Tuesday, July 5, 2011

Exhausted bulls: Will Nifty manage to cross over 5750?

It was an uneventful session on back of lacklustre volumes. The market moved in a consolidation phase due to lack of any positive cues. Investors seem to be waiting patiently on the sidelines for the forthcoming events line up in this month.

Earnings season to be kicked started by IT bellweather Infosys on July 12 will probably set the ball rolling. Other major events in July are release of industrial output data, inflation and monetary policy review.

The Nifty trended closer to the 5600 support but closed at 5632 down 18 points. The Sensex shut shop at 18744 down 70 points.

Jai Bala, Chief Market Technician, Cashthechaos.com feels that bears have dropped the baton and market has actually stopped at the key resistance under 5,720-5,750 region. “Although the larger trend still looks lower, the pace of the rise from June 20 low is putting doubts on the bearish case but it is still a neutral market,” he explained.

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Krishna Kumar Karwa, Managing Director of Emkay Global Financial Services doesn't expect any positive surprises this earnings season. "Any further upmove in the market will be on the back of positive policy action from the government which will be the key driver.”

Gaurav Doshi of Morgan Stanley Private Wealth Management believes that the correction is warranted after the amazing upmove seen recently. "Going forward, the Nifty is likely to remain range-bound between 5500 and 5800 levels," he said.

Stock specifically, Technical Analyst, SP Tulsian is negative on RIL . According to him, there won’t be any newed interest on the stock from a delivery or from an investment point of view.

“I wouldn’t be surprised even if the share corrects to about Rs 800 to Rs 810 in this series where one can contemplate as a trading buy in the stock or maybe even by the long term investors as a fundamental buy at those levels,” Tulsian elaborates.

Rajesh Jain, Independent Market Strategist suggests getting into infrastructure stocks for a long term horizon of about 18 months.

Some of the top bets of Mehraboon Irani, Principal and Head- Pvt Client Group Business, Nirmal Bang Securities  are Hexaware , Rolta and NIIT Technologies . Irani explains that if IT companies post mute earnings, then midcap IT stocks may fall and that would emerge as entry points.

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