Market Outlook for 7th June

Hi,
We are having a volatile market from last few days. First Nifty touched 4800 then again some sharp pullback and now it is at 5100+.

If you look at daily Nifty graph you can see the big candles and range bound but fast movement from 4800 to 5200.

But the positive movement we got is because of the short covering. If some one has noticed the future discount got decreased drastically on Thursday close but on Friday close the discount increased again.

This show shorts are getting formed. If we get any bad global cues which are very likely because of Euro Zone Concerns and US Employment Data (which already came below expectation) it is quite likely that we may see fall in our markets.
Dow has also broken its 200 DMA.

The biggest news for market this Monday will be the Government decision for increasing the public stake in companies to 25%.
This is an actually a good step for the retail investor in the long term but it is point of debate how this will be going to impact in near term. The consequence of this will be lot of FPO.
But now the question comes up when so many big companies come up with their FPO within such a small span of time .Does the market is ready to digest such a big amount of FPO flood. If the answer is NO then the chances are that FPO will be discounted .
So the market may move southward.
This is just a speculation and statistics also states that as in last one year when there was ample of Liquidity government could raise only US $5.4 bn. But expected amount that will be needed per year after this FPO flood comes out nearly US$ 9 bn.

So Monday will be a decisive days where the market will be heading for near term.

I will recommend diluting and booking your profit at current levels and use the dips to buy and enter into the stock again at lower levels.

So I will go for SELL.
The risky traders can go for short on Nifty and Bank Nifty.


Many a technical analyst are in favor of long but I will still go for contra call and suggest short.

Their recommendations are taken from rediff money.

1:51 PM - Nifty F&O Call: Buy with target of 5170 and stop loss of 5065, says Hitesh Sheth of Prabhudas Lilladher on CNBC Awaaz. » Send to friends

1:48 PM - Nifty F&O Call: Buy with target of 5160-5240 and stop loss of 5070, says Husseini Wadharia of Techno Shares on CNBC Awaaz. » Send to friends

1:45 PM - Nifty F&O Call: Buy with target of 5165-5203 and stop loss of 5060, says Manoj Sachdeva of Hem Securities on CNBC Awaaz. » Send to friends

1:42 PM - Nifty F&O Call: Buy with target of 5150-5180 and stop loss of 5085, says Somesh Kumar of Karvy Stock Broking on CNBC Awaaz. » Send to friends

1:39 PM - Nifty F&O Call: Buy with target of 5170-5220 and stop loss of 4970, says Alpesh Furiya, technical analyst, on CNBC Awaaz. » Send to friends