As we had stated yesterday that if the level of 5339 is respected a relief rally will be seen and we saw the short covering and it touched the resistance mentioned in the post yesterday. Now we can revise the support level to 5369 which if held means that we can see recovery to the 5445-5477 levels. On the positive side we find that a number of technical indicators point to an oversold situation and thus we can see Nifty rising to the levels of 5450-5520 where it will again encounter resistance. Thus make use of the hot share and make money making a daily habit as success begets success. Once has to taste the water to know the flow of the water as being on the sidelines do not make sense and take a firm decision in life.
As a nation we feel proud that Christine Lagarde, French Finance Minister has stated and we quote "China, Brazil and India are an absolute necessity. I would certainly prefer to be endorsed by a very large majority rather being the European candidate pushed by the Europeans." This speaks of the importance of India as a nation as we are no longer growing but have already emerged at the global scenario.
Short covering in heavyweight stocks on the expiry day of derivative contracts and better-than-expected results from a few blue-chip companies helped lift the Indian market sharply higher on Thursday. However only element of circumspection is that open interest is lower in the next cycle and volume has been continuously trending downwards specially in the cash segment as well. Moreover Foreign institutional investors (FIIs) have sold equities worth $1.74 billion (Rs 7,791 crore) in the Indian markets in the month of May and this data is by virtue of compilation from Securities & Exchange Board of India. In worst scenario, if the level of 5339 is breached with conviction than market can fall to the level of 5150-5100 and if it happens on closing basis than a psychological support of 5000 will be under threat.
Analysis of derivative segment data suggest that telecom, textile, power, FMCG & cement sectors stocks have showed strong rollovers whereas pharma, auto, fertilizers and banking sector stocks have showed weak rollovers. and thus these can be leading indicators for stocks which can be used to go long in the market or go short.
One can get the direction of stock market by observing the copper price as it is an early indicator for the market trend. As of now copper is at 200-day moving average which is acting as a support and if copper rallies, we may see global markets rising with a vengeance and if 200 DMA breaks than the fall continues.
Support and Resistances for the Day
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Strong future shares at National stock exchange
Dish TV, Hero Honda, Asian Paints, Dabur, Ranbaxy, Mundra Port, OFSS, Zee ltd, Titan & JP Power.
Weak future stocks at NSE
Balrampur Chini, KS Oils, Patni, Jindal Saw, Orbit Corp, Reliance Media, Vijaya Bank, SRE Infra, SBI & Aurobindo Ph.
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