Weekly Market Analysis (14-18 June 2010)

Are we heading for a Double Top Formation ??

Last Week, Nifty & Sensex opened on a negative note on the back of global cues, recovered from the losses during the weak on account of short-covering & closed marginally 0.31% down for the week.

The Hungary/Greece factor has been completely discounted for. Markets may not now pay too much attention to this news unless something of much more serious magnitude props up from the Euro-Zone. Euro crashed to 1.19 vs the Dollar.

Globally,
For the Week ended 11th June, US markets closed approximately 2 – 2.5% higher. Even Europe managed to close in the green backed by the boost given by ECB, China ’s pension Funds & Germany’s court for stabilizing the Euro Zone ( FTSE up 0.74%, CAC up 2.9% & DAX up 1.83% ). Asian Markets also followed the global cues with all of them closing marginally in the green with the exception of Shanghai . Robust Export data from the Chinese markets also lent stability to the global markets.

In our Markets Last week,
IIP grows by 17.6% in April vs 13.5% in March. IIP output grew for the straight 7th Month in a row backed by a strong growth in Capital Goods sector & consumer durables.
Some serious delivery based Selling was witnessed in Real Estate Stocks with Sector heavy-weights like DLF & Unitech witnessing cuts of over 5-6% each.
IT & Metal stocks also proved to be draggers with both index losing over 2.5% each. Metal stocks faced cuts of over 4-5%.
Auto & Pharma Sector Stocks acted as defensive stocks with both index rising over 1.5 to 2 %.

Another important development was RIL entry into the BroadBand Internet market by taking over 95% equity of Broadband Infotel promoted by the Nahata Group for a whopping Rs 4800 crore. Even the payment made by Nahata Group for acquiring Pan – India BWA licence has been paid by RIL.

As already mentioned above about strong IIP nos, Monthly Inflation numbers are also due to be released earlier this week & are expected to be in double digits. This will call for some serious tinkering from the RBI over some policy tightening measures.

Another thing to keep an eye on is the First Installment of the Corporate Advance Tax payment (15th June) which will give us some rough idea about their Q1 2010 performance.

EGOM (Empowered group of Ministers) meeting with respect to Free Fuel Pricing is on 17th June (Thursday) . Hence special attention will be on Oil marketing Cos Stocks.

Again Last week, Nifty Future made a significant bounce back from the lows of 4937.65 upto 5138. But failed to cross that & sustain above that. Even week before last week, Nifty Fut made a high of 5134.9. It might signal a double-top formation.
Even Sensex has formed double tops at 17150 & 17131.

For the coming week,
Nifty Future If crosses & sustains above 5176, will move all the way upto 5280.
But If it fails to do so, it will find support at 5053. If it manages to breach that level & sustain below it, will fall all the way upto 4941. More weakness upto 4816 & 4685 only if 4907 is violated.

Regards,
Team Market View Investments
9987750901.

Ps : Views & Comments on the above Weekly Analysis is welcome. Pls feel free to write in at marketview@ymail.com