SENSEX,NIFTY TRADING LEVELS IN DETAIL DT:17.3.08

Dancing to the tunes of global markets and reacting to economic data in the form of weak IIP numbers, markets continued to be in a bearish phase. Encountering heavy selling on rallies the Sensex and the Nifty shed 215 points and 26 points to close at 15,761 and 4,746 during last week.

Expectedly market breadth continued to be very negative with many midcap and smallcap stocks hitting lower circuit filter regularly. It is pertinent to note that many B group stocks are already at 8,000 Sensex level and two year lows reflecting that markets are excessively oversold due to the negative sentiment.

Weak IIP numbers have raised doubts of India growth story coming to premature end and the possibil ity of an economic slowdown. Key event to watch in the week ahead will be US Fed meet and reaction of global markets to the outcome.

With two holidays in the coming week trading activity may be range bound with negative bias. Likely trading range for the Sensex is 15,300-16,600 and for the Nifty is 4,300-5,200. If it falls below last week's low of 15,230, the Sensex may slip to 14,600. Initiate trading longs if Sensex stabilises above 16,000 level.

F&O segment V olumes continuedintothe be on lower side derivatives segment. Low open interest at around Rs 65,000 crore reflects trader's aversion and disinterest for risk in highly volatile markets. Sentiment indicators like implied volatility, open interest and put/call ratio indicate further volatility with negative bias. Punters were seen avoiding stock futures and playing actively in index futures. Contrarians expect Nifty futures to touch at least 5,300 once before the end of current settlement.

Bulls hope US Federal Reserve governor Bernanke to come out with liberal cut and infusion of capital for relief rally. With markets in a strong intermediate downtrend, continuation of lower top-lower bottom trend is likely. Short sellers can use bulges to create fresh shorts. Avoid large positions till volatility subsides. Selling was seen across the boa-rd in nearly all the sectors.

Modest buying interest was seen in sugar counters at lower levels. Accumulate Shree Renuka, Balrampur Chini and Bajaj Hindustan at lower levels. Punters expect relief rally in PSU banks. BOI, BOB, Canara and PNB look good for comeback gains. With fertiliser prices at all time high. Accumulate Chambal, GNFC and GSFC.

Ahead of commissioning of the plant in October punters expect Reliance Petro to cross Rs 200 mark again.
Obsession over every bit of market news only raises the odds of overestimating risk. Punters are keenly awaiting advance tax numbers of major companies due on Monday to reassess whether weak IIP numbers are aberration compared to ground reality. Keep close watch on last quarter numbers to gauge whether Indian growth story is intact or the slow down is for real. Stock specific approach is the mantra for gains in these difficult times. ¦ Select stocks such as GSS America, English India Clay, Thomas Cook, PTL Enterprises and Balaji Tele are bucking the weak trend by clocking smart gains. Open offer from the parent company and possibility of higher revised offer triggered good buying in Thomas Cook. Book partial profits at current levels. PTL Enterprises, which was pre viously known as Premier Tyres, has reportedly finalised plans to unlock the value of its Kochi property. Use sharp declines to buy for price target of Rs 45.

Unlike other recently listed public issues GSS America has defied gravity to give smart returns. Reports suggest that limited subscription has led to cornering of stock. Orchestrated buying cannot be ruled out say observers. Positive news is on cards in Balaji Tele says company source.

Use the current decline in the recently listed V-Guard for buying. Good brand equity and results spell better price for counter when markets revive. Goof up in the relisting of English I Clay with a low base price of Rs 179 after the demerger of a division and subsequent remedial measure in fixing circuit filter at 20 per cent saw the scrip now tou-ch Rs 1,740 after being loc-ked at circuit filter for several days on the stock exch-anges. A similar goof up was seen in Gujarat Glass wherein the relisting was done at a higher base price saw the stock fall sharply after relisting. Whether the regulator will act is the million dollar question.