrow concentrated trading and bearish AD ratios are clear signals. The short-term trend is also down – a very high VIX shows that. If support at 4250 holds, higher troughs and peaks will confirm the intermediate trend reversal.
Counter-view: The short-term signals are negative and if the 4250 support breaks, the downside target could be 4100. On the upside, a breakout would set up potential targets of 4650 – that may come if shorts build up and are covered on Thursday.
Bulls & bears: The most noteworthy trend is that of speculative bullishness in a host of PSU stocks across the refining and energy space such as Bongaigaon, MRPL, Neyveli, Petronet and PGCIL. This persisted. The initially biggest movers were the ADAG scrips, such as Reliance Capital, RNRL, RelPower and even Adlabs. However, these saw sharp selloffs towards the weekend only RCOM held its ground.
Bank scrips also did well towards the beginning of the week and the BankNifty gained 9.8 per cent overall. But the sector plummeted on Friday. ICICI Bank lost a lot of ground and so did several other majors. Reliance Industries turned massively bearish on Friday after Q1 results.
Apart from RIL, banks and the ADAG group, most IT stocks contributed to the sell off. Engineering majors like L&T and ABB also lost ground.
But there were strong pricelines scattered across the entire industry space such as 3iInfotech, Renuka, Sterling Biotech, United Phosphorus, JP Hydro and India Cement. Hind Unilever and ACC also looked perky even on Friday.
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