Nifty did manage to absorb yesterday's 100 point fall in DowJones and there was no major damage except a nominal cut of about 0.7% in today's trade thereby outperforming other Asian counterparts like Hangseng & Nikkei which were down 1.5% each. In the last few days there have been cuts by rating agencies on countries' economic outlook, first it was Dubai, yesterday it was Greece, and now S&P cuts Spain's economic outlook to negative. There could be a negative impact on global markets if more cuts like these are seen in future. Meanwhile due to Spain's cut in rating, Dollar has gained against Euro as Spain is an Euro-zone country and Dollar gaining is now a negative for Gold which has hit a 1 month low as it fell as much as 8% in last 4 sessions. Recovery can be expected in gold if it holds 1120$ which is a good technical support.
Nifty View:
The view remains the same, 5180 on the upper side and 5070-5050 on the lower side are the levels for the Nifty. Any move above 5180 or below 5050 will result to follow up buying or selling. Till then concentrate on Stock Specific moves rather than concentrating on Nifty.
Stock View: Today i am posting view on two of the stocks which might lead the next rally if at all it happens
Infosys:
If Nifty has to cross 5180 then some large caps has to participate and outperform the markets. Infosys seems to be one of them as the chart on the whole seems to be a very bullish chart and is holding on to the lower trendline from March lows. On the upside it has to close above 2480-2500 with huge volumes which will fuel the next rally.
Larsen & Toubro:
The second stock which is likely to outperform if and when there is a breakout above 5180 in Nifty is L&T. The stock always holds on to short term trendline since May 2009 which makes it a buy on dips candidate. Any closing above 1700 with huge volumes can propel this stock to 10-15% higher i,e around 1950 levels.
Have a nice trading day
Regards
Ankit
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