Talk about interest rate hike causes market jitters

Nifty above 5305 is in BULLS Hands

Stocks on D-Street might trade in a narrow range,after the Sensex lost more than a percent on Thursday due to profit booking. Do not expect a big rally in the indices, as it is clearly evident that there is lack of support at higher levels.

It looks like the market is in a selling mode, as traders expect the central bank to raise rates at its meeting on April 20. The inflation numbers for the month came in at a 17 month high adding fuel to fire. So the momentum is clearly in the favor of bears for now and any up move could be used to book profits or trim your holdings. There is good amount of selling in banking sector and this is likely to continue in the next week or so. Stay away from the Banking stocks.

There were some fire works in select Midcap stocks like Prime Securities, Kamat Hotels and Excel Infoways, which managed to register double digit gains. We recommend Shorting banks like IndusInd and Development Credit Bank for bears, who would like to short the stocks. It is not advisable to take bullish positions in the current market scenario and one could take stocks of the market in the later part of next week after the RBI meeting.

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Strong Quarterly numbers from JP Morgan and Intel lifted the spirits of investors on Wall Street sending Dow Jones higher by 100 points over the previous close to end at a 19 month high. The bull run started in March 2009, from the debris continues unabated.

While caution is the buzzword everywhere, many of the retail investors were left out in the current rally. Speculator/Operator activity is on a high and is likely to continue for some more time..We recommend investors to remind the popular phrase "Sell in May and go away". Valuations are no doubt stretched and stockmarkets need a cool off.

Given the current strength in cheap dollars driven rally, it is out of one's imagination how and when the correction would hit. While raising interest rates in the US is likely to be one key trigger, Chinese GDP has outperformed expectations and too much growth too early is definitely not what any central bank wants...Watch out for interest rate jitters in the next one month..

Indian economy is growing leaps and bounds but needs a cool off too before the next take off...Raising like a phoenix is dangerous in terms of technicals. V-Shaped economic recoveries ideally lack sustainability.

Stocks to watch today : FSL, Kohinoor Foods

Follow nifty trend just dont blindly short/long

US Markets managed to close above 11,000 benchmark, its 18 month high. But as usual the rally looks tired and might crack down on any hint of bad news. Asia is trading down with Nikkei sliding 110 points at the time of writing.

For the time being ULIP issue is burried with the Finance Ministry jumping in to broker a deal between SEBI and IRDA.

Infosys results will flag off the earnings season today. While Infosys as a trend decider has lost charm in the previous 2-3 earnings it still commands high respect from the IT group. Expect Infy to post better numbers while guidance may be muted and concerns might be raised in the currency front.

As always in this kind of run in the market we find many junkies moving up. The current rally is no exception and one should exercise caution here.

Keep a tab on hotel stocks Hotel Leela, Royal Orchid Hotels, Indian Hotels etc

IIP numbers todays and Infosys result Tommorrow

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Nifty strong only above 5405

Reliance Ind might see strong interest after the company agreed to pay $1.7 billion to form a joint venture to buy a stake in a shale project that could hold enough natural gas to satisfy U.S. demand for a decade.Any upmove in Reliance stock from Rs 1,123.00 level might give a big boost to the Nifty.

Ballarpur Ind is one stock that is looking hot after the stock gained more than 18 percent on a volume of over 34 million shares. The stock could consolidate at the current level of Rs 38, before making a further move up to Rs 46- Rs 47 levels. BAG Films, which was recommended by us in our prior reviews is another stock that is looking technically explosive, even at Sr 28 levels.

Brandhouse Retail and Ruchi Soya are other stocks that look interesting. Our recommendation Prime Focus scaled to news highs for the year and gained more than 13 percent to settle at RS 349 level.GATI , Rolta and Essar Oil are some of the stocks to watch out from 1-2 day, trading perspective.

Catious but a green start on cards

After flirting with the negative territory in the last two days, Indian stocks are getting ready for another leg of upmove. US Markets opened red yesterday only to close midly in positive zone.

While the current stretch in the global equities is driven by lower interest rates we believe soon (may be in a month) we will see a outflow of funds from global equities.

Speculators are ruling the roast on D-Street looking at the kind of stocks moving up. The story repeats and we advise investors to be extremely catious in illiquid stocks.

Two bright sectors : Cement && Realty sectors are looking good and we might see a spurt in both the sectors any time. Yesterday's trading action clearly points to an upmove in these 2 counters.

Stocks to watch out for intraday : Indowind Energy, Midday, Action Constructions, Geojit BNP Paribas

Indian Equities likely to take a back seat

US markets tanked today after a dismal crude oil inventory report. While US stocks continued their extended run except for a 10 day battering in June one should not forget the current rally is not powered by volumes.

Coming to Indian markets the midcap run is likely to continue further given the FII inflows. There are many unknown names that are running, reminding of yesteryear's crash landings. The next leg of rally will turn to stocks below Rs 20 and that signals a temporary halt to the current upward momentum.

Indian economy is undoubdtedly back on track but the current spike in equities do not augur well. Cheap dollars are driving the global equity markets and most of the central bankers know this pretty well. We will witness the rate hikes soon which might curb the inflows.

Stocks to watch intraday : Kingfisher Airlines, IL&FS Transportation, Hotel Leela, Jagran Prakashan, Anant Raj Industries

Stock market indices facing stiff resistance at current levels

Stock market indices are likely to consolidate at the current levels on Wednesday,as we are witnessing constant supply at higher levels. The mark is looking for fresh triggers to make a move and there are none in the vicinity at this point of time.Expect the Sensex to trade in a band of 0.5 percent

The Sensex has spent most of its time close to the dotted line yesterday, although there were some bright spots like the 'Realty'with help from DLF and Reliance Infra. As expected Midcap and Smallcap excelled even in a lacklustre market. We expect the trend to continue as traders and speculators are flocking to second rung stocks in hopes of making some quick money.

Shares of the new listing Persistent systems closed at Rs 404, which is a premium of more than 30 percent from the issue price. We expect the stock to make a move to Rs 430 level intraday, and traders to should exit at these levels. Our pick Prime Focus jumped 13 percent on huge volumes and we see this stock going places soon. Hold on to tis baby. Essel Propack, Essar shipping and Surya Roshni were other midcaps that attracted active traders.

Our pick HEG which was mentioned couple of days ago at Rs 340 levels reached Rs 363 yesterday and we recommend holding the stock for couple of days for further gains.Indo Asian Fuse Gear and Crest Animation are two stocks that might be worth watching for traders today