Market last week was a truncated one, but nevertheless it was full of action. The week began on a subdued note and Nifty closed at 2573 on Monday. But it held the support at 2550 and rebounded strongly on last two days of the week to close at 2720, gain of about 170 points from the lows of the week.

Global markets too, recovered after a initial setback in the beginning of the week. Dowjones index recovered from an intra-week low of 6516 to close the week with a whopping 10 per cent gain. European indices such as the FTSE, CAC and DAX recovered from multi-year lows on Monday to close with weekly gains of about 10 percent. Most of the Asian indices gained about 5% for the week.

So, what to expect next week ?

The near-term resistance for the Nifty is at 2760/2800. Profit booking is expected around these levels. The 50-day moving average at 2810 adds to its significance. If 2800 isn't taken out, it will imply that the near-term outlook for Nifty stays negative and the index can reverse down to decline to 2650/2550.




The current up-move is one of the sharp bear market rallies. A close above 2810 will make the near-term view positive for Nifty. Such a move will indicate that the index can move higher to 2900/3000 over the medium-term. On the other hand, a close below 2500 will take it down to 2250. Big move on the either side can be expected if either of the levels get breached.

Index heavy weights:

Reliance Industries: RIL witnessed a sharp up-move in the last two sessions that enabled it to gain about 10 per cent last week. RIL faces strong resistance at Rs 1,300/1320.Like nifty , RIL is also trading in a band of Rs.1150-1300.

State Bank of India: SBI was weak and the stock declined to Rs 896 last week but staged a recovery to close at 950.A strong close above Rs 1,000 is required to make the short-term outlook positive for this stock.A downward reversal is expected from Rs 1,000,which could take it down to 900/860.

Infosys : The stock closed the week with 6 per cent gain. The stock has strong resistance at Rs 1,320. A downward reversal from Rs 1,320 will pull the stock down to Rs 1,200/1,150.

Indian Stock Markets gained 4% last week and Nifty closed at 2948. Nifty recorded a high of 2969 and then moved sideways in a narrow band. Auto stocks have bounced back nicely, M&M gaining 16%, Maruti and Hero Honda gaining 9% each. Other non index gainers include Hexaware and Educomp up 50% for the week, for no big reasons.

Going ahead, the interim budget to be presented on Monday, which could provide some triggers for the market. Global markets could not make any progress last week. Disappointment came from unclear bail out package and grim economic numbers from Europe kept the lid on equity prices. More importantly , the DOW Jones index is crucially poised at 7800, after bouncing off from lows of 7700.

What to expect next week?

The Nifty has key resistances for the week at 3000/3050 and then at 3100. The current up-trend could extend a little further, depending on the interim budget and global markets.Breakout above 3050 will take Nifty to 3100. Conversely, inability to move past 3000 will signal impending weakness and a decline to 2860 and 2790.

Stock Levels for index heavy weights:

Reliance (1390): Reliance Industries moved to an intra-week peak at Rs 1,414 but was unable to penetrate this level.The area around Rs 1,400 is a strong resistance for the short-term.However, daily momentum indicators are weak, so it can decline to supports to 1340/1300.The stock is trading it is the upper band of its range between Rs 1,100 and Rs 1,400/1450.

Infosys (1254): Infosys reversed lower from an high of Rs 1,325.The stock has supports at Rs 1,220 and Rs 1,180. Reversal from either of these levels can be expected for short term.Break-out above Rs 1300 will take the stock to 1360.

SBI (1194): SBI closed the week with a 7% gain, while most of the other banking stocks looked weak and rangebound.Immediate resistances for the stock are at Rs 1,225 and then Rs 1,250.Supports in the week ahead would be at Rs 1,140 and then Rs 1,100.

Trader's favorites:

Reliance capital(433):Reliance Capital breached many of its long term supports and is currently halting around Rs 400. Resistance for the week exists at 460.Supports for the week are at 410/390.Below 360,the next long-term support band is between Rs 300 and Rs 320.

