Indian Stock Markets next week – Whither?

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.

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