Monday, February 16, 2009

All eyes on Interim Budget !

all eyes would be on the interim budget on Monday as the market is hoping for a lot of sops to revive a sagging economy. However, because expectations from the budget have risen considerably in the last few days, even a moderately generous budget could actually set a bearish undertone for the bourses. On the contrary, if the budgetary proposals beat or match market expectations, it could start the next leg of the stock market rally.
In terms of the Bombay Stock Exchange’s benchmark index, on its way up the Sensex is now likely to test its first resistance at 9,718 points. This has now become a moderate resistance level and may go easily in case rising prices are supported by rising volumes. Following this level, the next resistance is likely to come up at 9,929 points, which will also be a moderate level. However, the next resistance at 10,186 would be an important level and would offer a rising Sensex strong resistance. If the Sensex closes above this level, then the next resistance would come at 10,454 points.
However, going by the study of technical indicators, it is expected that the Sensex would face profit selling at 10,186 points and if it stabilizes around this level, then selling could intensify.
On its way down, the Sensex is likely to test its first support at 9,441 points. This is a crucial support level and investors should watch this carefully as a close below this level would be bearish and could signal more declines. Following this level, there would be minor support at 9,311 points.
Author Vipul Verma
Source : Livemint.com

However, if the selling momentum is high, then this level might not offer any ground to a falling Sensex. At 9,023 points, the short-term trend for the Sensex would be set.
For the S&P CNX Nifty, there is a strong resistance at 2,981 points going northwards. This is a moderate but important resistance level. If this level goes, then the next resistance would come up at 3,068 points, which would again be an important resistance level. This level might trigger some profit selling.
However, if the Nifty closes convincingly above this level, this would mean further gains, which might take it to the next resistance level of 3,140 points. This would be a trend-deciding level and if the Nifty is able to close convincingly above this level with good volumes, this could start the next leg of the stock market rally.
On its way down, the Nifty would test its first support at 2,874 points. This would be an important support level and a close below this level would be seen as very bearish. The next support level would then come at 2,820 points followed by the next support level at 2,754 points. A close below this level would be extremely bearish.
Among individual stocks, this week ICICI Bank Ltd, Housing Development Finance Corp. Ltd, or HDFC, and Housing Development and Infrastructure Ltd, or HDIL, look good on the charts. ICICI Bank at its last close of Rs434.40, has a target of Rs447 and a stop-loss of Rs419. HDFC at its last close of Rs1,540 has a target of Rs1,580 and a stop-loss of Rs1,487. HDIL at its last close of Rs87.75 has a target of Rs93 and a stop-loss of Rs81.
From my previous recommendations, Tata Steel Ltd touched a high of Rs203.85, which was well above its target of Rs196. Century Textiles and Industries Ltd hit a high of Rs186, which was well above its target of Rs173. Punjab National Bank hit a high of Rs417.95 and met its target of Rs414