End of day summary and outlook for 12Dec06

It was a black monday followed by a black Friday. Huge fall in the markets. Correction was always round the corner. Over 570 points wiped out of BSE sensex in 2 days. There wasnt a single gainer in Nifty today. The over heated bank stocks finally saw some meaningful correction. The NSE Nifty closed at 3849.50 with a loss of 112.50 points whereas the BSE sensex closed at 13399.43 with a loss of 400.06 points. The FIIs were net buyers in the cash market for 334.21 crores, net sellers of huge 1250.56 crores in index futures and 82.62 crores in stock futures. This very well indicates that the correction is not yet over. The advance decline ratio was also very poor at 1 advancing stock to every 9 declining. The cut was deeper in the large cap stocks as compared to midcap and small cap stocks.

The outlook for the medium and long term is still bullish. The bull run is intact. In the short term I expect the Nifty to take support at 3720 levels. I donot see this level being broken shortly but if that happens then the next support for Nifty is at 3506 only. For tomorrow the markets will definately open weak and might see some recovery in the second half. 3720 is possible in intraday itself. On the higher side the resistance is at 3882 and 3934.

Disclaimer: The recommendations provided would be purely on my personal opinion and doesnot reflect any fund house interest or my personal holdings. I would not be responsible for the loss in trades undertaken based on my recommendations.