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Technical View: Cash Market

Bulls tried to show strength above 5125-5160 levels, but could not close the week above 5160 levels, which shows
Intermediate sideways trend is continuing. Nifty’s long term uptrend is still intact but short term trend is down. Decisive
price strength may be seen, if Nifty maintains above 5200 levels. However, Nifty has good support at 4950 levels. If Nifty
respect 4950 levels then some volatility in 4950-5200 range may be seen. On maintaining below 4950 levels, selling
pressure till 4700 levels may be seen.

For trading during the coming trading sessions, trend deciding level is 5135. If Nifty shows strength above 5135 levels
then we may see rally to 5200/5260/5300 levels. If Nifty doesn’t sustain above 5135 levels then decline to
5025/4950/4850 may also be seen.

Technical View: NIFTY Future

Nifty May Future opened at 5080 touched the high of 5218 and then due to huge long unwinding coupled with short
buildup tested the low of 5058.20 & closed at 5083.65. Nifty fut faced strong selling, as we have mentioned in our last
weekly report. Short term support for Nifty fut is 4800, possible resistance will be 5150. If Nifty future decline below
4800 levels then selling pressure till 4750/4600 levels may also be seen.

Trading strategy for Medium term Traders: On Medium term basis, Nifty has support zone of 4800-4850 Medium term
resistance zone is 5150-5200. Selling on rallies may be considered in the zone of 5150-5200 level with the short term SL
of 5240 for the target of 5000/4900/4800.

Trading strategy for Short term Traders: We are recommending sell on rallies strategy for the short term traders. Sell
position may be taken on rallies in the zone of 5100-5150 with the SL of 5180 for the target of 5050/5000.

For day-trading purposes on Monday: Short position may be taken in resistance zone around 5100 with the SL of 5130,
for likely target of 5050/5020.

News Roundup

• India’s benchmark index, Nifty closed in green with a
increase of 1.5% for the week ended 14th May ’10 in
line with the Asian markets but underperformed the US
and European indices.
• Index of Industrial Production (IIP) posted sixth
straight double digit expansion in Mar’10 driven by
robust manufacturing output. IIP grew by 13.5% y-o-y
in March’10 as against 15.1% in Feb’10. Partial
withdrawal of stimulus is one of the factors contributed
towards the m-o-m decline in IIP nos. The indices of
industrial production for manufacturing mining and
electricity posted a growth of 14.3%, 11% and 7.7% y-
o-y respectively. For FY10 the industrial activity has
expanded by 10.4% against 2.8% in the previous year
reflecting the extremely strong recovery after the global
economic crisis. The indices of manufacturing ,mining
and electricity grew by 10.9%, 9.7% and 6%
respectively in FY10
• Wholesale price-based (WPI) eased to 9.59% y-o-y in
April10 as against 9.9% in March’10 driven by lower
sugar prices. Meanwhile w-o-w Food inflation index
rose to 16.44% for the week ended on May 1st as
compared to 16.04% as on week ended 24th April
driven by higher vegetable price as heat wave in the
country damaged the perishable food.
• SEBI has directed asset management companies to
disclose investor complaints on websites and annual
reports. SEBI also directed to upload 2009-10 data by
June 30, 2010. Meanwhile SEBI moved Supreme Court
challenging the decision of the Security Appellate
Tribunal (SAT) that held that financial investors like
PEs and VCs do not acquire controlling stake in a
company by just picking up more equity.
• To give a boost to infra investment RBI eased overseas
borrowing rules for Infrastructure Finance Companies
(IFCs). As per these guidelines IFC’s will not require
central bank's nod to raise overseas funds equivalent to
or less than half of their own funds.
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• India’s forex reserves stood at $276.23bn as on 7th However this is the fourth straight month of growth
May’10.This shows a decline of $3.39bn over the after worst slump in the economy. Export demand
reserves of $279.63bn as on 30th April10. helped the GDP to remain in positive side.

