Market Outlook 09.12.11

The opposition's demand for resignation of Mr. P. Chithambaram, the rejection of insurance amendment bill by the Standing Committee on Finance and bad inflation data dragged the market sharply yesterday to close Sensex at 16488.24 down 388.82 points, Nifty at 4943.65 down 118.95 and Nifty Fut at 4964.50 down 121.60. CNX Midcap Index was closed with 2.1% loss while BSE Small Cap Index was down 1.6% in the trade.

In our yesterday's newsletter we clearly wrote that market is showing weakness and there is a chance of 150-250 points correction. In intraday Sensex was down around 400 to 450 points and Nifty 150 points. Closing of Nifty below 4950 is a clear indication of further weakness but there is a chance of recovery in the market due to European Central Bank's decision of rate cut to reduce interest rate and the expectation on European summit to have a positive outcome to tackle the euro zone debt crises.

All most all world markets closed in red yesterday except US markets.

Nifty Watch for 09.12.11

Nifty may open gap down. SGX Nifty was down 54.50 this morning (at 08:19).
Nifty Fut has a strong support at 4889 and resistance at 5002. If Nifty fut break below 4888 it may go down up to 4854 and 4829.
If Nifty fut able to sustain above 5003 then it may try to hit 5040, 5070 and 5100

Past Performance

Day's (08.12.11) Performance

1. L&T Dec Fut Bought at 1330 hit SL 1313 - Loss of Rs. 4250/-
2. Reliance Dec Fut bought at 805.15 hit SL 791 - Loss of Rs. 3537.50
3. Buy Nifty Dec 2011 CE 5100 bought at 67 - holding