Market Outlook for 23.12.08

Corporate Announcements:
· Unitech is planning to raise Rs. 50 bn through issue of securities. (BS)
· Cairn India has made oil and gas discovery near its existing field in Rajasthan. (BS)
· ONGC, BHP-Billiton-GVK Power combine, and the Reliance Industries-BP Plc joint venture signed contracts for exploring for oil and gas in 44 areas, committing USD 1.5 bn in investment. (BS)
· BHEL bagged a Rs. 11.75 bn contract for setting up a 500 MW thermal power plant at Bina in Madhya Pradesh. (BS)
· IVRCL Infrastructures & Projects issued 2,000 secured redeemable non-convertible debentures of Rs. 10 lakh aggregating Rs. 2 bn to LIC. (BS)
· Parsvnath Developers is in the process of acquiring land for SEZ at 11 locations across India. (ET)
Economic and Political Headlines:
· The insurance reforms bill is represented with a proposal to increase the cap on FDI in private companies in the sector from 26% to 49% and allowing state-owned general insurance companies to raise funds from capital markets. (BS)
· The trade ministry said that India has lifted a ban on cement exports, as price pressures eased and domestic demand is depressed due to a slowdown in construction activity. (Live mint)
International News Headlines:
· China reduced the one-year lending rate to 5.31% and the deposit rate to 2.25% from 23 December, 2008 after trade growth collapsed because of recessions in the US, Europe,
and Japan. (Bloomberg)
· The Japanese government lowered its assessment of the economy for a third month, describing conditions as the most severe since 2002. (Bloomberg)
· European industrial orders plunged by 15.1% in October as the global recession deepened, eroding demand for machinery and equipment. (Bloomberg)

	3039.30	( -1.24 %)	-38.20
		1	2	3
Resistance		3090.57	3141.83	3173.22
Support		3007.92	2976.53	2925.27

	9928.35		( -1.70 %)	-171.56
			1	2	3
Resistance			10103.12	10277.90	10382.45
Support			9823.79	9719.24	9544.46

FII DATA 22-12-08
FII -191.49
DII +207.55

Strong & Weak futures
This is list of 10 strong futures:
HDIL,DLF,Matrix Lab,Patel Eng,Purva,Unitech,Educomp,Bindal Agro, Aptech & Suzlon.
And this is list of 10 Weak Futures:
J Stainless,Satyam Comp,Bhusan Stl,Birla Jute,Rolta,Redington,Jindal Saw,Nucleus,Sterlinbio & Gt Offshore.
Nifty is in Up Trend.

NIFTY FUTURES (F & O)
Below 3025-3027 zone, selling may continue up to 3015 level and thereafter slide may continue up to 2990-2992 zone.
Hurdles at 3049 & 3059 levels. Above these levels, expect short covering up to 3093-3095 zone and thereafter expect a jump up to 3128-3130 zone.
Above 3140-3142 zone, it can zoom up to 3174-3176 zone and supply expected at around this zone and this supply should get absorbed too.
On Negative Side, rebound expected at around 2979-2981 zone. Stop Loss at 2944-2946 zone.

Short-Term Investors:
Short-Term trend is Bullish and target at around 3202 level on upper side.
On Negative Side, corrections up to 2821 level can be used to buy. Maintain a Stop Loss at 2694 level for your long positions too.

BSE SENSEX
Technically Recovery should happen.
Short-Term Investors:
Trend is Bullish & Technical target at around 10443 level on upper side. Corrections up to 9297 level can be used to buy. SL at 8914 level.

GLOBAL CUES & RUPEE
The Dow Jones Industrial Average closed at 8,519.69. Down by 59.42 points.
The Broader S&P 500 closed at 871.63. Down by 16.25 points.
The Nasdaq Composite Index closed at 1,532.35. Down by 31.97 points.
The partially convertible rupee <INR=IN> ended at 48.01/48.03 per dollar on yesterday, weaker than Friday's close of 47.25/26.

IT SECTOR Stocks May Fall.

Trading Calls 23rd Dec 08
+ve sectors & scripts : Aptech, Balramchin, Castrol, Gtoffshore,

Buy YesBank-80 above 82 for 89 with sl 80 [Trading]
Buy Petronet-39 for 44.60 with sl 37
Buy Sintex-191 for 197 with sl 188

IFCI: Multi-Bagger

The deal to privatise IFCI has been truncated twice during CY08. However, with the PM now heading the Finance Ministry decks are being cleared for a politically acceptable solution. The solution cobbled together by North Block is to divest 26 per cent of the GOI stake to IDFC and then proceed with a massive effort to bring IFCI back to its feet.

Those in the know claims that the Assets held by IFCI including sizeable stakes in many organisations like the NSE and shares held either as investments or as collateral for loans granted to Indian Industry, substantially exceed the market capitalisation of IFCI. What is needed however, is the will to make IFCI realise the value on its books and bring back the venerable institution back to a stage where it can play a meaningful role in the rapid industrialisation of the country.

Here the extraordinary record of IDFC will come to the fore as would the fact, that IDFC is a pseudo GOI entity and its management control of IFCI would be acceptable to politicians of all hues and the labour unions. Investors would recall that IDFC had competed earlier in the year with the likes of Blackstone Group LP and General Electric Capital Corp. for a stake in the state-run project financier.

The bidders had included Blackstone, US billionaire Wilbur Ross and Vedanta owner Anil Agarwal. The deal had failed at the last moment on the issue of pricing and management control and a final phase-out of the GOI holding in IFCI over a period of time. These issues are now believed to have been resolved. The winner of the 26 percent IFCI stake will gain access to a market where lending grew 28 percent last year, and where the central bank limits foreign banks' ownership of local private rivals to 5 percent. IFCI, was bailed out by

the government in 2003 because of bad debts, in July announced plans to sell a stake to a local or overseas investor to bolster its capital.

Other bidders including a group led by billionaire Wilbur Ross and comprising Goldman Sachs Group Inc., Standard Chartered Plc and India's Housing Development Finance Corp., alongside Cargill Financial Services Corp., Natixis SA and Newbridge Asia for the stake. However, most bidders had dropped out by the time the final bids were to be opened.

In the wake of the cancellation of the bidding process IFCI had seen its stock plunge from a high of Rs 140 early on in CY08 to a low of Rs 15.25. On last Friday it closed slightly higher at Rs 23.20, still down 84 per cent from the peak. GOI which has been grappling with means to finance a projected $ 550 bn in infra spend over the next 5 years needs all resources at its disposal to work so as to maintain a 8 per cent plus annual GDP growth, in an environment that has plunged from Euphoria to Gloom.

Analysts however claim that funds are available to the right projects and to the right institutions, only the GOI has to show its resolve and some form of urgency. Some of the $ 550 billion of roads, ports and power stations the government wants built by 2012 could take off in the coming months and years. The potential returns in India spurred Blackstone, Citigroup Inc. and 3i Group Plc to start infrastructure funds this year. Infrastructure Development is partnering Blackstone and Citigroup for a $5 billion infrastructure fund in India and its taking over IFCI will further the aims of the GOI. The IFCI stock can be a multi-bagger of CY09.

(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.)

--
Arvind Parekh
+ 91 98432 32381

Market Outlook for 22.12.08

FII DATA 22-12-08
FII -191.49
DII +207.55

Strong & Weak futures
This is list of 10 strong futures:
HDIL,DLF,Matrix Lab,Patel Eng,Purva,Unitech,Educomp,Bindal Agro, Aptech & Suzlon.
And this is list of 10 Weak Futures:
J Stainless,Satyam Comp,Bhusan Stl,Birla Jute,Rolta,Redington,Jindal Saw,Nucleus,Sterlinbio & Gt Offshore.
Nifty is in Up Trend.

