Weekly Report August 25

Stock Market Outlook:
Weak global cues due to the credit market turmoil and financial crisis has created a lot of pressure in our markets. Interest rate sensitive sectors like banking, real estate and automobile witnessed intense selling pressure. A bounce back in crude oil prices also kept investors on the edge. The barometer index BSE Sensex declined 322.69 points or 2.19% to 14,401.49 in the week ended Friday, 22 August 2008. The S&P CNX Nifty lost 103.25 points or 2.33% at 4327.45 in the week. Foreign institutional investors (FIIs) sold shares worth Rs 1109.50 crore in August 2008 (till 21 August 2008). FIIs sold shares worth Rs 28,411.50 crore in the calendar year 2008. Mutual funds sold shares worth Rs 983.50 crore in August 2008 (till 21 August 2008).

Technical Outlook :
NSE Nifty (Last Closing: 4327.45)
As we have mentioned, the Indian markets have entered the selling mode after testing the target resistance level of 4640. Further downside is
expected to emerge in the market during the coming months.
The MACD has registered a negative crossing and RSI has fallen below 50 points mark - both indicating a short-term downside in the index.
The Elliott wave analysis of the NSE Nifty is indicating that the index has entered the 3rd wave of the 5-wave correction.
The recovery which the market witnessed in the closing day of last week will find resistance at 4365, followed by 4400. The Nifty is
expected to emerge into the next selling mode, before crossing 4435 level. On downside, 4240 will act as the first support for the
index. followed by 4140 and 4070.


Stock Market Week Ahead :
With no major key events scheduled in the forthcoming week, the market will closely watch global stock market cues. But it may turn volatile on
account of expiry of August 2008 derivatives contracts on Thursday, 28 August 2008. Market will closely watch developments on the Indo-US
nuclear deal. A two-day meeting of the 45 countries of the Nuclear Suppliers Group (NSG) began in Vienna on Thursday, 21 August 2008. A
green signal by the NSG is required for the deal to proceed to the US Congress for final ratification. As per reports, nuclear supplier nations at a
meeting on Thursday, 21 August 2008, proposed conditions for lifting a global ban on fuel and technology exports to India, a step required to
implement a US-India nuclear cooperation deal. A further rise in crude oil prices may act as a dampener for the stock markets

SEBI approves currency trading in NSE

SEBI approves currency trading in NSE

MUMBAI: India's first exchange for trading in foreign currency derivatives is likely to go live on the NSE's platform. NSE, the country’s largest stock exchange by volumes, on Tuesday got an in-principle approval from the Securities and Exchange Board of India (SEBI) to start an exchange to trade foreign currency derivatives, sources said.

According to plans, NSE will have a separate segment on its existing stock and derivatives bourse to trade in forex derivatives. It would also use its clearing corporation to settle the trades on the new segment.

“It’s not only the NSE brokers, most of the large and medium sized banks have been very supportive in NSE’s endeavour to start a currency exchange,’’ a source said. “They will get another asset class to invest in,’’ the source added.

22nd August 2008. Market Today

US markets exhibited a mixed trend with Dow Jones industrial average adding 0.11% and the broader Standard & Poor's 500 (SPX) index rising around 0.2%. The NASDAQ composite (COMP) declined 0.4%. The nearly $6 spike in crude oil prices impacted the markets negatively. Crude oil is currently trading at $121 a barrel and Gold is at $839 an ounce. European shares fell on persistent financial sector worries and a rising oil price, which reignited inflation fears. Britain's commodity-heavy FTSE 100 ended flat, while Germany's DAX lost 1.3 percent and France's CAC fell 1.4 percent. Rising commodity prices have buoyed the commodity dependent economies of Brazil and Argentina. Brazil’s Bovespa gained 1.01%, Argentina’s Merval rose 0.34% and Mexico’s Bolsa lost 1.23%. Sharp spikes on oil prices have negatively impacted the Asian markets since they import most of their energy needs. Japan’s Nikkei 225 lost 0.67% and China’s SSE Composite has lost 2.61%. Among the closely watched events in US is Fed Chairman Ben Bernanke’s speech on the economy.


The Asian markets are showing yet another gloomy picture in the morning today as many commodities are headed for their biggest weekly gain in 33 years. The expectation of strong demand again from China as the Olympics is coming to an end is bringing strength to commodity prices. Back home, we are going to address the fear of rate hikes again after a 12.63% reported inflation. The $6 rise in Crude prices will also put pressure on the economy. We cannot expect an easy walk over in nuclear deal, as some opposition is there from few of the member countries in NSG. Sensex is expected to open around 14140 level, which may act as a Crucial trend decider for today. A fall below this level may find support at 13990.But any intraday movement may face resistance at 14350 level above which we can expect short covering.

22nd August 2008. NSE / BSE Technical Analysis

22nd August 2008. NSE / BSE Technical Analysis

Further panic will be seen.

Expect 14086 & there after to 13912 & 13727.

Expect NIFTY fut. to fall down to 4252 & there after to 4203 & 4162.


BSE index: (14244) Consider 14316 & 14369 nearest & 14557 a solid resistance, selling on higher levels will be seen keep stop loss of 14584 to your sales.
Downward side it'll fall down to 14086 initially which is a crucial support to watch out for.
Break below 14086 further heavy selling will be seen & it'll fall down further to 13973 & 13912.
In very worst scenario break below 13912 it'll heavily fall down to 13727 & 13630. Cut shorts around 13727 & buy fresh keeping stop loss of 13630.


Nifty Future: (4280) Expect it to fall down further to 4264 & 4252 initially. Consider 4252 a crucial support.
Break below 4252 heavy fresh selling will drag it down further to 4162 & 4124. Cut shorts around 4162 & buy fresh keeping stop loss of 4124.
Upward side 4313 & 4331 nearest & 4393 a solid resistance, sell on higher levels keeping stop loss of 4426.

21st August 2008 Stock Tips

NAGAFERT: (42.75) Buy. Crossover above 45 huge up move will start.

SBI: (1445) 1478 & 1417 crucial trend deciders.

AXIS Bank: (674) Selling on higher levels will be seen.

ICICI Bank: (678) 690 & 650 crucial trend deciders for the day.

ONGC: (1036) Looks very weak. Sell.

RNRL: (99) 103.25 a solid resistance.