Nifty Expiry time

The market has opened on a negative note. The Nifty on
the daily chart is trading in a range of 4450 and 4250,
which are crucial levels. We expect the momentum to be
positive and volatility on intraday basis. Market breadth
is positive with 581 advances and 535 declines. Daily
momentum indicator has given a negative crossover and
is trading above the zero line. On the daily charts, support
at 4235 and strong resistance at 4435 are indicated.
On the hourly charts, an inverted head & shoulder pattern
has formed with a support at 4248 and resistance at 4400.
The momentum indicator has given a positive crossover
and is trading above the zero line. Strong support at 4275
and a very strong resistance at 4331 are indicated on the
hourly charts.


Tata Steel has gained momentum and is likely to test Rs650
on the upside. Infosys seems to be having support around
Rs1,695 and on the upside is likely to test Rs1,850. Metal
sector has gained momentum and is expected to move
upward.

Gold gets its bounce back on global cues

Taking a cue from global markets, gold prices bounced back in local markets on Wednesday as surging crude prices boosted the yellow metal’s appeal as an inflation hedge. The sliding dollar also boosted buying sentiment to some extent. In Mumbai, prices of standard and pure gold shot up by Rs 200 and Rs 205 to Rs 11,895 and Rs 11,970 per 10 gm, respectively. While in Delhi the yellow metal breached the Rs 12-k-mark to close at Rs 12,030 per 10 gm, it rose by Rs 195 at Rs 12,135 per 10 gm in Kolkata. Chennai markets saw a gain of Rs 70 as the metal closed at Rs 11,955 per 10 gm. In London, spot gold rose to $828.35/829.55 an ounce from $822.90/824.30 in New York on Tuesday.

Oil rises for 3rd day on Gustav concerns

Oil rose for a third day on Wednesday, boosted by the possibility that tropical storm Gustav could become the first major storm since 2005 to threaten Gulf of Mexico oil and gas installations. Crude for October delivery was up 93 cents at $117.20 a barrel by 22:00 pm IST after settling up $1.16 on Tuesday. London Brent crude was up 74 cents at $115.37 a barrel. Oil could head towards last week’s near-three-week high of just above $122 a barrel in the next few days depending on the weather in the Gulf of Mexico, said Masaki Suematsu, analyst at broker Newedge in Tokyo.

Rollover worries pull Sensex down 185 points

BENCHMARK indices shed more than 1% on Wednesday, a day ahead of the derivative contracts expiry, as it is widely felt that most traders holding long positions are not keen to roll them forward to the next series. Lack of positive triggers — both at the local and international level — is keeping bulls on the backfoot, say brokers. Adding to the gloomy outlook, the 50-share Nifty slipped below the psychological 4,300-mark to close at 4,292.10, down 45 points over its earlier close. The 30-share Sensex fell 185.43 points to end the day at 14,296.79, down 1.3% over its previous close. Equities started off on a firm note, but were unable to hold on to their initial gains due to the indifferent trend in key Asian markets. Geopolitical tensions because of Russia’s aggressive stance over Georgia, and continuing worries over the subprime crisis kept investors in world markets jittery. Crude prices inching up towards the $120 per dollar mark, and record high inflation in South Africa completed the gloomy picture. Back home, investors were cautious ahead of the inflation data and GDP report to be announced in a couple of days. The finance minister is confident that the economy will log 8-9% growth in the current fiscal, but not many share his optimism. Analysts expect the market to be volatile on Thursday because of the current month derivatives contracts expiry. “We expect Nifty to find support at 4,200 and probably go to 4,600 within a month,” said Vinit Birla, technical analyst at Pranav Securities. The rupee strengthened 0.2% to 43.75 a dollar, but investors continue to be cautious. Of the 30 Sensex stocks, 26 ended in the red. Hindalco, Tata Steel, Infosys and Mahindra & Mahindra were among the handful of gainers. Overall, three shares fell for every two that rose. Overall trading volumes were muted, with both exchanges together clocking over Rs 60,000 crore worth of turnover. This is a low figure on the previous day of the derivatives expiry. Among sectoral trends, all the BSE sectoral indices ended in the red, with BSE Bankex and BSE Reality faring the worst. The rate-sensitive indices plunged 3.5% and 2.2% respectively. Global credit rating agency Moody’s expects RBI to further tighten monetary policy by way of rate hikes, to contain inflation. The government will unveil weekly inflation data after trading hours tomorrow.