Corporate Announcements:
· RIL has received a grant of around Rs. 30 mn from the US for its proposed coal-to-liquid fuel project. (ET)
· Wockhardt is planning to raise Rs. 5 bn through preferential allotment of shares, for meeting payments to its Foreign Currency Convertible Bond holders. (BS)
· C&C Construction received an order of Rs. 7.81 bn to set up a frieght corridor from New Delhi to New Ganj Khwaja in Bihar. (BS)
· KEC International bagged an order valued at Rs. 880 mn form Barki Tojik, national electricity company of Tajikistan. (ET)
· Parsvnath Developers put on hold 12 SEZ projects across the country due to credit crunch. (BS)
· ACC has indefinitely put on hold the Rs. 6 bn expansion programme of its ready-mix concrete business. (BS)
Economic and Political Headlines:
· The Planning Commission said that the country's economy will need stimulus package in next fiscal as well since global slowdown will continue in 2009-10. (BS)
International News Headlines:
· The Bank of Japan cut its benchmark interest rate to 0.1%, increased purchases of government debt, and announced plans to buy as much as USD 223 bn of shares held by banks to boost their capital and support a sagging stock market. (Bloomberg)
· General Motors Corp. and Chrysler LLC will get USD 13.4 bn in initial government loans to keep operating in exchange for a restructuring under a rescue plan announced by President George W. Bush. (Bloomberg)
· Treasury Secretary Henry Paulson urged Congress to release the second half of a USD 700 bn bailout program after he exhausted he first USD 350 bn in less than three months. (Bloomberg)
· The UK consumer confidence rose to minus 33 from minus 35 in December as the cost of gasoline fell and the government cut taxes. (Bloomberg)

Strong & Weak futures
This is list of 10 strong futures:
HDIL, Oswal Cem, Patel Eng, Purva, HCC, DLF, Bajaj Hind, Jet Airways, Unitech & Matrix Labs.
And this is list of 10 Weak Futures:
J Stainless, Satyam, Birla Corp, Bhushan Steel, Roltas, Redington, Jindal Saw, GT Offshore, Sterlin Bio & Strides Arcolab.
Nifty is in Up Trend.

NIFTY SPOT LEVELS FOR TODAY

	3077.50	( 0.55 %)	16.75
		1	2	3
Resistance		3110.77	3144.03	3181.27
Support		3040.27	3003.03	2969.77

FII &DII DATA FOR 19-Dec-2008
FII +378.43
DII + 410.85

NIFTY FUTURES (F & O)
Below 3066 level, expect profit booking up to 3034-3036 zone and thereafter slide may continue up to 3014-3016 zone
Hurdles at 3092 & 3106 levels. Above these levels, buying may continue up to 3117-3119 zone and thereafter expect a jump up to 3137-3139 zone.
Above 3147-3149 zone, it can zoom up to 3167-3169 zone and supply expected at around this zone. This supply should get absorbed too.
On Negative Side, rebound expected at around 3004-3006 zone. Stop Loss at 2984-2986 zone.

Short-Term Investors:
Short-Term trend is Bullish and target at around 3202 level on upper side.
On Negative Side, corrections up to 2821 level can be used to buy. Maintain a Stop Loss at 2694 level for your long positions too.

BSE SENSEX
Technically Profit Booking should happen.

Short-Term Investors:
Trend is Bullish & Technical target at around 10443 level on upper side. Corrections up to 9297 level can be used to buy. SL at 8914 level.

GLOBAL CUES & RUPEE
The Dow Jones Industrial Average closed at 8,579.11. Down by 25.88 points.
The Broader S&P 500 closed at 887.88. Up by 2.60 points.
The Nasdaq Composite Index closed at 1,564.32. Up by 11.95 points.
The partially convertible rupee < INR = IN > ended at 47.25/26 per dollar on Friday,
weaker than Thursday's close of 46.95/96.

REALTY INDEX Stocks May Zoom.
Trading Calls 22nd Dec 08
+ve sectors & scripts : Bank, CNX500, Fertlizers, Reality, Ashokley, OBC, Jpassociates,

Buy Mcdowell-969 for 990-1004 with sl 959 [Trading]
Buy DLF-307 for 322 with sl 301
Buy Biocon-123 for 128-134 with sl 121

Buy Essoroil-94 above 96 for 112 with sl 94


Market Weekly Outlook
Nifty future may see some correction

---

Pointers

Nifty future trades at a premium to the spot.

Volatility index dips below 40.

---

It was yet another winning stretch for Nifty futures, which gained over 5.5 per cent to end the week at 3082.4 points.

This time around Nifty futures also ruled at a wider premium during most part of last week.

It, however, settled at about five-point premium to the spot.

Rollover of open interest positions also picked up moderately. The Nifty futures saw a rollover of about 31 per cent, slightly higher than that of the previous month.

The market-wide rollover was also a shade better at 32-35 per cent.

Follow up Last week we had suggested two strategies depending on how the Nifty opened. Since the Nifty opened the week on a soft note, traders who would have gone long on Nifty future (as recommended) must have made decent profits.

We had also suggested traders to consider a short straddle by using 2900 strikes.

This strategy would have yielded marginal profits.

DLF: We advised investors to go short on the stock, if it dipped below 265, with a stop-loss at Rs 300.

Though it dipped below 265, it did not reach our targeted level and instead bounced back to hit the stop loss.

Nifty future outlook
Despite breaching the 2950-mark, Nifty future struggled to move past the 3100-mark last week.

While the immediate resistance appears around 3250, a move above could take it to 3550.

On the other hand, if it fails to sustain at current levels, the Nifty future will find support at 2950, and then at 2750.

India VIX or Volatility Index has weakened quiet a bit in recent weeks.

It is now hovering at about 38.5 against its previous week's level of 49.23 points.

The softening of the volatility index indicates that a lot of puts may have been squared off, which in itself presents a positive bias for the market.

There has been steady accumulation of open interest positions in Nifty January 3300 call and 3000 and 2800 puts.

This indicates that the Nifty might move in a tight band of 2800-3300 in January. However, a breach on either side could swing the market sharply.

Recommendation:
Consider the following two strategies:
1) Though the undertone remains bullish, Nifty future could turn weak if it touches the immediate resistance zone. Hence we suggest investors to go short on Nifty future keeping the stop-loss at 3250. And if the market does go low as predicated, traders can book profits at 2950, 2850 and 2750, depending on their risk profile.
FIIs trend
The cumulative FII positions as a percentage of the total gross market position on the derivative segment as on December 19 stood at 30.58 per cent.

Foreign institutional investors were predominantly net buyers during most part of last week.

They now hold index futures worth about Rs 9,850 crore (Rs 8,842 crore) and stock future worth about Rs 12,314 crore (Rs 10,649 crore).Their index options holding stood higher at about Rs 15,310 crore (Rs 13,581 crore).

