FREE WEEKLY MARKET FORCAST REPORT 30-5-11 TO 3-6-11 From : www.marketcalls.net

This week market may continue on upper side

Last week Sensex lost 60 points or -0.33% to 18266 and Nifty lost 10 points or -0.19% to 5476 in the week ended 27-05-2011. After 34 days of negative closing, nifty is closing on positive side since last 2 days. Now nifty should reverse from bottom. On closing basis nifty should not close below 5400 level otherwise we may see new down side. FII are also net buyer side since last two days. Forget Europe
problems. Our corporate showed good reults so far. Our growth story is still intact. On clsoing basis nifty is having good support at 5397 and resistance at 5522.

KEEP STRICT SL IN EVERY TRADE NOW FOR NEW POSITIONS AND KEEP SL IN SYSTEM NOT IN YOUR MIND. BEFORE YOU TRADE ON SYSTEM FIRST DECIDE THE SL AND THEN TRADE.

WEEKLY INDEX SUMMRY

INDEX	LAST WEEK 27-05-2011	PREVIOUS WEEK 20-05-2011	PERCENTAGE % (+/-)	POINTS (+/-)
SENSEX	18266	18326	-0.33%	-60
NIFTY	5476	5486	-0.19%	-10

Some major Q4 results and key macroeconomic data will dictate the near term trend on the bourses. Shares of auto and cement firms will be in focus as companies from these two sectors unveil their monthly sales volumes data for May 2011 starting from Wednesday, 1 June 2011.

The Q4 result season comes to an end next week after top firms -- ONGC, M&M, Reliance Communications, Indian Oil Corporation, BPCL and National Aluminium Company unveil Q4 results on Monday, 30 May 2011. The Q4 March 2011 results have been a mixed bag, the common thread being pressure on margins due to rising input costs, interest rates and staff costs.

Data on the performance of the manufacturing sector for May 2011 is due on Wednesday, 1 June 2011. The manufacturing sector had maintained its strong rate of expansion in April 2011, helped by higher output and employment. The HSBC Markit Purchasing Managers' Index, based on a survey of around 500 Indian companies nudged up to 58 in April 2011 from March's 57.9.

Data on the performance of the services sector for May 2011 is likely to be unveiled in early June 2011. The services sector had gained momentum in April 2011, with strong growth in new business orders despite stubbornly high inflation and expectations of further interest rate increases. The seasonally adjusted HSBC Markit Business Activity Index, based on a survey of over 400 Indian firms, edged up to 59.2 in April 2011 from 58.8 in March 2011, marking its two-year anniversary above the 50 level that divides growth from contraction.

Recent data showing gain in food prices in mid-May 2011 will increase pressure on the Reserve Bank of India (RBI) to raise policy rates when it undertakes mid-quarter monetary policy review on 16 June 2011. The government unveils Q4 March 2011 GDP data on Tuesday, 31 May 2011. The data could provide cues on the likely monetary policy stance of the central bank at the mid-June 2011 review.

Investors will closely monitory the progress of the monsoon rains. The India Meteorological Department (IMD) has predicted the southwest monsoon 2011 to be 98% (normal) of the long period average (LPA) with a model error of plus/minus 5%. IMD has indicated that there is very low probability for the season rainfall to be deficient (below 90% of LPA) or excess (above 110% of LPA).

Good rains, if they arrive on time and if they are well spread, would help ease food inflation and boost rural income. Rainfall that comes within 96% to 104% of the long-term average is considered a normal monsoon season, but this alone doesn't guarantee a good crop. The timing and spread of the rains are equally important. The quantity and geographical spread of rainfall during the monsoon season is crucial for India's agriculture sector, which lacks irrigation facilities on more than half its farm land. Monsoon rains usually enter India's mainland through the southern state of Kerala in the first week of June, gradually progressing to cover most of central and northern India by July, before retreating in September.   (Data Source: Capitalmarket)

NIFTY WEEKLY CHART


WEEKLY NIFTY SUPPORT 5397 AND RESISTANCE 5522

NIFTY FUT. (5472)
Buy above 5490 Target ????
Sell below 5390 Target ???? 

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Rupesh Yatesh  Dalal
Head Research Team

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