Stock Markets At A Range-Bound

The Indian stock markets opened on a flat note and traded with a positive bias for the entire trading session to close higher by almost 45 points. The second day opened with a gap-up, experienced tremendous selling in the first half in the form of a gap filling, but recovered intraday to close higher. The third day opened positive, gave a trend line breakout at 5310 levels, but somehow could not sustain the breakout and ultimately closed lower. On Thursday the stock market again succeeded in giving a breakout but was not justified. Amongst all the NSE India and BSE India stocks, Coalindia, Maruti, Kotak bank and Tatamotors were at the forefront to beat Nifty. On the other hand ACC, Bhel, Jpassociates, Relinfra and Hindalco were the worst performers. Auto sector performed the best. The last trading day recorded highest volatility to close lower by 0.78%. M&M performed best and IDFC was the worst. Amongst all NSE BSE sectors, Realty, Infra, Banking and Energy sectors were responsible for the fall in the stock market.

Rupee broke its three months low last week with multiple conditions hindering its value. Rising prices of oil imports, slowing growth, fear of Euro zone debt crisis and increasing current account deficit were the major reasons. Moreover RBI intervened by announcing repo rate cut by 50 bps.

In the bullion front, Gold market is expected to gradually lift its head up with India heading towards Akshaya Tritiya festival. However, the simultaneously growing prices and rupee devaluation have refrained investors from investing.

The repo rate cut by RBI will act as a ray of hope to all realty sector investors. The investors have already started their property investing journey with a hope that all the commercial banks will also reduce the lending interest rates soon.

What Next.....

We had mentioned of 5300-5310 as our trend line breakout level for Nifty. Though the Nifty prices have managed to give a breakout at these levels, the price movement and the traded volumes are not justifiable. So we prefer to wait for a bigger candle breakout with rising volumes. Currently the Nifty has given a stochastic negative crossover just below the overbought zone so we expect some more correction up to 5200 to 5170 in the first place. However, on the weekly charts the Nifty has recovered the whole fall which it had given last to last week. Moreover, we cannot ignore the stochastic positive cross over and a kind of penant pattern in the making. So investors are suggested to enter only when the last week high i.e. 5343 levels up to our next resistance at 5379 is broken.