--
Arvind Parekh
+ 91 98432 32381

Market Outlook for 19.12.08

Headlines for the day
Corporate News Headline
IOC and Adani Energy may take 50% stake in a Rs. 40 bn liquefied natural gas import terminal planned by Gujarat State Petroleum Corp. (ET)
Unitech is planning to invest Rs. 25 bn to launch 10,000 residential units in the Rs 30-50 lakh category by the next fiscal. (ET)
Jindal Poly decided to invest upto Rs. 6.06 bn in one or more tranches in the form of subscription of equity shares of Hindustan Thermal Power Generation Ltd. (BS)
Economic and Political Headline
Inflation rate for the week ended December 6 dropping to a nine-month low of 6.84%, as against 8% on week-on-week basis. (BS)
India's Home Minister P Chidambaram said that Asia's third-biggest economy will expand by "at least" 7% in the year to March amid the global recession and hoped that the falling inflation rate would result in further lowering of interest rates. (Bloomberg)
The European Central Bank cut the interest rate to 100 bps and lifted its emergency lending rate to 100 bps in an effort to jolt financial companies into lending more to each other. (Bloomberg)

NIFTY & SENSEX SPOT LEVELS TODAY

	3060.75	( 3.60 %)	106.40
		1	2	3
Resistance		3114.65	3168.55	3264.55
Support		2964.75	2868.75	2814.85

	10076.43		( 3.72 %)	361.14
			1	2	3
Resistance			10246.83	10417.24	10724.13
Support			9769.53	9462.64	9292.23

Strong & Weak futures
This is list of 10 strong futures:
Bindalagro, HDIL, Bajaj Hind, Pateleng, Ambuja Cem, ICICI Bank, Edu Comp, Neyveli, Indian infoline & Shree Cem..
And this is list of 10 Weak Futures:
J Stainless, Satyam, Birla Jute, Bhushan Steel, Roltas, Jindal Saw, Redington, BRFL, G T Offshore & Voltas.
Nifty is in Up Trend.

NIFTY FUTURES (F & O)
Below 3042 level, expect profit booking up to 2979-2981 zone and thereafter slide may continue up to 2919-2921 zone.
Hurdle at 3086 level. Above this level, buying may continue up to 3102-3104 zone.
Above 3162-3164 zone, it can zoom up to 3222-3224 zone and supply expected at around this zone and have caution.
On Negative Side, rebound expected at around 2859-2861 zone. Stop Loss at 2799-2801 zone.

Short-Term Investors:
Short-Term trend is Bullish and target at around 3202 level on upper side.
On Negative Side, corrections up to 2821 level can be used to buy. Maintain a Stop Loss at 2694 level for your long positions too.

BSE SENSEX
Technically Profit Booking should happen.

Short-Term Investors:
Trend is Bullish & Technical target at around 10443 level on upper side. Corrections up to 9297 level can be used to buy. SL at 8914 level.

GLOBAL CUES & RUPEE
The Dow Jones Industrial Average closed at 8,604.99. Down by 219.35 points.
The Broader S&P 500 closed at 885.28. Down by 19.14 points.
The Nasdaq Composite Index closed at 1,552.37. Down by 26.94 points.
The partially convertible rupee <INR=IN> ended at 46.95/96 per dollar on yesterday, stronger than Wednesday's close of 47.67/69.

FII DATA 18-Dec-2008
FII -33.17
DII -355.99

Trading Calls 19th Dec 08

Buy AxisBank-537 for 545-555 with sl 530 [Trading]
Buy PNB-503 for 514 with sl 498

Buy BPCL-367 above 370 for 384 with sl 365

--
Arvind Parekh
+ 91 98432 32381

Market Outlook for 18.12.08

Headlines for the day

Corporate News Headline
Reliance Industries has failed to deliver the second consignment of crude oil from its eastern offshore Krishna-Godavari basin D6 block to Chennai Petroleum Corp Ltd. (ET)
Patel Engineering has bagged an order worth Rs. 38.59 bn for water lift irrigation works from Government of Andhra Pradesh. (ET)
Elecon Engineering bagged an order of Rs. 1.2 bn from Mundra port and Special Economic Zone of Adani Group. (BS)

Economic and Political Headline
The RBI said that India´s inflation ´continues to be above the acceptable level´ and the global financial crisis has become more ´widespread´ in the domestic economy despite global markets showing signs of recovery. (BS)
The Reserve Bank said that the non-performing assets of banks have gone up for the first time in six years in 2007-08 and the bad loans of new generation private banks and foreign lenders are "more noticeable" due to their aggressive lending to real estate and housing segments. (ET)
The US current account deficit decreased to US 174.1 bn during the July through September period, from a downwardly revised USD 180.9 bn in the second quarter, as a broad gain in exports outstripped the rise in imports. (WSJ)

	2954.35	( -2.87 %)	-87.40
		1	2	3
Resistance		3039.20	3124.05	3171.90
Support		2906.50	2858.65	2773.80

	9715.29		( -2.62 %)	-261.69
			1	2	3
Resistance			9964.62	10213.96	10354.81
Support			9574.43	9433.58	9184.24

FII DATA FOR 17TH DEC
FII -188.65
DII -97.82


Strong & Weak futures
This is list of 10 strong futures:
Oswal Chem,HOUSING DEV & IN,Bajaj Hind.,Patel Engineerin,Grasim Inds.,STERLITE TECHNOL,Shr.Cements,Ndtv Ltd,GE Ship, Jindal Steel & Po.
And this is list of 10 Weak Futures:
Bajaj Au.Ltd,Satyam Compu,Bhushan Steel,Rolta,BOMBAY RAYON FAS,Jindal Saw,REDINGTON,Financial Techno,GREAT OFFSHORE and Rel.Capital
Nifty is in Up Trend

NIFTY FUTURES (F & O)
Below 2924-2926 zone, selling may continue up to 2864-2866 zone.
Hurdles at 2959 & 2986 levels. Above these levels, expect short covering up to 3047-3049 zone and thereafter expect a jump up to 3107-3109 zone.
Above 3208-3210 zone, it will zoom up to 3268-3270 zone and supply expected at around this zone.
On Negative Side, 2803-2805 zone should not be allowed to break at any cost.

Short-Term Investors:
Short-Term trend is Bullish and target at around 3202 level on upper side.
On Negative Side, corrections up to 2821 level can be used to buy. Maintain a Stop Loss at 2694 level for your long positions too.

BSE SENSEX
Technically Recovery should happen.

Short-Term Investors:
Trend is Bullish & Technical target at around 10443 level on upper side. Corrections up to 9297 level can be used to buy. SL at 8914 level.

GLOBAL CUES & RUPEE
The Dow Jones Industrial Average closed at 8,824.34. Down by 99.80 points.
The Broader S&P 500 closed at 904.42. Down by 8.76 points.
The Nasdaq Composite Index closed at 1,579.31. Down by 10.58 points.
The partially convertible rupee <INR=IN> closed at 47.67/69 per dollar on yesterday, higher than its previous close of 47.92/93.

Trading Calls 18th Dec 08
+ve sectors & scripts : Escorts, Fortis, Gic housing, Max,Aegischem, Castrol

Buy ICICIBank-431 for 450 with sl 426 [Trading]
Buy CanBank-167 for 174 with sl 165

Buy OBC-142 for 147 with sl 140
Short BHEL-1337 for 1305 with sl 1355

+ve to Market
1. Asian Market 2. Advance tax by PSU Banks 3. Asian Market 4. FII Buying 5.Expected further fall in Inflation.
-ve to Market
1. Small savings collections rise 2. Sharp fall in advance tax paid by manufacturing sectors 3. Expected slow down in Q3 results 4. Redemption pressure in MF 5. Gold Rally 6. Profit booking 7. US Market 8. Morgan Stanley loss.