• In spite of restrictive measures, China’s inflation
accelerated and property prices rose by a record in
April, increasing pressure on the government to raise
interest rates further. China’s consumer prices rose by
2.8% y-o-y, the fastest pace in last 18 months and
property prices grew by 12.8% y-o-y in April.
• Foreign Direct Investment (FDI) in China jumped
24.7% y-o-y to $7.35bn for the month of April on
account of government’s relaxed rules to attract
investors. This is straight nine month rise in FDI for
china.
• UK’s unemployment rose 53,000 to 2.51 million in the
first quarter, the biggest rise in 16-years meanwhile in
the 1st quarter UK’s budget deficit widened to the most
since World War II. Consumer confidence also failed to
recover from the biggest drop in almost two year owing
to uncertainty about the election and proposed
government spending cuts.
• US Jobless claims fell slightly by 4000 to 444000 as on
7th May’10 indicating that unemployment rate in US is
still under pressure. The current unemployment in US is
9.9%

• Financial markets welcomed the $1trillion loan • The overseas developments will influence our
package, unveiled to avert the sovereign debt crisis in markets. The reported lack of unanimity among the
Europe that threatened to slow global growth. members of the euro zone has added to the concern.
Important corporate results in the following week are
• Lackluster consumer spending resulted a negligible Larsen & Turbo, GAIL, NTPC and ITC
GDP expansion of 0.1% for the first quarter in France.

MARKET INDICES
INDICES 7-May-10 14-May-10 Change Difference
BSE
Sensex 16769.11 16994.6 1.34 225.49
Bankex 10505.68 10845.52 3.23 339.84
IT Index 5135.15 5246.3 2.16 111.15
Metal Index 15961.82 15892.3 -0.44 -69.52
FMCG Index 2818.32 2886.04 2.4 67.72
Cap.Goods Index 13248.48 13226.85 -0.16 -21.63
Realty Index 3158.79 3289.7 4.14 130.91
Consumer Durables Index 4504.36 4654.01 3.32 149.65
OIL & GAS 9820.61 9871.6 0.52 50.99
AUTO 7515 7792.42 3.69 277.42
Healthcare Index 5314.49 5366.53 0.98 52.04
PSU Index 8907.05 8934.18 0.3 27.13
Mid-Cap Index 6834.25 6942.06 1.58 107.81
NSE
S&P CNX Nifty 5018 5093.5 1.5 75.5
Bank Nifty Index 9276.1 9589.05 3.37 312.95
CNX IT 5726.6 5839.75 1.98 113.15
S&P CNX 4182.25 4236.65 1.3 54.4
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18000 5
16000
4
14000
12000 3
10000
2
8000 7-May-10
6000 1
14-May-10
4000
0 Change
2000
0 -1

INDICES 7-May-10 14-May-10 Change Difference

US Market
NASDAQ 2265.6 2346.85 43.58 81.21
Dow Jones 10380.43 10620.16 2.31 239.73
S & P 500 1110.88 1135.68 2.23 24.8
European Market
FTSE 100 5123.02 5262.85 2.73 139.83
CAC 40 3392.59 3560.36 4.95 167.77
Asian Market
Nikkei 10364.59 10462.51 0.94 97.92
Strait Times 2817.21 2855.21 1.35 38

12000 6
10000 5
8000 4
6000 3 7-May-10

4000 2 14-May-10

2000 1 Change

0 0
NASDAQ Dow Jones S & P 500 FTSE 100 CAC 40 Nikkei Strait
Times
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Outlook for the Week

Nifty opened the week on a positive note at 5026.60 levels and showed some strength till Thursday and Nifty made high
at 5212.70 levels. On Friday, Selling pressure was seen from resistance at 5200 levels and Nifty declined below 5100
levels. Nifty closed the week in red at 5093.50 levels with 1.50% gains. Volumes have been lower than previous week.
Last week we wrote, “Bears broke crucial support in 5125-5160 range on downside, which shows intermediate up trend
has again turned sideways”. Bulls tried to show strength above 5125-5160 levels, but could not close the week above
5160 levels, which shows Intermediate sideways trend is continuing. Nifty’s long term uptrend is still intact but short
term trend is down. Decisive price strength may be seen, if Nifty maintains above 5200 levels. However, Nifty has good
support at 4950 levels. If Nifty respect 4950 levels then some volatility in 4950-5200 range may be seen. On maintaining
below 4950 levels, selling pressure till 4700 levels may be seen.

For trading during the coming trading sessions, trend deciding level is 5135. If Nifty shows strength above 5135 levels
then we may see rally to 5200/5260/5300 levels. If Nifty doesn’t sustain above 5135 levels then decline to
5025/4950/4850 may also be seen. NIFTY Futures View Nifty May Future opened at 5080 touched the high of 5218 and
then due to huge long unwinding coupled with short buildup tested the low of 5058.20 & closed at 5083.65. Nifty fut faced
strong selling, as we have mentioned in our last weekly report. Short term support for Nifty fut is 4800, possible
resistance will be 5150. If Nifty future decline below 4800 levels then selling pressure till 4750/4600 levels may also be
seen.

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