Indian Stock Markets: End of Tunnel???

6 a.m.- US stocks did come in green just before noon, however slipped back in red and closed almost at the day's lows, Nasdaq down 2.3% and Dow and S&P 2.6% down. Asian stocks will open lower and Sensex will open lower in line with its Asian peers. However, anticipated announcements from RBI and the Government will boost the sentiments which may lead to buying.

Monday went in favour of bears for almost the entire day, except the last hour. Sensex never went above the Pivot Point, tested the low close to the last support level given by me and remained below the pivot even at the highest. Nifty did go in green in last hour of trade, however quick profit taking took it back to negative zone again. AD ratio remained negative at 1:4, volumes still below average. No action from the RBI or Oil ministry was the disappointment, though G20 meeting has unanimously agreed to the action plan. G20 summit did not produce any agreements that would alter the near-term picture in any meaningful way. The G20 agreed to continue to use fiscal measures to help stimulated domestic demand, help developing economies gain access to credit, among other initiatives. The G20 also said there will be more international cooperation among regulators and banks will meet stricter standards. For the next 12 months the G20 countries will not implement any new trade barriers. US, UK, Italy, Germany, Eurozone and now Japan, the second most developed nation reporting negative GDP growth has also contributed to the negative sentiments.

Asian stocks started and ended mixed, without any definite direction. Europe opened flat, however soon followed India, diving deeper later. US stocks opened lower and trading in deep red now, however expected to pull upward later. Citigroup and JPMorgan Chase cut more jobs. Industrial production increased by a larger-than-expected amount in October. Crude is hovering about US$ 56/bbl. Dollar is stronger, 49.05 against Rupee and 96.82 against Yen.

Sensex will open up with a narrow gap and gallop up towards close. ATF price cut announced Sunday will be followed by Fuel Price cut. RBI and SEBI will also start acting in favour of the bulls. Above all, neither the bear is keen to hammer the stocks any longer. At the most we will test October low which happens to be the 52 week low also. In low volumes, any positive news can trigger buying which will enable the indices to make sharp upmoves. This will happen sooner than later, may be today or Wednesday. Day traders may buy above 9224 and sell below that. If we go below 9000, that will be the excellent opportunity to add to your Portfolios. Recession is abroad, we are still growing leaps and bounds, may be we slow down a bit, that's all. Any investment now will give excellent profits in about an year. A close above 9404 is all that is required to nullify the negative trend. A close above 9754 today will initiate an uptrend that may take us above 11K. For the week and short term, NTPC looks very attractive and getting ready for a jump. Buy as much as you can at about 150-151.

Supports: 9124, 9024, 8891, 8757 Resistances: 9491, 9691, 9925, 10158