Aban offshore(455):From a life-time high of 5400, the stock has been trending downward incessantly. Like Relcapital and many other stocks, Aban too has broken major supports during the major sell-off.However, most recently Aban offshore has halted at Rs 415 that was also the 52-week low.Since then, the stock has been on a short-term up-move.The stock has resistance at 490/515.

Never confuse a single defeat with a final defeat - Winston Churchill

Indian Markets Last week: Nifty moved in a band between 2750 and 2870. Going ahead, the next week seems to be a positive one at least in the first half. The short-term up trend from 2661 can continue to take the index to 2950 /3000.Short term reversal can be expected from these levels.If the rally continues, Nifty will test the resistance band between 3070 and 3090.Supports for the week are at 2760 and 2660.The short term is positive as long as the index trades above 2760.

Global markets: There was a strong rally in global equities, last week and that made most markets close with hefty gains. Volatility came down after a sharp spike in the early part of the week.The 200 points spurt in Dow Jones on Friday took the index well above the critical 8000 level.And on Monday, the most anticipated bailout package is to be announced, which could decide the further course of the markets.

Stock Levels for index heavy weights:

Reliance (1343): The stock moved in a range before ending with up just Rs 17 of weekly gains. There can be an upside rally upto Rs 1,400. But the area around Rs 1,400 is a strong resistance where reversal can be expected.Supports are pegged at Rs 1,250/1200.The stock has not broken out this range for the past 3 months.

Infosys (1280): The stock did not break above the resistance at Rs 1,300. A downward reversal from here can pull the stock down to Rs 1,220/1160.The medium-term range for the stock is between Rs 1,070 and Rs 1,300.

Sbi (1118): SBI closed lower this week with 3 per cent loss.The 200 day moving average at Rs 1,180 will act as a strong resistance.The near-term view will turn positive only on a close above Rs 1,200. The long-term support is available at Rs.1000.

Nifty closed the month of January 2009 down 3% at 2874, but there was full of action throughout the month.The top gainers for the month were Infosys (15%), M&M (12%), Maruti and Herohonda (10% each) and among the top losers include Siemens,Rcom and PNB (24% each).

Now looking ahead, most of the quarterly results have come out and going forward there is lack of any fresh trigger on the local news front. A close look at the Nifty chart would give an insight of current market behavior.The nifty is trading in a range of few hundred points of 2650/2800 on the lower side to 3000/3150 on the upper side.

The formation in Nifty is similar to an ascending triangle due to the two peaks formed at 3160. The up trend from 2661 can take the index higher to 2900 or 2986. In short, the area between 2900 and 3000 is a strong resistance zone. If this zone is crossed, the index can head towards 3150.

But the medium-term view for Nifty would turn positive only on a weekly close above 3150. Conversely, the area around 2500/2650 will continue to act as a good medium term support.


Break of this range would give a decisive direction to the markets. Till then one can buy around the lower range and sell on rise to the upper range.Any big negatives could come only from global cues, which could impact our markets.

Meanwhile Gold is hitting new highs closing at Rs.1450 per gram. A 5 to 10% exposure can be made on declines.

We have an action-packed week ahead with the Reserve Bank of India set to announce its monetary policy review on Tuesday and the expiry of January derivatives settlement scheduled on Thursday. Volumes recorded last week indicate that investors and traders are in sidelines and they are in wait and watch mood. Foreign Institutions (FIIS) are once more in the exit mode, having sold close to $1 billion (Rs.5000 Cr) in January.

What to expect next week:

Nifty has declined below the key support level of 2750 last week, signaling the continuation of downtrend from 3150. The next supports for the week would be at 2600 and later 2550/2500. Short sellers should watch out for sudden upward reversal from this area.

Short-term resistance for the week would be at 2750 and 2800. Failure to move past the first resistance of 2750 would imply that the downtrend is secure.

Stock levels for index heavy weights:

Reliance Industries - RIL announced its quarterly results and it did not have any major impact.The stock moved lower from an intra-week high of peak at Rs 1,250 (freak high rate of 1335).The stock is in a trading range of 1100 to 1250.An rally would be limited to 1250,from here on. Break below of supports of 1100, would drag down the stock to 1000/930.