--
Arvind Parekh
+ 91 98432 32381

Market Outlook for 17.12.08

FII DATA
FII -188.65
DII -97.82

Strong & Weak futures
This is list of 10 strong futures:
Oswal Chem,HOUSING DEV & IN,Bajaj Hind.,Patel Engineerin,Grasim Inds.,STERLITE TECHNOL,Shr.Cements,Ndtv Ltd,GE Ship, Jindal Steel & Po.
And this is list of 10 Weak Futures:
Bajaj Au.Ltd,Satyam Compu,Bhushan Steel,Rolta,BOMBAY RAYON FAS,Jindal Saw,REDINGTON,Financial Techno,GREAT OFFSHORE and Rel.Capital
Nifty is in Up Trend.

Headlines for the day
Corporate News Headline
Satyam Computer is planning to invest Rs. 76.8 bn to purchase of 51% in Maytas Infra and buy out of Maytas Properties. (BS)
L&T has received three orders worth Rs. 13.72 bn from three different steel companies for engineering related works. (BS)
Suzlon Energy revised the payment schedule to acquire 22.4% stake in German REpower Systems AG. (BS)
Economic and Political Headline
The global economic slowdown has taken its toll on foreign investment flows into the country, with FDI declining by as much as 26% this October, over the same month a year ago. (BS)
The Home Minister P Chidambaram said that the policies of the Indian government and the Reserve Bank of India are biased towards growth. (ET)
The Federal Reserve cut the main US interest rate to as low as zero and said it will buy debt as the next step in combating the longest recession in a quarter-century and reviving credit. (Bloomberg)


NIFTY SPOT & SENSEX LEVELS TODAY

	3041.75	( 2.03 %)	60.55
		1	2	3
Resistance		3075.10	3108.45	3164.35
Support		2985.85	2929.95	2896.60

	9976.98		( 1.47 %)	144.59
			1	2	3
Resistance			10060.69	10144.40	10279.59
Support			9841.79	9706.60	9622.89

Strong & Weak futures
This is list of 10 strong futures:
Bajaj Hind, HDIL, STR Tech, Bindal Agro, Wej Guj, Patel Eng, AmbujaCem, IFCI, Amtek Auto & GE Ship.
And this is list of 10 Weak Futures:
Bhushan Stl, Redington, Rolta, Bharat Forg, HCL Tech, TCS, Satyam Comp, Jindal Saw, Infosys Tech & Abb.
Nifty is in Up Trend.


NIFTY FUTURES (F & O)
Rally may continue up to 3078-3080 zone for time being.
Support at 3032 & 3038 levels. Below these levels, expect profit booking up to 2991-2993 zone and thereafter slide may continue up to 2951-2953 zone.

Buy if touches 2912-2914 zone. Stop Loss at 2873-2875 zone.
On Positive Side, above 3117-3119 zone it can zoom up to 3157-3159 zone and if crosses & sustains at above this zone then uptrend may continue.

Short-Term Investors:
Short-Term trend is Bullish and target at around 3202 level on upper side.
On Negative Side, corrections up to 2821 level can be used to buy. Maintain a Stop Loss at 2694 level for your long positions too.

BSE SENSEX
Technically Profit Booking should happen.

Short-Term Investors:
Trend is Bullish & Technical target at around 10443 level on upper side. Corrections up to 9297 level can be used to buy. SL at 8914 level.

FII DATA
FII
16/12: 6.42 Cr. (Prov)
DII
16/12: -39.40 Cr. (Prov)

GLOBAL CUES & RUPEE
The Dow Jones Industrial Average closed at 8,924.14. Up by 359.61 points.
The Broader S&P 500 closed at 913.18. Up by 44.61 points.
The Nasdaq Composite Index closed at 1,589.89. Up by 81.55 points.
The partially convertible rupee <INR=IN> closed at 47.92/93 per dollar on yesterday, stronger from Monday's close of 48.05/06.

OIL & GAS INDEX Stocks May Zoom

+ve to Market
1. US Market 2. Fed meeting result 3. FII continous Buying 4. Advance tax buy PSU Banks 5. Asian Market
-ve to Market
1. Expected slow down in Q3 results 2. Redemption pressure in MF 3. Gold Rally 4. Profit booking
Trend is Bullish & Technical target at around 10443 level on upper side. Corrections up to 9297 level can be used to buy. SL at 8914 level.


--
Arvind Parekh
+ 91 98432 32381

Market Outlook for 17.12.08

Headlines for the day
Corporate News Headline
Satyam Computer is planning to invest Rs. 76.8 bn to purchase of 51% in Maytas Infra and buy out of Maytas Properties. (BS)
L&T has received three orders worth Rs. 13.72 bn from three different steel companies for engineering related works. (BS)
Suzlon Energy revised the payment schedule to acquire 22.4% stake in German REpower Systems AG. (BS)
Economic and Political Headline
The global economic slowdown has taken its toll on foreign investment flows into the country, with FDI declining by as much as 26% this October, over the same month a year ago. (BS)
The Home Minister P Chidambaram said that the policies of the Indian government and the Reserve Bank of India are biased towards growth. (ET)
The Federal Reserve cut the main US interest rate to as low as zero and said it will buy debt as the next step in combating the longest recession in a quarter-century and reviving credit. (Bloomberg)


NIFTY SPOT & SENSEX LEVELS TODAY

	3041.75	( 2.03 %)	60.55
		1	2	3
Resistance		3075.10	3108.45	3164.35
Support		2985.85	2929.95	2896.60

	9976.98		( 1.47 %)	144.59
			1	2	3
Resistance			10060.69	10144.40	10279.59
Support			9841.79	9706.60	9622.89

Strong & Weak futures
This is list of 10 strong futures:
Bajaj Hind, HDIL, STR Tech, Bindal Agro, Wej Guj, Patel Eng, AmbujaCem, IFCI, Amtek Auto & GE Ship.
And this is list of 10 Weak Futures:
Bhushan Stl, Redington, Rolta, Bharat Forg, HCL Tech, TCS, Satyam Comp, Jindal Saw, Infosys Tech & Abb.
Nifty is in Up Trend.


NIFTY FUTURES (F & O)
Rally may continue up to 3078-3080 zone for time being.
Support at 3032 & 3038 levels. Below these levels, expect profit booking up to 2991-2993 zone and thereafter slide may continue up to 2951-2953 zone.

Buy if touches 2912-2914 zone. Stop Loss at 2873-2875 zone.
On Positive Side, above 3117-3119 zone it can zoom up to 3157-3159 zone and if crosses & sustains at above this zone then uptrend may continue.

Short-Term Investors:
Short-Term trend is Bullish and target at around 3202 level on upper side.
On Negative Side, corrections up to 2821 level can be used to buy. Maintain a Stop Loss at 2694 level for your long positions too.

BSE SENSEX
Technically Profit Booking should happen.

Short-Term Investors:
Trend is Bullish & Technical target at around 10443 level on upper side. Corrections up to 9297 level can be used to buy. SL at 8914 level.

FII DATA
FII
16/12: 6.42 Cr. (Prov)
DII
16/12: -39.40 Cr. (Prov)

GLOBAL CUES & RUPEE

The Dow Jones Industrial Average closed at 8,924.14. Up by 359.61 points.
The Broader S&P 500 closed at 913.18. Up by 44.61 points.
The Nasdaq Composite Index closed at 1,589.89. Up by 81.55 points.
The partially convertible rupee <INR=IN> closed at 47.92/93 per dollar on yesterday, stronger from Monday's close of 48.05/06.

