Yesterday market will be waiting for the election results from states and if non incumbency vote is not seen and the results are in favour of ruling party, than an up move may be seen. Today it was a disappointing day for the market as poor performance of the manufacturing and mining sectors pulled down overall growth of industry to 7.8% in 2010-11 from 10.5% in the previous fiscal. It only shows that Reserve Bank of India is expected to continue with its "anti-inflationary stance' to rein in inflation which is just now under 9 percent against the central bank's target rate of 5-6 percent. Now one can expect another round of a 50 basis point hike in the market.
As we can see from the analysis of the volumes, it clearly emerges that there is lack of interest from market participants and thus markets should remain range bound in the near-term with a slight negative bias. However stock specific action will always take place and thus get benefit with hotstocks and make money daily in stock market. Spot Nifty is expected to get support at 5,420. The May futures of Bank Nifty are expected to face resistance above 11,150 and volume-based support at 10,670. The market breadth was extremely negative, with about 2 shares declining for every share that advanced on the BSE. Caution is the buzz word on the stock exchanges as market is trading with a negative bias.
The Nifty has closed below 5500 and if do not recover above 5500, than we see Nifty closing below this level; it may lead to intense selling pressure and Nifty can find support at 5440 level. On the positive side one will see short covering happening in the market if Nifty closes above 5650-5670. Markets are trading in a range and thus a technical bounce is due till 5650 - 5700 is due. Technically the market seems to be gathering energy for a directional move either up or down. Thus straddle is a correct strategy for the traders to make money in share market.
Commodity & Forex Tips
China's weaker-than-expected industrial output data has led some investors to worry about a sharp slowdown and reduced demand for commodities, while others felt it would ease the need for further aggressive tightening and thus conflicting signals are available from the global markets. Once the dollar basket stops going down, all risk assets will start getting hit including emerging markets, gold, silver and the whole commodities space. All the risk assets are going to come under pressure.
Among commodities, crude for June delivery is sliding $2.13 to $96.08 per barrel and June gold is declining $19.2 to $1482.2 a troy ounce. Crude remaining below $100 is very positive for the global markets and India in particular.
Support and Resistances for the Day
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Strong future shares at National stock exchange
Bata India, Hind Uni Lvr, Exide Ind, Max India, Sintex Ind, Glaxo, Ranbaxy, BPCL, India Info & Tulip.
Weak future stocks at NSE
LITL, Renuka, SRE Infra, Patni, Bank Of India, IRB, IDFC, Vijaya Bank, GT Off Shore & Rel Media.
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