Keep An Eye On Resistance

August 24, 2008- Market SummaryIt was a week of mixed results as market participants tried to discern the future direction of the broad market indexes. Many traders are attributing the market's indecision to nearby resistance levels. These levels of resistance, which are shown on the charts below, are causing many traders to question whether bullish rallies will be able to sustain a longer-term move higher. The chart of specific interest this week is of the Russell 2000 because it bounced off the identified resistance level and it is now trading near the support of the consolidation pattern that we mentioned in our previous report.
Last week, we also mentioned that the Nasdaq broke out of a period of consolidation (shown by the converging trendlines). As you can see from the chart, the momentum that was sparked after the rally faced resistance as the index neared the 1,995 level. It is important to note that the 50-day moving average remains below the 200-day moving average, so traders may want to wait on the sidelines in this market until confirmation of a longer-term reversal appears.

Inflation-defying gold offers a respite

AT A time when consumers feel the pinch on the back of spiralling prices of most essential commodities, the yellow metal has offered them some breathing space. The precious metal saw another round of free fall on Tuesday in the domestic markets in the wake of strengthening dollar and sliding crude prices. The relentless fall since its recent peak has weakened the metal’s appeal as a hedge against inflation. In Mumbai, the prices of standard and pure gold tumbled by Rs 95 and Rs 90 to Rs 11,695 and Rs 11,765 per 10 gm, respectively. “As the prices slump by nearly Rs 2,000 per 10 gm in six weeks, consumers have already started their festival and marriage shopping well in advance as the current prices are most ideal for them,” said a leading bullion merchant in Mumbai’s Zaveri Bazar. The fall in prices has brought in consumers back to stores where sales have reportedly jumped nearly 10 times since the price fell below Rs 12,000 per 10 gm. The price of yellow metal touched a historic high of Rs 13,680 per 10 gm on July 15 this year. If prices stabilise between the Rs 11,000-10,500 level, sales could see another jump, he said. But the future direction of the metal will largely depend on the movement of the US dollar and crude price, he added. Dealers attributed the rising US dollar against the euro and a slide in crude prices as the main reasons for the yellow metal’s fall. A similar trend was reflected in other metros, too. In Delhi, after touching an intraday high of Rs 11,960, gold plunged by Rs 160 to Rs 11,800 per 10 gm in late trade as stockist took profits after a meltdown in the global markets. While, in Kolkata, spot gold lost Rs 80 to Rs 11,940 per 10 gm, it, however, rose by Rs 25 to Rs 11,810 per 10 gm in Chennai. In domestic futures, gold for October delivery fell by 1.2% to Rs 11,593 per 10 gm on the Multi Commodity Exchange. In London, gold bounced back as investors returned to market after the dollar lost ground against the euro and spot gold rose to $828.55/829.55 an ounce from $820.20/821.40 in New York on Monday.

50% of demat a/cs hold no shares

IT’S not just asset management companies in the country that are into the number game for shoring up their assets under management. The two stock depositories, NSDL and CDSL, are not far behind. A significant number of demat accounts — as much as 50% — with the two depositories are without any shares in them, an official with one of the depositories told ET. The number of such accounts usually rises when the stock market goes into a downturn. However, the official said even if such periodic fluctuations were to be discounted, the number of zero share accounts at both depositories would account for nearly 50% of the total accounts. Market watchers say many investors would have opened multiple accounts within the legally-permitted limit, during the IPO boom in a bid to apply for the maximum number of shares under the retail investor quota. National Securities Depository (NSDL), promoted by the National Stock Exchange (NSE) is the larger and the older depository, but the Bombay Stock Exchange (BSE)-promoted Central Depository Services (CDSL) has been catching up in recent years. A detailed email sent to NSDL went unanswered despite repeated phone calls, but CDSL furnished some information on the empty demat accounts. It said around one third of its ‘active’ accounts are without any shares in them. This works out to a little over 17 lakh accounts. “It is observed that this figure increases in a bear market as a lot of investors liquidate their portfolios and wait for the bull phase to start when they resume purchases,” the CDSL official said while explaining the zero balance accounts. Despite the market moving sideways in the past eight months since January, both the depositories have shown fair growth in the number of demat accounts with them. While accounts with NSDL have grown 13% in this period to over 96 lakh accounts, those CDSL have risen by more than 50% to around 53 lakhs. The ongoing rivalry between the two depositories for claiming ownership over maximum demat accounts could be another reason why NSDL and CDSL are not keen to close down these empty accounts. When a stock market investor (called beneficial owner in technical parlance) opens a demat account with a broker or a bank, the latter in turn approaches either of these two depositories, which store shares in the electronic form. In the past 12 months, NSDL and CDSL, India’s two stock depositories, have been fighting each other on a host of issues. CDSL was formed in 1999 and has been aggressively trying to garner market share for opening demat accounts. However, NSDL even today owns more than two-thirds of all the demat accounts in the country.