Dial D for Delicate

The markets behaved as expected and rallied for the first two days before profit taking on the third day of a short week which saw the markets surrendering more than half the gains The markets closed with small gains for the week and are now very delicately poised technically The BSE SENSEX gained 8182 points or 047 per cent to close at 1748602 points The NSE NIFTY gained 2735 points or 052 per cent to close at 532290 points The broader markets fared better with the BSE100 BSE200 and BSE500 gaining 089 per cent 100 per cent and 112 per cent respectively BSE MIDCAP and BSE SMALLCAP were big gainers and were up 201 per cent and 325 per cent respectively showing that the smaller stocks have fared well in the three days of trading during the week Amongst sectoral indices the top gainers were BSE CAP which gained 33 per cent while BSE PSU gained 207 per cent BSE AUTO lost 070 per cent IllustrationAmit Bandre Stocks In individual stocks REC was a big gainer and closed at Rs 22695 a gain of 1041 per cent IVRCL gained 747 per cent and the action in the counter would continue with Zee having made an offer to buy out the promoter at Rs 90 against the closing price of Rs 7120 PFC gained 663 per cent while BHEL gained 646 per cent The gold loan companies Muthoot and Mannapuram which were badly hammered week recovered with gains of 340 per cent and 1826 per cent FIIs continued their buying and were net buyers to the extent of Rs 1712 crore and domestic institutions bought shares worth Rs 144 crore The Indian rupee depreciated to Rs 5111 in the short week Bearish There is an ldquoisland reversalrdquo pattern formed on Wednesday which indicates bearishness For this to be reversed the markets need to open with gains today Monday and cross the 17550 on the SENSEX and 5360 on the NIFTY Assuming that these levels are not crossed the markets could weaken and consolidate before making another attempt to cross the level later during this week or next week The current momentum would have been broken after this fall and there would be good support at 17200 and 5175 respectively Action The week ahead would have lot of action with two IPOs from NBCC and MT Educare listing during the week Infosys would declare its results on Friday the 13th and the result season would kick off in full steam shortly This could help in deciding the trend and also how the remaining IT companies results would be Infosys also gives its guidance for the current year and quarter with its results The Coal India issue was partially resolved with a Presidential Directive being issued The directive is likely to benefit the shareholders of the company with the GOI being a 90 per cent shareholder The FSA Fuel Supply Agreement to be signed would be applicable to the extent of 80 per cent of longterm agreements for power supply of 20 years and imported coal would be supplied on cost plus basis The company would decide the penalty in case of shortfall This is a great victory for corporate governance and independent shareholders Hike The expected petro price hike has once again not happened and clearly shows the helplessness of the government in its coalition dharma to take much needed measures to curb subsidies There is talk now of reducing the excise duty on petrol so that the price to the consumer does not change but the oil companies have relief on the under recoveries Secondly this action would be more or less revenue neutral to the government as on the one hand they would be sacrificing revenue on account of excise duty which would be offset by lower payment of subsidies It would if done however be a big relief for the oil companies Season Infosys kicks off the result season with its March quarter and annual results on April 13 The markets look weak at the beginning and there is a big possibility that after remaining weak in the earlier part of the week are likely to regain lost ground as the weak progresses Global cues and trading patterns of FIIs are likely to decide the course of action the markets take this week Trading volumes have been poor and need to recover if the trend is to become clear The BSE SENSEX has support at 17430 then at 17357 then at 17211 and finally at 17075 points It has resistance at 17547 then at 17663 then at 17825 and finally at 17921 points The NSE NIFTY has support at 5306 points then at 5273 then at 5205 and finally at 5174 points It has resistance at 5339 then at 5373 then at 5427 and finally at 5474 points It39s a possibility that after opening weak and failing to cross the bearish gap last week markets may initially fall and then recover as the weak draws to a close Arun Kejriwal is founder of the Mumbaibased advisory firm Kejriwal Research amp Investment Services Pvt Ltd Readers are invited to read more about these and other issues on his website httpak57in Disclaimer No financial information whatsoever published anywhere in this newspaper should be construed as an offer to buy or sell securities or as advice to do so in any way whatsoever All matter published here is for educational and information purposes only and under no circumstances should be used for actual trading or making investment decisions Readers must consult a qualified financial advisor prior to making any actual investment or trading decisions based on information published here Any reader taking decisions based on any information published here does so entirely at his or her risku00a0