Market Outlook 19th Jan 2010

Nifty yesterday opened with a gap down and managed to bounce back in early trade.

Before 10 AM Nifty was back in the green and traded positively for the whole day.

It touched intraday high of 5289 and closed at 5274 with a net gain of 22 points from Friday's close.

As we mentioned in last edition of market outlook, it was bank stocks that were creating pressure on Nifty and it was only banking stocks that rallied the most and gave tremendous support to Nifty.

Nifty reversed from level of 5290 which is near its higher resistance level of 5297 and close to the psychological resistance level of 5300.

Nifty will behave strong only if it close above 5300 level at least once.

Next resistance for Nifty is at 5331 which will be tested once Nifty manage to trade above 5300 comfortably.

On Friday BankNifty closed below 50 DMA and it is a point from where we either see a bounce back or tremendous weakness.

Monday's bounceback in BankNifty is attributed more as a dead cat bounce on technical grounds and BankNifty must close above its important support level of 9014.

If it breaches this level again then we will surely see much lower level once 50 DMA at 8945 is retested.

One can carry long position in BankNifty with Stop Loss of 9025-9010 range.

Presently we can expect BankNifty to test 9235 in current rally.

Although concerns and fear of rising inflation which may force Government to take stern steps to curb inflation like hike in CRR or some more measures to curb liquidity may again create selling pressure in market especially in banking sphere.

Hence it is advisable to play in banking stocks with great caution.

Important Nifty Levels for Today
Nifty Pivot
5267
Support
5254	5231	5219
Resistance
5297	5289	5301

Important Bank Nifty Levels for Today
BankNifty Pivot : 9074
Support
9052	9022	8988
Resistance
9119	9149	9184

Stocks to Buy Today
All targets may not achieve just today.
NSE Symbol: HOCL
Buy with SL 50 T 59
NSE Symbol Geometric
Buy with SL 72 T 85