Markets Weekly For 8/12/08 To 12/12/08

The IIP numbers which will be announced ahead in the week might be negative to marginally positive in nature. Traders should note that the stimulus package might simply disappoint if the value of the same is insignificant in nature. It might be a cosmetic setup to make people believe that enough is being done to stimulate the Industry in the backdrop of the IIP numbers.

Crude oil prices have fallen more then 70% from its all time highs. Is crude heading the way it did in the 1970,s. I have no idea but the charts suggest the same. Will it head the way Jute industry moved in past. The government of India to generate employment now supports the Indian Jute industry. I have no idea on the same but a good number of oil fields are now operating below their marginal cost of production. Shorts to watch out will be in large cap stocks. There is a report on The Economic Times Edition of 6^th December that Reliance industry is seeing negative margins in some of its products. Classically the demand supply theory will help in price adjustment over the Long term.

The Fiscal stimulus package by the Government of India has not been announced as of now. I believe that one should see the minute details of the same. Is the government trying to increase the aggregate demand or is it trying to simply stimulate the economy using a cosmetic setup of excise duty cuts and export incentives.

In Nifty we are simply seeing a consolidation since three weeks. With consolidation there is a converging triangle visible in the same. Downward Breakdown signal for the same will be received if 2570 is broken, Further break of 2500 will confirm the same. At 2570 one should exit longs and a closing below 2500 will indicate fresh shorts. At the same time a closing above 2835 will indicate is broken Upward. A move beyond 2940 will confirm the same. Election results on 8^th of December will be one more indicator mentioned in previous weeks weekly notes.

Indices last week ended almost flat to mild losses with anticipation of rate cuts and yet to be announced stimulus package by the government of India. Sensex was down 1.5% this week but the real winners in this week are MIDCAPS & REALITY stocks which outperformed the broader markets.
Indian markets are following the global trend but the point of disappointment is about reacting to the news .Indian markets are absorbing the positive news and reacting on the negative news flow. We feel this would change very soon once we have a sustainable rally past 2950 on nifty.
One thing we could see positive in the markets this week is the bounce back of REALITY & METAIL stocks which were severely hit in the last latest carnage. IT was the only sector which lost considerably by more than 7% this week.
US markets on Friday closed green with late session buying and gained more than 2% which is positive going ahead for trade on Monday, also rate cut by the RBI and fuel cuts which in turn help in reduction of inflation will help the cause. The much awaited stimulus package which may be announced on Monday will certainly propel the markets and may help us crossing 3000 levels in the days to come. BANKs, REALITY, METAL, TEXTILE companies would be the front runners in this rally and we would regularly update on this regard. OIL marketing companies would be under pressure as the news of cut in petrol and diesel would impact considerably in the margins.
There would be some relief rally in Global markets as the bailout package for the Auto markers would be announced and also some plans on creating jobs would be unveiled. The rally may be short but it would be very fast.
We advice members to go long on Monday and it would be unwise to short the markets as the news at present and future looks to be positive and this would help bulls to take grip on the markets. If NIFTY sustains above 2950 for some days then we can certainly look out for 3250 in NIFTY or 10000 in SENSEX. We have one word of caution to the members ahead of the results. Indian companies would be announcing a very bad set of numbers this quarter and we would see markets to be extremely volatile in the days to come.

Monday we may see a bullishness in the begning as US markets were up over 3%.

Moving Averages (Simple) -

5 D	8 D	13 D	20 D	39 D	50 D	200 D
2700	2708	2687	2767	2917	3142	4255

Weekly Trend (08-12-2008 to 12-12-2008) Volatile and Mix

2370/2470-95/2570/2630 [NIFTY SPOT] 2770/2830/2895/2930-45

7810/8135/8400/8500/8670 [SENSEX] 9125/9330/9525

Descending triange pattern in Sensex with support at 8400-8500. Breakdown will lead to 6000 in sensex. Till then sensex will be range bound

FCCB Buyback Relibrisation
Positive for Many Stock

Watchout Stocks:

3i Infotech, Adlabs, Patel Engg, Rajesh Exports,RIL,PANTALOON
EDUCOMP,Ansal Infra,BHEL,RNRL,BankNiFTY

Few Speculative Trades>

Atlanta LTD Bse Code 532759 Buyer Freeze Series Expected

Maarg LTD Buyer Freeze Series Expected

Rohit FerroTech Buyer Freeze Series Expected

Energy Development 5-25% Upside Expected

POSITIONAL

Buy Educomp abv 2130 & Everonn abv 246

Sell TATA TEA(Close :544) on Every Rise With A Strict Stoploss 565 On Closing Basis.

Chart says Bearish GraveStone Doji Pattern.

ONGC : " Triangle Formation "
As Per the Chart if ONGC breaks below 650 with Volume, then non Stop Slide will Continue..

Sell ONGC

RELIANCE

On Friday, Stock unable to cross 1180 an important key Resistance,

Falling Crude Prices may dampen the Stock Sentiment in coming day, So if breaks 1030, Please do not Hold the stock for God's Sake. Panic Selling on Card. Reliance will spoil the mood on the street, may lead to test a new low for the market.

Stock Looks Safe only above 1180 with Volume

Support @ 1090 & 1050.
Resistance @ 1070 and 1215.

INFOSYS

If for any Reason, 1060 - 1090 Stock breaks below these levels with volume, then Exit all your delivery Holdings too.

Support @ 1110 & 1080
Resistance @ 1180 and 1220

BUY CRUDE IN RANGE OF 38-36. CRUDE OIL MAY PULL BACK FROM $ 38-36 LEVELS

BUY GOLD $725-705,GOLD CLOSE BELOW 11750 WILL FALL TO 11400 AND 11150.