A morning walk down Dalal Street | Macro data, state election results hold key

What a comeback from the bulls. D-Street snapped the 3-day losing streak on Friday; however, it closed lower for the week.

Let’s look at the data. For today, Sensex ended 361 points up at 35,673. However, for the week, the index closed 1.4 percent lower.

The coming week will be guided by macro data as well as state election results. Apart from that movement of crude oil price, rupee FIIs flows as well as trade talks will be guiding factors.

Foreign investors have pulled put close to Rs 400 crore from the Indian stock market in the last five trading sessions amid weakness in global equities due to the arrest of a high-profile Chinese executive. This comes following a net inflow of over Rs 10,000 crore in November.

Markets will react to exit polls. Traders are advised to go long on a fresh breakout above 10950 levels on closing basis. Majority of market participants want a stable ruling government rather than one having a fractured mandate.

Most of the exit polls suggest that Congress is likely to make a comeback or at least give a tough fight to the ruling BJP in Chhattisgarh, Rajasthan as well as Madhya Pradesh. From a market point of view, the other two states like Mizoram and Telangana are not material to the markets.

Four out of five exit polls have shown Congress leading in Madhya Pradesh. India Today–Axis poll has given between 102-120 seats to the BJP, and between 104-122 seats to the Congress. Times Now – CNX has given 111 seats to the BJP and 109 seats to the Congress, NewsX-Neta survey has given 106 to the BJP and 112 to the Congress.

Nifty formed a bearish candle on the weekly charts

The key resistance of 10,920-10,940 is going to be tested again in the next couple of weeks.

Important weekly supports to be watched are 10,590-10,550 levels

Top three levels: 10,550, 10600, 10930

Max Call OI: 11000, 11500

Max Put OI: 10,000, 10200

We spoke to Sharekhan and here’s what they have to recommend:

Ujjivan: Sell| LTP: Rs 215.85| Stop Loss: Rs 227| Target: Rs 182| Return 15%

Axis Bank: Sell| LTP: Rs 603| Stop Loss: Rs 630| Target: Rs 535| Return 11%

Dabur: LTP: Rs 411| Stop Loss: Rs 395| Target: Rs 463| Return 12%