we expect another choppy day as Reliance Industries’ better-than-expected results will be offset by bleak global cues. RIL has surprised the market by surpassing all optimistic estimates. The index bellwether may see some spark at least in early trades.
Auto and Realty stocks may hog the limelight amid news of fresh relief measures being considered by the Government.
Airlines may also gain on news that a cabinet panel may take up the proposal to allow foreign carriers to pick up stake in Indian airlines.
Overall, the key indices are likely to open flat, may rebound a bit but are unlikely to sustain any bounce
Tata Steel
We recommend a sell in Tata Steel from a short-term trading perspective. It is apparent from the charts of Tata Steel that after bottoming in late November 2008 at Rs 146, it rallied up to Rs 260. The stock price has appreciated almost 78 per cent between late November 2008 and early January 2009. However, presence of significant resistance at around Rs 250 triggered the stock’s reversal. Since January 7, the stock has been on a short-term down trend. While declining, the stock breached its 21-day moving average. On January 22, the stock conclusively penetrated its 50-day moving average by plummeting 5 per cent on above average volume. The daily relative strength index (RSI) has entered into the bearish zone from the neutral region and weekly RSI is also featuring in this zone. The moving average convergence and divergence also has entered in to the negative territory. We are bearish on the stock from a short-term perspective. We expect the stock’s current decline to continue until it hits our price target of Rs 160 in the forthcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 188.