CAUTION

The market caught everyone unaware, as it did yesterday. Nifty opened on a negative note and made a intraday low of 5205, before closing at 5228, down by 2.54% for the day. The markets were taking a breather, after yesterday's rally, but the bad news flow in the from of weak manufacturing data from Europe and  slowing economic growth in China along with CAG's shocking preliminary report of another scam and the railway minister's populistic measures, spooked the markets, by the time the European markets opened in the afternoon. The  market breadth was extremely negative with 303 advances to 1202 declines, while FIIs were net buyers to the tune of 246 crores and DIIs were net sellers to the tune of 133 crores in the cash market. Nifty futures closed at 5240, with a considerable loss in open interest and at 12 points premium to the spot. On the options. side the PCR rose to 1.18. On the put side there was massive shedding of open interest from 5100 to 5600 puts, with a corresponding addition of open interest from 5100  to 5600 calls. This entire activity shows, call writing resumed today, after a break yesterday and some more downside is expected in the market. As suggested on 19th March that it was necessary for Nifty, to close above the level of 5291 to continue the uptrend, but unfortunately it didn't happen and at the same time it has reached, very close to the the three week low,closing of 5220. The technical charts, both daily and weekly have given clear sell signals. However to resume the uptrend, Nifty has to close above the 5323 level. The levels to watch out for Nifty tomorrow, will be 5258, 5290 and 5307 on the upside and 5188, 5165 and 5111 on the downside. The U.S. markets are trading moderately in the red on the back good jobless claims data, while the European markets have closed deep in the red. Going forward it should be a buy on dips strategy.


STOCK PICKS


LT -  Buy 1269 - 1280 SL 1242 TGT - 1320, 1343
AXIS Bank -  Buy 1155 - 1170 SL 1130, TGT -  1210, 1223