Market Scenario 05/06/12

The markets recovered significantly from the lows of the day to close with moderate gains. Capital goods, realty, oil & gas and banking were the best performers in yesterday's session while consumer durables, FMCG and metal lost significantly.

The market breadth was negative with advances at 599 against declines of 826 on the NSE. The top Nifty gainers were JP Associates, Siemens, Bank of Baroda, L&T, while t the losers included GAIL, Jindal Steel, Tata Power, and Sesa Goa.

Another notable feature has been that the focus seems to be shifting from consumer related stories to other sectors. Keep a close tab over this trend to identify scrips.

Technical Analysis: The Sensex closed at 15988, up 23 points from its previous close, and the Nifty shut shop at 4848, up 6 points. On the higher side 4850 and 4900 are the strong resistance levels while on the lower side 4800 and 4750 are the strong support levels.

Suggested Strategy: The markets seem to have bounced back on short covering. The sharp upswing in the afternoon has taken the market participants by surprise. The upside correction may continue for some more time. However, this cannot be treated as trend reversal. The suitable strategy should be to wait and watch. Lower levels may be utilized to accumulate fundamentally sound stocks with a long term view.