Bank of Baroda (SELL, between Rs700-703, Target Rs672): Bank of Baroda on the daily has violated trend line support of Rs690 and which also reinforces that Wave 5 of Five is in the last stage of progress which should atleast test levels of Rs650 before any signs of recovery. The MACD has been sustaining below the reference line and its 9DMA is about to test the neutral zone. Also despite gains in market stock has underperformed markets which also make case for further downside. We recommend going short on Bank of Baroda December Futures below Rs688 with stop loss of Rs714 for Target of Rs672. (Duration 5 days)

Tata Power (SELL, below Rs93.50, Target Rs89.50): Tata Power has broken down below the lower trendline of a trading channel which also coincides with lower Bollinger Band support, which suggest that the likelihood of upside over the short-term has diminished. For now, the risk/return of establishing long positions is less than ideal. Tata Power in last few trading sessions, had twice bounced back from the above mentioned support levels and in yesterday’s session it closed below it. Moreover, appearance of falling tops signifies the bulls inability to form higher highs. Based on above mentioned technical evidences, we recommend traders to short Tata Power December Futures below Rs93.50 with stop loss of Rs95.50 for target of Rs89.50.

Market Commentary for 23.11.11

The cheerful skies are seeing a colour change. After a small breather, world equity markets have resumed their descent.  A downward revision in US’ Q3 GDP is adding to the already bleak backdrop. But, the US indices didn’t witness sharp cuts. They were down marginally. European benchmarks also closed in the red following a spike in Spanish and Belgian bond yields. Meanwhile, the Fed has announced a new set of stress tests for US lenders. Minutes of the last FOMC meeting show that the central bank is mulling inflation targets.

The opening will be lower. Asian stocks are mostly down, although the Chinese market is showing some resilience ahead of provisional manufacturing PMI data. Japanese markets are shut for a holiday.

For India, the big worry right now is the relentless slide in the Rupee. This has increased the headache for policymakers who have their hands full with a whole host of problems. The first day of the winter session hasn’t inspired much confidence either. Hopefully, things will improve on this front. SKS Microfinance will be in focus amid reports of top-level reshuffle.