[T.S.R:10857] weekend report

Road Ahead For September, Sectors & Stocks

Flashback Aug'2009

The Aug series opened at 33,460 cr. as against 29,483 cr. last month, wherein the Nifty future was 11,345 cr. and Stock futures were 22,115 cr. compared to Nifty Future 9,668 cr. and Stock Future 19,818 cr. last month. The rollovers in the Aug series were healthy as the quarter results were very positive and the global market trend was also very strong.

During the first week of Aug we saw the Nifty touching a new 2009 high of 4,731 but the markets could not sustain the higher level and corrected sharply. This correction lasted for some time where we saw nifty correcting at-least 8% from the intermediate top. But in the third week of Aug we saw the markets taking a U-turn on the day of Adani Power listing. It did not see any extraordinary listing. It listed at Rs 105 on the BSE and closed just near to the issue price of Rs. 100.

Huge buying continued from 20th Aug and major action was seen in the midcap and small cap stocks which kept the momentum going. The main reason for the uplift of the market could be to keep the market mood strong for the forthcoming NHPC listing. The GDP numbers for the first quarter were announced stood at 6.1% versus growth of 5.8% in the previous quarter and 7.8% in Q1 of last year. There was huge volatility seen in the Indian market on the back of selling witnessed in the Chinese markets. But the out-performer was auto, IT and real estate counters. For the month both the indices closed up 3%. During the Aug month, the FIIs remained net sellers of Rs. 3,767 cr. while domestic institutions were aggressive net buyers of Rs. 4,984 cr. which kept the momentum going.

 

Road ahead Sept'2009

The Sept series opened at 35,613 cr. as against 33,460 cr. last month, where in the Nifty future was at 11,852 cr. and Stock futures were at 23,761 cr. The Sept month once again continues to be a challenging month as markets are trading at the higher end of the channel from where we have seen huge selling pressure emerging in the Aug month. NHPC, India's largest hydro power generator, disappointed the street on its debut. It started at Rs 39 on the BSE and traded around Rs 37 for majority of the session and closed at 36.70.

Both Adani and NHPC have disappointed the streets and going forward we see very less positive surprise for the market. The short-term trend remains cautious as the global markets are also not showing any positive signs and the rising commodity prices and draught situation will remain a great concern.

The Chinese market, Shanghai Comp which is creating lot of turmoil for the entire global market is currently giving a strong bearish signal. The 200-day moving average is placed at 2,470 and the index is currently at 2,680. The short-term outlook looks very pathetic and in the near term we could see 2,300.

The outlook for Sept series remains slightly cautious as global markets are not healthy and the major two IPO which got listed were very disappointed. The markets may now enter a consolidation phase over the medium-term. The long term view looks very attractive and we don't see the Indian markets correcting very sharply and falling below 4140/13900 levels. In the medium term 4350/14600 should act as a very strong support where investors could think of entering the market. And on the higher side 4730-4770 remains a supply zone, unless markets sustain above these levels for some time, fresh buying should be avoided.

SECTOR TO WATCH - AUTO SECTOR

Auto stocks are giving strong evidence of a major breakout happening. The Aug sales numbers were robust for some of the auto stocks. The two wheeler and small car segment is further supported by recent reduction in interest rate by banks and the festive season coming forward which will drive the demand in coming months. Stocks like Tata Motor could be bought in the correction around 450-425 levels, M&M around 780-720 and Maruti around 1360-1240 from an investment perspective.

 

Midcap Radar

Stocks like Bharti Shipyard, Bajaj Hind, Godrej Ind, ICSA, IRB, Exide Ind, Essar Oil, United Phosp and Mcdowell looks a great buy on dip from an investment perspective.

 

NIFTY FUTRUE DAILY CHART:

The short term trend looks slightly cautious as huge selling pressure is witnessed above the 4,700 mark. Strong support is at 4,550 if this level gets breached with huge volume then there is a greater chance that nifty could go in for a larger correction. The next support comes around 4,360-4,330. Resistance at 4,730-4,770.

 

 

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