Nifty Below 5450

Nifty a weak note, under the leadership of the last meeting in January began to sell off in almost every heavy weight. U.S. markets fall at the back drop for the fourth consecutive day, tracking the tension in Egypt. Nifty has slipped below the 5450 level of panic selling and the tip was below 5400 points.

Investors are more cautious use of the Suez Canal, oil and Asian goods to Europe's growing important clashes between government forces and protesters demanding the removal of President Hosni Mubarak.

In frontliners, Maruti Suzuki (down 4.5% number -), Bharti Airtel, Reliance Communications, Jaiprakash Associates, Sterlite Industries, Tata Steel, Hero Honda, Tata Motors, BPCL, Sun Pharma, Wipro, DLF (number) L &T , TCS, Infosys, SBI, ICICI Bank and Kotak Mahindra Bank witnesses selling pressure was.

Siemens, however, jumped 16% after the open offer. Company bucks to buy an open offer of shares to 19.82% 930/share. Promoters currently hold 55% stake. Motion 25 is open and closed on March 13 in April

Dr. Reddy's Laboratories gained 3.3%, as it has received U.S. court approval to sell Allegra D24, CNBC TV 18-NW18 cited reports.

ONGC was 1.7%, as 7083 net profit of Rs 131 crore reported an increase in%

At 9:17 hours IST, the 30-share BSE Sensex was trading at 18,144, down 251 points and the 50-share NSE Nifty was at 5,449, down 63 points. 

The Nifty Junior fell 234 points to 10,620 and CNX Midcap lost 147 points to 7,733. About 107 shares advanced as against 663 shares declined on National Stock Exchange.

Midcap and smallcap space:


Mindtree lost 12% Ashok Soota retired company directors. Soota 1999 Mindtree the establishment.

Aban Offshore was the 2% and 8% Exide. Lupin, Ashok Leyland, United Phosphorus, S Kumar, REC, Apollo Tyres, South Indian Bank, Delta Corp., Best Galva and TVS Motor fell 3-5%.

10 things you should know before the opening bell

The turmoil in Egypt is a key concern for global markets at the moment the government imposed curfew was ignored for a second night and military jets and helicopters, some bearing the presidential seal, flew low over the centre of the city in a show of strength. Protesters, meanwhile, turned to the army and to a retired diplomat to maintain momentum in efforts to unseat Hosni Mubarak. Thousands gathered in Cairo's Tahrir Square to protest. More than 100 people have died in the turmoil so far

The US markets too closed near session lows on Friday as the civil unrest in Egypt sparked widespread selling. The S&P 500 was down nearly 2% and the Dow broke an eight-week winning streak.

10 things you should know before the opening bell

* And in economic data, the University of Michigan consumer sentiment index came in at 74.2 at the end of January. It was better than a preliminary reading of 72.7 and a median forecast of 73.2.
* The US commerce department said that the gross domestic product grew at an annual rate of 3.2% between October and December, outpacing the growth in Q3.
* The personal income for December is expected to receive a boost of 0.4%. November saw a rising figure of 0.3%.
* The Chicago PMI for January is expected to come at 65. The PMI index for December came at 68.6.

The European markets too were under pressure on Egyptian concerns. A weaker than expected overall GDP in US also affected sentiments despite a pickup in US consumer spending.

In the currency space the dollar rallied as investor demand for safer havens increased as a result of the crisis in Egypt. Crude prices too soared more than 4% in the face of growing unrest in Egypt.

And back home, it was a free fall for markets on Friday as the nifty breached important support levels of 5620 and 5550. The broader markets too tumbled and market breadth was a dismal.

Expect some action in the oil stocks as RS Sharma of ONGC says that he is confident that the Cairn-Vedanta deal will be resolved shortly. He adds that the government has to protect ONGC's rights and that the oil major is per se not against the Cairn-Vedanta deal.

Meanwhile, ONGC numbers came out after market hours on Friday---the company has posted numbers above estimates as income from gas pool account surprised on the upside. The lower DD&A was also supportive. However, auto major Maruti's Q3 results have come in below expectations. Margins were under pressure due to higher employee costs and higher royalty pay-out.