OIL & GAS INDEX Stocks May Zoom

+ve to Market
1. US Market 2. Fed meeting result 3. FII continous Buying 4. Advance tax buy PSU Banks 5. Asian Market

-ve to Market

1. Expected slow down in Q3 results 2. Redemption pressure in MF 3. Gold Rally 4. Profit booking

Trend is Bullish & Technical target at around 10443 level on upper side. Corrections up to 9297 level can be used to buy. SL at 8914 level.

--
Arvind Parekh
+ 91 98432 32381

Market Outlook for 16.12.08

Strong & Weak futures
This is list of 10 strong futures:
Bajaj Hind, HDIL, STR Tech, Bindal Agro, Wej Guj, Patel Eng, AmbujaCem, IFCI, Amtek Auto & GE Ship.
And this is list of 10 Weak Futures:
Bhushan Stl, Redington, Rolta, Bharat Forg, HCL Tech, TCS, Satyam Comp, Jindal Saw, Infosys Tech & Abb.
Nifty is in Up Trend.

FII DATA
FII
16/12: 6.42 Cr. (Prov)
DII
16/12: -39.40 Cr. (Prov)

Headlines for the day
Corporate News Headline
DLF is planning to invest Rs. 150 bn over the next three years to develop various residential projects across the country in Rs. 15-40 lakh range. (BS)
HCL Technologies completed its acquisition of Axon Group Plc and said the purchase was already helping it bid for orders worth as much as USD 1.2 bn. (Bloomberg)
SRF has acquired the engineering plastic business and industrial yarn business of SRF Polymers for Rs. 1.52 bn. (BS)
Economic and Political Headline
The Public sector banks announced that home loans up to Rs. 5 lakh would be given at a maximum interest rate of 8.5%, while those between Rs. 5 lakh and Rs. 20 lakh would be offered at 9.25%. (BS)
The government said that it has taken various policy and administrative steps, including de-licensing of thermal power generation, to encourage greater participation of private developers in the sector. (BS)
The US industrial production fell 0.6% in November for the third time in four months, led by a slump at automakers as sales plummeted. (Bloomberg)


NIFTY AND SENSEX SPOT LEVELS FOR TODAY

	2981.20	( 2.05 %)	59.85
		1	2	3
Resistance		3022.90	3064.60	3117.10
Support		2928.70	2876.20	2834.50

	9832.39		( 1.47 %)	142.32
			1	2	3
Resistance			9937.38	10042.38	10136.42
Support			9738.34	9644.30	9539.30

NIFTY FUTURES (F & O)

Below 2955 level, expect profit booking up to 2927-2929 zone and thereafter slide may continue up to 2901-2903 zone by non-stop.

Hurdles at 2991 & 2995 levels. Above these levels, buying may continue up to 3019-3021 zone.

Supply expected at around 3045-3047 zone and bulls need to absorb it.

On Negative Side, rebound expected at around 2875-2877 zone. Stop Loss at 2849-2851 zone.

Short-Term Investors:

Short-Term trend is Bullish and target at around 3202 level on upper side.

On Negative Side, corrections up to 2821 level can be used to buy. Maintain a Stop Loss at 2694 level for your long positions too.

BSE SENSEX

Technically Recovery should happen. If bulls reluctant then bears will try to hammer and have caution.

Short-Term Investors:

Trend is Bullish & Technical target at around 10443 level on upper side. Corrections up to 9297 level can be used to buy. SL at 8914 level.

FII DATA
FII 15-Dec-2008 +230.48
DII 15-Dec-2008 +42.72

Strong & Weak futures
This is list of 10 strong futures:
GE Ship, IFCI, Bindal Agro, Bajaj Hind, RNRL, HDIL, LITL, Nagar Const, NDTV & JP Associate..
And this is list of 10 Weak Futures:
J Stainless, Birla Jute, Satyam, Bhusan Steel, HCL Tech, Redington, Rolta, Bharat Forg, TCS & Finan Tech.
Nifty is in Up Trend.

GLOBAL CUES & RUPEE The Dow Jones Industrial Average closed at 8,564.53. Down by 65.15 points.

The Broader S&P 500 closed at 868.57. Down by 11.16 points.

The Nasdaq Composite Index closed at 1,508.34. Down by 32.38 points.

The partially convertible rupee <INR=IN> closed at 48.05/06 per dollar on yesterday, stronger than its previous close of 48.43/45.

Sell IT SECTOR Stocks

Trading Calls 16th Dec 08

+ve sectors & scripts :

CNXmidcap, Nifty junior,Midcap50, Biocon, Balramchin, IVRCLinfra, MTNL, PTC, Rajesexp, RPL, Sail

-ve Sectors & Scripts :

IT, Akruti, Network18, OBC, Wipro

Buy Bataindia-101 for 107 with sl 98

Buy Cairn-164 for 169-176 with sl 161

Buy LITL-161 for 172 with sl 155

Buy Gtoffshore-246 for 253-260 with sl 240

Buy Indiacem-99 above 101 for 106 with sl 99

Buy RPL-90 above 91.5 for 95 with sl 90

Buy Siemens-267 above 270 for 290 with sl 265

+ve to Market

1. Public Sector Banks Move on home loan 2. Expect +ve news from Fed meeting 3. FII continous Buying 4. Advance tax buy PSU Banks

-ve to Market

1. Expect Advance Tax payment down in YoY 2. Expected slow down in Q3 results 3. US Market 4. Redemption pressure in MF 5. Gold Rally 6. US Auto bailout package not approved by senate will be most negative for IT

--
Arvind Parekh
+ 91 98432 32381

Market Outlook for 15.12.08

FII DATA
FII 15-Dec-2008 +230.48
DII 15-Dec-2008 +42.72

Strong & Weak futures
This is list of 10 strong futures:
GE Ship, IFCI, Bindal Agro, Bajaj Hind, RNRL, HDIL, LITL, Nagar Const, NDTV & JP Associate..
And this is list of 10 Weak Futures:
J Stainless, Birla Jute, Satyam, Bhusan Steel, HCL Tech, Redington, Rolta, Bharat Forg, TCS & Finan Tech.
Nifty is in Up Trend.

Headlines for the day
Corporate News Headline
SAIL has entered into an agreement with the Kerala government to acquire up to 50% stake in state-run Steel Complex for Rs. 83.8 mn. (BS)
NALCO signed a strategic alliance with the arm of global miner Rio Tinto for increasing its presence in India and abroad. (BS)
JSW Steel has decided to put on hold the expansion of its pipe- making mill in Texas, after demand from oil companies slumped. (Bloomberg)
Economic and Political Headline
The Index of Industrial production has dipped by 0.4% in October this year, as against 12.2% in the same month last year. (CSO)
After announcing a stimulus package and mulling further steps to boost the economy, the Home Minister P Chidambaram said that the fiscal deficit even beyond 3% is not a matter of concern. (BS)
Japan passed legislation allowing the government to inject as much as USD 22 bn into the nation´s banks as record stock-market declines erode their capital and hamstring their ability to lend. (Bloomberg)

NIFTY FUTURES (F & O)

Above 2932-2934 zone, expect short covering up to 2950 level and thereafter expect a jump up to 2984-2986 zone.

Support at 2895 & 2912 levels. Below these levels, selling may continue up to 2841-2843 zone and thereafter slide may continue up to 2789-2791 zone.