State Bank of India - SBI declined below the key support at Rs 1,140 on Monday, but remained range bound.Near-term view for this stock is not that bullish.The next major supports would be at Rs 1000 / Rs 940.The stock will face resistance at Rs 1,220 in the week ahead.

Infosys failed to move past the resistance at Rs 1,300 as indicated last week and declined to an intra week low of Rs 1,190. The stock has key support level of 1150. Breach of this level would take the stock to the levels of Rs 1,120/1,065.

As per last week review, Nifty recorded an intra-week low of 2701, before pulling up to close the week higher.The index moved in a narrow band between 2700 and 2850 for most of the week. Moving onto next week, major results from index heavy weights like Reliance, Wipro and Reliance Capital are due to be announced, which could be a major factor the trend decider.

Now for next week:

The short-term trend in the index is down, there could be some sideways movement before the downtrend resumes taking the index lower to 2700/2500.Resistances for the week would be at 2860/2900. Failure to move past the first resistance would indicate the downtrend to resume.Strong medium-term support around 2500 should act as a good support in sharp declines.

Stock levels for index heavy weights:

Reliance Industries - RIL rallied higher from the intra-week low of at Rs 1,067 to close the week with a 6 per cent gain. The short-term trend in the stock is down, major support being at 1050 and resistance at Rs 1,274. A downward reversal from this level will pull the stock to Rs 1,067/ Rs 1,000.

State Bank of India - SBI declined below the key near-term support at Rs 1,140 on Monday, but remained range bound.Near-term view for this stock is bearish. The stock will face resistance at Rs 1,220 in the week ahead. A movement in the band between Rs 1,140 and Rs 1,220 is likely for a few sessions before the stock declines to Rs 1000 / Rs 940.

Infosys announced its quarterly earnings, the stock surpassed the resistance at Rs 1,200 to move higher at Rs 1,307. High volume recorded on this counter during last week’s up-move denotes that buyers are interested in adding to their holdings at lower levels.The stock faces strong near-term resistance around Rs 1,320.Reversal from this level can drag Infosys down to Rs 1,100 again.

Just when it appeared as if the nifty would move past the 3150 mark, it was pulled down by Satyam Computers fiasco. Bears exploited the situation, thrashing stocks across sectors.Profit booking ahead of quarterly earnings announcement could partly account for the crash in some of the mid cap stocks that had recorded good gains over the past month. Volumes were significantly higher especially on Wednesday when the Satyam swindle came to light.

Now,what to expect next week?
Nifty reversed from an intra-week high at 3,147 to close 173 points lower. The weekly chart of the Nifty has been a one-week-up-one-week-down kind of move over the last four weeks.In other words, the index is confined to a narrow band between 2800 and 3150.The short-term view will be clearly defined only on a break-out beyond this range.

The index can resistance at 2,930 and supports exists at 2800. Short-term is positive as long as Nifty sustains above 2780.A strong close below this level will take the nifty down to 2701 / 2502.

Stock levels for index heavy weights:
Reliance Industries - Near-term resistance would be at Rs 1,208 and then Rs 1,274. The supports exists at Rs 1,090 and then Rs 1,020.The medium-term trend in the stock is sideways between Rs 950 and Rs 1,400.

State Bank of India - A reversal from 1150 can take the stock upward to Rs 1,260 or even Rs 1,300. Fresh long trades should be avoided in this stock on a decline below Rs 1,140. Any close below 1140 would take the stock to Rs.1000.

Infosys is one of the rare few stocks among the majors that have closed with a positive weekly close.However, another strong weekly close above Rs.1200 is required to reinforce this positive outlook. Subsequent targets for the stock are Rs 1,260 and Rs 1,307. Near-term supports for the stock are at Rs 1,140 and then Rs 1,060.

ONGC has failed to move past the resistance at Rs 740 is negative in medium-term view.The down move from the Rs 810 peak can now drag the stock lower to Rs 620 again. The stock has strong long-term support around Rs 600.Short-term supports for the stock are at Rs 668 and then Rs 627.Resistances in the week ahead would be at Rs 712 and Rs 734.