Some key earnings to watch for today include NTPC, Sun Pharma, DLF. a host of midcap banks like Andhra Bank, Canara Bank and Central Bank will also declare results.

Telecom stocks could be in focus this morning as telecom minister Kapil Sibal announced the broad parameters within which the new telecom policy will be formulated. Plans for a new spectrum policy are also on the anvil.

Recommendations: January 31 - February 04, 2011

Company	Recommendation	CMP (Rs.)	Target Price (Rs.)	Stop Loss (Rs.)
ACCLTD Feb Futures	Short	981.1	900	1030
VOLTAS Feb Futures	Short	200.2	180	210
JAIASS Feb Futures	Short	87.5	80	92

NOTE : This are just  technical views on market & stocks we are responsible for any kind of buy or sell. First analaysis the market then decide.

Will market pull back........

It was a scary session for the market. The sell-off across sectors during the latter part of the day sent the Nifty well below 5500-mark for the first time since September 6, 2010. However, it closed above that level. The 50-share NSE Nifty closed at 5512.15, down 92.15 points or 1.64%. The 30-share BSE Sensex slipped 288.46 points or 1.54% to settle at 18,395.97.

So far the Nifty is still above that September break-out level, 5,400, but there are fears among the investors that this is not just a bull market correction, but runs very close to becoming an eight-nine months or one year kind of a bear market situation.

How deep could be the downside?

Karvy Stock Broking sees further downside. “It is clearly selling by these big boys, otherwise the market wouldn’t have come down like this. We are in for a bearish move at least for while longer. We could see some more cuts from the current levels, approximately either 6-8%, hopefully.

Manish Shah, Head Technical Analyst, Fortune Financial Services (India) Limited also expects the markets to go down from the current levels. “In terms of Nifty cash, what has happened now is that the entire uptrend of higher tops and higher bottoms that we saw since March ’09 has been taken out. So, we are seeing first instance of lower low and a lower high in Nifty. What this means is that this entire trend could be reversing and we should be seeing some lower levels from here. I don’t expect the markets to immediately reverse from here probably move down to around 5,250 or so and then there will be a short-term bounce back. But, yes, the sentiment has been damaged substantially. So, it will take some time for the markets to find its feet again and then start going up,” he adds.

Prasun Gajri, CIO, HDFC Life is also bearish on the markets. “If one looks at the market as a whole, sure, I would still be reluctant to kind go overboard and declare that we have seen the worst of this market. So, there is some more pain to come.

According to Anand Tandon, CEO, JRG Securities also, the market should be on the downside for the next one quarter.

Is a pull back on the cards?

Deven Choksey, MD, KR Choksey Shares & Securities expects the markets to pull back from the current levels. "Somewhere down the line I think you are going to see some contra buying taking place," he says. Choksey sees 5,700-5,770 as the range on the upside for the Nifty.

Support for the Nifty:

Mitesh Thacker, Technical Analyst, miteshthacker.com says, the markets are definitely oversold. "Yesterday, with strong selling pressure from the FII side, we broke the 200-day average and we are seeing continuation of selling happening today also. So, I think we still don’t have signals of reversals as yet. My belief is that there could be some support coming in at levels of 5,400-5,380 which was the immediate bottom before the September rally started," he adds.

Tandon also feels that 5,400 is a technical support at the moment.

Should you buy?

Dipan Mehta, Member, BSE and NSE says, investors can enter the market now and average lower. “The risk-reward ratio is coming back in favour of taking long investment or long position in stocks,” he adds.

Baliga also advices long-term investors to start buying. “We have been asking long-term investors to keep investing in small way at every fall because you really don’t know as to where this would stop. Although we have a view that the markets could go to levels of around 5,200, but it’s difficult to call a bottom. So, at every major down day like the way it is today, I think it’s a great day to nibble in. So, one should be investing in a small way,” he adds.

Indian Stock Market

Market	Position	+/-
Sensex	18395.97	-288.46
Nifty	5512.15	-92.15