Below 2772-2774 zone, expect panic up to 2720-2722 zone by non-stop.

On Positive Side, above 3002-3004 zone it can zoom up to 3054-3056 zone and supply expected at around this zone and have caution.

Short-Term Investors:

Short-Term trend is Bullish and target at around 3202 level on upper side.

On Negative Side, corrections up to 2821 level can be used to buy. Maintain a Stop Loss at 2694 level for your long positions too.

BSE SENSEX

Technically Profit Booking should happen.

Short-Term Investors:

Trend is Bullish & Technical target at around 10443 level on upper side. Corrections up to 9297 level can be used to buy. SL at 8914 level.

+ve to Market
1. Technical views 2. Bailout packages in intl. level 3. FII Buying 4. US Market, 5. Asian Market 6. SGX nifty 7. Expect +ve news from Fed meeting
-ve to Market
1. Expect Advance Tax payment down in QoQ 2. Expected slow down in Q3 results 3. DII Selling 4. Redemption pressure in MF 5. Gold Rally 6. US Auto bailout package not approved by senate will be most negative for IT 7. IIP data 8. PCR ratio


Trading Calls 15th Dec 08
+ve sectors & scripts : Banknifty, DcmSrmcons, PNBglits, 3I Info, BRFL,
-ve Sectors & Scripts : IT, Educomp, CMC, Colpal, Tatamotors

Buy BankBaroda-256 for 263-267 with sl 251
Buy HPCL-236 for 259 with sl 232

Buy Titan-872 for 895 with sl 865
Buy Balramchin-41 for 44 with sl 39.50
Buy LT-788 above 800 for 855-870 with sl 788

Short ABB-433 @ 446 for 423 with sl 453
Short Drreddy-443 @ 450 for 438 with sl 455

NIFTY & SENSEX LEVELS FOR TODAY 14TH DEC

	2921.35	( 0.04 %)	1.20
		1	2	3
Resistance		2967.92	3014.48	3092.17
Support		2843.67	2765.98	2719.42

	9690.07		( 0.46 %)	44.61
			1	2	3
Resistance			9863.09	10036.11	10326.71
Support			9399.47	9108.87	8935.85

Strong & Weak futures
This is list of 10 strong futures:
RNRL, NDTV, J P Associat, Sterlite Inds, Nagar const., Tisco, IVRCL Infra, Geship & Rcom.
And this is list of 10 Weak Futures:
Bhushan Steel, Redington, Purva, Havells, Ansal Infra, HCL Tech, Jindal Saw, BRFL & Tulip.

Weekly Market Outlook for 15-19th Dec'08

Index Outlook

Sensex (9690.9)
Equity markets saw a defiant fight-back by the bulls, who perhaps wish to end 2008 on an optimistic note. The stimulus packages announced in India and by the President-elect in US provided fodder for the rally last week. Dismal industrial production numbers and other negative tidings were shrugged aside as Sensex closed 8 per cent higher.

The rally was more tempered in BSE mid and small-cap indices though a number of trading stocks soared merrily, causing a twinge of unease. The fact that the FIIs were net buyers throughout the week also aided the sentiment. Net cash inflow from this source has crossed $500 in December.

Buy signals are beginning to emerge in the weekly oscillators though they continue to be deep in the negative zone. The implication is that a medium-term trough is possible here but caution needs to be exercised till the index rallies a little further. We are likely to see the first positive close after three horrendous months in the monthly chart.

Sensex broke out of its short-term range on Wednesday and held steadily above it for the rest of the week. If we view the movement of the index since October lows, it is forming a flat pattern (a continuation pattern). The C wave of this pattern is currently in motion and has the targets of 10323 and 11564.

Once this pattern completes, the correction can either continue with an x wave and yet another three-wave corrective or the long-term down trend from the 21206 peak can resume. Wave counts of the down-move from the January peak suggests that volatility will persist over the medium-term and a decline below 8000 again can not be ruled out in this period. The key support that medium-term investors need to watch is 8500.

The short-term trend is currently up and Sensex can move on to 10031 or 10494. But investors could get edgy close to the psychological 10000-mark. The presence of the 50-day moving average at 10120 makes the band between 10000 and 10500 a formidable short-term resistance. Support levels will be at 9100, 8929 and 8467.

Nifty (2921.3)

Nifty moved close to our first short-term target at 2958 and closed with a 207-point gain last week. The short-term trend in the index is positive since the trough at 2502. This up-trend can extend to 3112 or 3490. The medium trend in the index is, however, sideways and a move between 2500 and 3500 is likely in this period. The medium-term view will turn positive only on a weekly close above 3500.

Nifty will face resistance from 2960 and 3040 in the week ahead. A downward reversal from the resistance zone between 2950 and 3050 will pull the index lower to 2670 or 2500 once more.

Global Cues
It was a choppy week for US equities though the rest of the global markets closed the week on a mildly positive note. The Dow Jones Industrial Average closed the week with a five points loss. This index is consolidating sideways between 8000 and 9500 since the last week of October. Conclusion regarding the next directional move cannot be drawn as long as the index is confined within this range.

Volatility eased and the CBOE volatility index closed at the lower end of its medium term range between 50 and 90, implying that investors were a little more sanguine. Commodity-oriented markets in countries such as Argentina, Mexico and Brazil recorded a strong rally last week backed by gains in some commodities. Bargain hunting was also witnessed in Asian markets such as those in Hong Kong, Korea, Taiwan and Thailand.

There was some respite for commodities too as the CRB index gained over 6 per cent. But the index is still below the long-term support at 356 implying that the outlook for this sector continues to be one of caution.

Maruti Suzuki

Maruti struggled to surpass the resistance at Rs 512 in the early part of the week and plunged lower to Rs 465 on Friday. But the sharp recovery in the second half of Friday's session implies that the short-term trend continues to be positive. The stock will continue to face resistance at Rs 510 and Rs 525. But once this zone is crossed, a move higher to Rs 542 is possible.

The medium-term view on the stock stays neutral and a sideways move between Rs 450 and Rs 750 is the preferred view over this period. Since the stock is reversing from the lower boundary of this range, swing traders can buy the stock in declines with a stop at Rs 440.

Reliance Industries

Reliance Industries moved above the short-term trading range on Wednesday to close the week with a 12 per cent gain.
As we have explained earlier, the medium term view for this stock is neutral and a range bound move between Rs 950 and Rs 1,500 is possible in this period.
The third part of the move from the Rs 930 trough commenced last week and has the targets of Rs 1,389 or Rs 1,607.
Strong resistance for the upcoming week will be in the band between Rs 1,325 and Rs 1,350.
Reversal from this zone can pull the stock down to Rs 1,140 again. Target beyond Rs 1,350 is Rs 1,500.

SBI

State Bank of India moved sideways with a positive bias last week. The short-term trend in the stock is up since the recent trough at Rs 995. But there is a strong short-term resistance at Rs 1,230. A weak start next week will take the stock down to Rs 1,080 again.

The short-term outlook will, however, turn negative only if this level is penetrated. Short-term investors can hold their long positions with a stop at Rs 1,070.

Conversely if SBI holds above Rs 1,140, it can move on to Rs 1,274 or Rs 1,356 over the upcoming weeks.

The medium-term range for SBI is between Rs 1,000 and Rs 1,500.

Infosys

Infosys meandered sideways initially and then plunged lower towards the support at Rs 1,100 indicated last week. Though the stock lost over 2 per cent last week, it is holding well above the Rs 1,100-support. As mentioned in our previous column, there is long-term support at Rs 1,100 and a rebound is possible from here. If this level is breached, subsequent supports are at Rs 1,040 and then Rs 940.

Resistances for the week ahead would be at Rs 1,160 and Rs 1,220. The 50-day moving average at Rs 1,260 will be the key medium-term resistance. Investors can buy the stock on a firm close above this level.

Tata Steel

Tata Steel built on the gains recorded in the previous week to move higher to an intra-week peak at Rs 226. Weekly volumes continued to be strong reinforcing the view that a sustainable trough could be in place.

The stock can move higher towards Rs 250 in the near-term. Downward reversal from here will result in a sideways move between Rs 150 and Rs 250 for a few more weeks.

A weekly close above Rs 250 will herald an up-move that can take Tata Steel to Rs 328 or Rs 360 over the medium-term. Investors with a medium-term perspective can buy in declines with a stop at Rs 140.

ONGC

ONGC too moved in a very narrow range in the first three sessions before recording a sharp decline on Friday.
The short-term trend in the stock is currently sideways between Rs 640 and Rs 700.
However, the floor of this range can be penetrated and the stock can decline to Rs 615 or even Rs 533.
The bearish view will be mitigated only on a close above Rs 740.
The medium-term trend in the stock is down.
But as we have been reiterating, the presence of long-term support in the band between Rs 570 and Rs 600 makes a rebound likely from here.

Nifty future remains at critical stage

Nifty December future staged a sharp recovery of 7.8 per cent over the week to end at 2921.7 points against its previous week's close of 2711.1. It, however, ended almost at par with the Nifty spot, which ended the week at 2921.35. The series also saw a steady build-up in open interest positions.

Follow up

1) We had advised traders to go long on Nifty future keeping the stop-loss at 2550;

2) We also advised traders to consider short straddle by using 2700 strike.

While the first strategy would have yielded handsome gains, the second strategy is still slightly out of the money. Traders can continue to hold on this strategy (short straddle) as was advised last week.

Tata Steel: We had advised traders to go short on the stock keeping the stop-loss at 215. The stop-loss however would have been triggered as the stock price remained firm last week.

Nifty future outlook

The Nifty future is on the verge of breaking the crucial resistance level of 2950. It has been hovering around 2450-2950 level for quite some time. As has been previously written in this column, the Nifty future on breaching the 2950 mark, can achieve the next target level of 3250 quite easily. The Nifty future finds the immediate support at around 2750 and the big crucial support at 2450. A break below that level can take it to 1880-1950.

India VIX or Volatility Index broke below its psychological 50-point mark on Friday to end at 49.23 points. That said, the number is still quite high. The index, which measures the immediate expected volatility of Nifty has been hovering around 60-95 range for quite some time.

Both 2900 and 3000 calls saw marginal accumulation in open interest positions while 2800 call witnessed a drop of 5 per cent in open positions. On the other hand, Nifty December 2800, 2700 and 2600 strikes added quite heavy open positions, particularly puts of the first two strikes. This indicates the emergence of put writers in 2800 and 2700, which could act as strong support for Nifty future.

Recommendation:

Consider the following two strategies:

1) We expect the positive momentum in Nifty to continue. Traders can, however, consider going short on Nifty future, if it opens on a strong note (above 3000 point mark). In that case the stop-loss can be placed at 3250.

2) On the other hand, if it opens on a negative note, traders can consider going long on Nifty future keeping the stop- loss at 2550.

3) Consider short straddle strategy using 2900-strikes. While the 2900 call closed the week at around 123.75, the put ended the week at 101.3. This strategy is best suited if one considers the market to move in a narrow range. While the maximum profit in this strategy could be the premium earned, the loss can be unlimited.

Stock futures

DLF (275.5)

The stock has recovered quite sharply in the last few days. It now faces resistance at 300 and support at 200.Traders can consider going short on the stock if it dips below 265. In that event, the stop-loss can be placed at 300. The stop-loss has to be adjusted suitably to cover the profit.

FIIs trend

The cumulative FII positions as percentage of the total gross market position on the derivative segment as on December 11 stood at 31.87 per cent. Foreign institutional investors were predominantly net buyers last week. They now hold index futures worth Rs 8,842.16 crore (Rs 6,126.88 crore) and stock future worth Rs 10,649.29 crore (Rs 9,143.61 crore).Their index options holding stood higher at Rs 13,580.75 crore (Rs 11,070.33 crore).

FII DATA
FII
12-Dec-2008 -16.52
DII
12-Dec-2008 325.81

Arvind Parekh
+ 91 98432 32381

Weekly Market Outlook for 15-19th Dec'08

NIFTY & SENSEX LEVELS FOR 14TH DEC

	2921.35	( 0.04 %)	1.20
		1	2	3
Resistance		2967.92	3014.48	3092.17
Support		2843.67	2765.98	2719.42

	9690.07		( 0.46 %)	44.61
			1	2	3
Resistance			9863.09	10036.11	10326.71
Support			9399.47	9108.87	8935.85

Index Outlook

Sensex (9690.9)
Equity markets saw a defiant fight-back by the bulls, who perhaps wish to end 2008 on an optimistic note. The stimulus packages announced in India and by the President-elect in US provided fodder for the rally last week. Dismal industrial production numbers and other negative tidings were shrugged aside as Sensex closed 8 per cent higher.

The rally was more tempered in BSE mid and small-cap indices though a number of trading stocks soared merrily, causing a twinge of unease. The fact that the FIIs were net buyers throughout the week also aided the sentiment. Net cash inflow from this source has crossed $500 in December.

Buy signals are beginning to emerge in the weekly oscillators though they continue to be deep in the negative zone. The implication is that a medium-term trough is possible here but caution needs to be exercised till the index rallies a little further. We are likely to see the first positive close after three horrendous months in the monthly chart.

Sensex broke out of its short-term range on Wednesday and held steadily above it for the rest of the week. If we view the movement of the index since October lows, it is forming a flat pattern (a continuation pattern). The C wave of this pattern is currently in motion and has the targets of 10323 and 11564.

Once this pattern completes, the correction can either continue with an x wave and yet another three-wave corrective or the long-term down trend from the 21206 peak can resume. Wave counts of the down-move from the January peak suggests that volatility will persist over the medium-term and a decline below 8000 again can not be ruled out in this period. The key support that medium-term investors need to watch is 8500.

The short-term trend is currently up and Sensex can move on to 10031 or 10494. But investors could get edgy close to the psychological 10000-mark. The presence of the 50-day moving average at 10120 makes the band between 10000 and 10500 a formidable short-term resistance. Support levels will be at 9100, 8929 and 8467.

Nifty (2921.3)

Nifty moved close to our first short-term target at 2958 and closed with a 207-point gain last week. The short-term trend in the index is positive since the trough at 2502. This up-trend can extend to 3112 or 3490. The medium trend in the index is, however, sideways and a move between 2500 and 3500 is likely in this period. The medium-term view will turn positive only on a weekly close above 3500.

Nifty will face resistance from 2960 and 3040 in the week ahead. A downward reversal from the resistance zone between 2950 and 3050 will pull the index lower to 2670 or 2500 once more.

Global Cues
It was a choppy week for US equities though the rest of the global markets closed the week on a mildly positive note. The Dow Jones Industrial Average closed the week with a five points loss. This index is consolidating sideways between 8000 and 9500 since the last week of October. Conclusion regarding the next directional move cannot be drawn as long as the index is confined within this range.

Volatility eased and the CBOE volatility index closed at the lower end of its medium term range between 50 and 90, implying that investors were a little more sanguine. Commodity-oriented markets in countries such as Argentina, Mexico and Brazil recorded a strong rally last week backed by gains in some commodities. Bargain hunting was also witnessed in Asian markets such as those in Hong Kong, Korea, Taiwan and Thailand.

There was some respite for commodities too as the CRB index gained over 6 per cent. But the index is still below the long-term support at 356 implying that the outlook for this sector continues to be one of caution.

Maruti Suzuki

Maruti struggled to surpass the resistance at Rs 512 in the early part of the week and plunged lower to Rs 465 on Friday. But the sharp recovery in the second half of Friday's session implies that the short-term trend continues to be positive. The stock will continue to face resistance at Rs 510 and Rs 525. But once this zone is crossed, a move higher to Rs 542 is possible.

The medium-term view on the stock stays neutral and a sideways move between Rs 450 and Rs 750 is the preferred view over this period. Since the stock is reversing from the lower boundary of this range, swing traders can buy the stock in declines with a stop at Rs 440.

Reliance Industries

Reliance Industries moved above the short-term trading range on Wednesday to close the week with a 12 per cent gain.
As we have explained earlier, the medium term view for this stock is neutral and a range bound move between Rs 950 and Rs 1,500 is possible in this period.
The third part of the move from the Rs 930 trough commenced last week and has the targets of Rs 1,389 or Rs 1,607.
Strong resistance for the upcoming week will be in the band between Rs 1,325 and Rs 1,350.
Reversal from this zone can pull the stock down to Rs 1,140 again. Target beyond Rs 1,350 is Rs 1,500.

SBI

State Bank of India moved sideways with a positive bias last week. The short-term trend in the stock is up since the recent trough at Rs 995. But there is a strong short-term resistance at Rs 1,230. A weak start next week will take the stock down to Rs 1,080 again.

The short-term outlook will, however, turn negative only if this level is penetrated. Short-term investors can hold their long positions with a stop at Rs 1,070.

Conversely if SBI holds above Rs 1,140, it can move on to Rs 1,274 or Rs 1,356 over the upcoming weeks.

The medium-term range for SBI is between Rs 1,000 and Rs 1,500.

Infosys

Infosys meandered sideways initially and then plunged lower towards the support at Rs 1,100 indicated last week. Though the stock lost over 2 per cent last week, it is holding well above the Rs 1,100-support. As mentioned in our previous column, there is long-term support at Rs 1,100 and a rebound is possible from here. If this level is breached, subsequent supports are at Rs 1,040 and then Rs 940.

Resistances for the week ahead would be at Rs 1,160 and Rs 1,220. The 50-day moving average at Rs 1,260 will be the key medium-term resistance. Investors can buy the stock on a firm close above this level.

Tata Steel

Tata Steel built on the gains recorded in the previous week to move higher to an intra-week peak at Rs 226. Weekly volumes continued to be strong reinforcing the view that a sustainable trough could be in place.

The stock can move higher towards Rs 250 in the near-term. Downward reversal from here will result in a sideways move between Rs 150 and Rs 250 for a few more weeks.

A weekly close above Rs 250 will herald an up-move that can take Tata Steel to Rs 328 or Rs 360 over the medium-term. Investors with a medium-term perspective can buy in declines with a stop at Rs 140.

ONGC

ONGC too moved in a very narrow range in the first three sessions before recording a sharp decline on Friday.
The short-term trend in the stock is currently sideways between Rs 640 and Rs 700.
However, the floor of this range can be penetrated and the stock can decline to Rs 615 or even Rs 533.
The bearish view will be mitigated only on a close above Rs 740.
The medium-term trend in the stock is down.
But as we have been reiterating, the presence of long-term support in the band between Rs 570 and Rs 600 makes a rebound likely from here.

Nifty future remains at critical stage

Nifty December future staged a sharp recovery of 7.8 per cent over the week to end at 2921.7 points against its previous week's close of 2711.1. It, however, ended almost at par with the Nifty spot, which ended the week at 2921.35. The series also saw a steady build-up in open interest positions.

Follow up

1) We had advised traders to go long on Nifty future keeping the stop-loss at 2550;

2) We also advised traders to consider short straddle by using 2700 strike.

While the first strategy would have yielded handsome gains, the second strategy is still slightly out of the money. Traders can continue to hold on this strategy (short straddle) as was advised last week.

Tata Steel: We had advised traders to go short on the stock keeping the stop-loss at 215. The stop-loss however would have been triggered as the stock price remained firm last week.

Nifty future outlook

The Nifty future is on the verge of breaking the crucial resistance level of 2950. It has been hovering around 2450-2950 level for quite some time. As has been previously written in this column, the Nifty future on breaching the 2950 mark, can achieve the next target level of 3250 quite easily. The Nifty future finds the immediate support at around 2750 and the big crucial support at 2450. A break below that level can take it to 1880-1950.

India VIX or Volatility Index broke below its psychological 50-point mark on Friday to end at 49.23 points. That said, the number is still quite high. The index, which measures the immediate expected volatility of Nifty has been hovering around 60-95 range for quite some time.

Both 2900 and 3000 calls saw marginal accumulation in open interest positions while 2800 call witnessed a drop of 5 per cent in open positions. On the other hand, Nifty December 2800, 2700 and 2600 strikes added quite heavy open positions, particularly puts of the first two strikes. This indicates the emergence of put writers in 2800 and 2700, which could act as strong support for Nifty future.

Recommendation:

Consider the following two strategies:

1) We expect the positive momentum in Nifty to continue. Traders can, however, consider going short on Nifty future, if it opens on a strong note (above 3000 point mark). In that case the stop-loss can be placed at 3250.

2) On the other hand, if it opens on a negative note, traders can consider going long on Nifty future keeping the stop- loss at 2550.

3) Consider short straddle strategy using 2900-strikes. While the 2900 call closed the week at around 123.75, the put ended the week at 101.3. This strategy is best suited if one considers the market to move in a narrow range. While the maximum profit in this strategy could be the premium earned, the loss can be unlimited.

Stock futures

DLF (275.5)

The stock has recovered quite sharply in the last few days. It now faces resistance at 300 and support at 200.Traders can consider going short on the stock if it dips below 265. In that event, the stop-loss can be placed at 300. The stop-loss has to be adjusted suitably to cover the profit.

FIIs trend

The cumulative FII positions as percentage of the total gross market position on the derivative segment as on December 11 stood at 31.87 per cent. Foreign institutional investors were predominantly net buyers last week. They now hold index futures worth Rs 8,842.16 crore (Rs 6,126.88 crore) and stock future worth Rs 10,649.29 crore (Rs 9,143.61 crore).Their index options holding stood higher at Rs 13,580.75 crore (Rs 11,070.33 crore).

Strong & Weak futures
This is list of 10 strong futures:
RNRL, NDTV, J P Associat, Sterlite Inds, Nagar const., Tisco, IVRCL Infra, Geship & Rcom.

And this is list of 10 Weak Futures:
Bhushan Steel, Redington, Purva, Havells, Ansal Infra, HCL Tech, Jindal Saw, BRFL & Tulip.

FII DATA
FII
12-Dec-2008 -16.52
DII
12-Dec-2008 325.81
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Arvind Parekh
+ 91 98432 32381