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Global Market Watch


• Western equity market
– 167-point rally in the Dow Jones Industrial Average during the final hour formed a
hammer in the index, pointing towards short term bottom being formed
– European Indices remain weak and continues to struggle below important 100DMA

• Asian equity markets


– Asian indices were weak for the most part of last one month
– Oversold conditions in indices draws attention to a short term uptrend in indices

• Currency market
– USD index continues is march towards the level of 84, index in overbought zone

• Commodity market
– Crude oil is trading at crucial support and if inflation expectations are as strong as
they seems, it is expected to rally from current levels
– Gold prices are expected to move up from current levels of $1050-$1060

• Conclusion
– International cues remain mixed and caution is warranted for the short term
Private and Confidential
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Dow Jones Industrial Average
DOW JONES INDL AVG (DJIA) (10,003.70, 10,032.00, 9,835.09, 10,012.20, +10.00)
11000 11000

10500 10500

10000 10000

9500 9500
Hammer @ 10,012
9000 9000

8500 8500

8000 8000

7500 7500

7000 7000

6500 6500

1.5
80
1.0 70
0.5 60
50
0.0 40
-0.5 30
20
-1.0
Rebounds from oversold reading 10

February March April May June July August September October November December 2010 February
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DAX – European Indices remain weak
DAX (5,515.69, 5,527.00, 5,433.02, 5,434.34, -98.90)

6000 6000

5500 5500

5000 5000

4500 4500

Support turns resistance

4000 4000

3500 3500

1.5 70
1.0
60
0.5
50
0.0
-0.5 40

-1.0 30

October November December 2009 February March April May June July August September October November December 2010 February
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24000
Hang Seng Index 24000
HANG SENG INDEX (19,706.20, 19,822.90, 19,655.90, 19,665.10, -676.50)
23500 23500
23000 200DMA break shifts focus to bear trend 23000
22500 22500
22000 If the index continues to trade below 200DMA it 22000
21500 would have serious bearish implications 21500
21000 21000
20500 20500
20000 20000
19500 19500
19000 19000
18500 18500
18000 200 DMA broken 18000
17500 17500
17000 17000
16500 16500
16000 16000
15500 15500
15000 15000
14500 14500
14000 14000
13500 13500
13000 13000
12500 12500
12000 12000
11500 11500
11000 11000
10500 10500
10000 10000

1.5 75
70
1.0 65
60
0.5 55
50
0.0 45
40
-0.5
Breaks bull market RSI, 35
30
-1.0
approaching oversold divergence 25

tember October November December 2009 February March April May June July August September October November December 2010 February
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USD against Majors & INR
AUD GBP

USDAUD - AUSTRAL IAN DOL LAR (0.86 , 0.87 , 0.86 , 0.87, +0.00 ) USDGBP - UK POUND ST ERLING (1.58 , 1.58 , 1.56 , 1.56, -0 .0 1)

1.70 1.70

0.90 0.90
1.65 1.65

0.85 0.85 1.60 1.60

1.55 1.55
0.80 0.80

1.50 1.50

0.75 0.75
1.45 1.45

0.70 0.70 1.40 1.40

1.35 1.35

1.5 Volu me (0 ), Smoo th ed Re la ti ve Stren gth Ind ex (w. Wi l der's Smo othi ng) (20 .7 423 ) 90 Volu me (0 ), Smoo th ed Re la ti ve Stren gth Ind ex (w. Wi l der's Smo othi ng) (23 .5 431 )
1.5
90
1.0 80
1.0 80
0.5 70
0.5 70
60
0.0 60
50 0.0 50
-0.5 40
-0.5 40
-1.0 30
30
20 -1.0
20
13 20 27 4 11 18 25 1 8 15 22 29 6 13 20 27 3 10 17 24 31 7 14 21 28 5 12 19 26 2 9 16 23 30 7 14 21 28 4 11 18 25 1 8 15 22
May Jun e Jul y August Septembe r Octo ber Novembe r Decembe r 20 10 Fe bruary Fe bruary March Apri l May Jun e Jul y August Septembe r Octo ber Novembe r Decembe r 20 10 Fe bruary

EUR INR
USDEUR - EURODOLLAR (1.37, 1.37, 1 .3 6, 1 .3 7, -0.01) USDINR - INDIAN RUPEE (4 6.25, 4 6.75, 46.05 , 46.62 , +0 .4 1)
52 .5 52 .5
52 .0 52 .0
51 .5 51 .5
51 .0 51 .0
50 .5 50 .5
1.45 1.45
50 .0 50 .0
49 .5 49 .5
49 .0 49 .0
1.40 1.40
48 .5 48 .5
48 .0 48 .0
47 .5 47 .5
1.35 1.35
47 .0 47 .0
46 .5 46 .5

46 .0 46 .0
1.30 1.30
45 .5 45 .5

45 .0 45 .0
44 .5 44 .5
1.25 1.25
44 .0 44 .0

43 .5 43 .5
1.5 Volu me (0 ), Smoo th ed Re la ti ve Stren gth Ind ex (w. Wi l der's Smo othi ng) (13 .1 662 ) 1.5 Volu me (0 ), Smoo th ed Re la ti ve Stren gth Ind ex (w. Wi l der's Smo othi ng) (54 .8 419 ) 90
80 80
1.0 70 1.0
70
0.5 60 0.5 60
50 50
0.0 0.0
40 40
-0.5 -0.5 30
30
20
-1.0 20 -1.0 10
10
Novembe r Decembe r 20 09 Fe bruary March Apri l May Jun e Jul y August Septembe r Octo ber Novembe r Decembe r 20 10 Fe bruary Novembe r Decembe r 20 09 Fe bruary March Apri l May Jun e Jul y August Septembe r Octo ber Novembe r Decembe r 20 10 Fe bruary

• Major USD appreciation against Euro, with lesser changes to other currencies
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Shanghai Composite
3600 SHANGHAI COMP (2,936.20, 2,959.23, 2,918.91, 2,939.40, -55.91) 3600
3500 3500
3400 3400
3300 3300
3200 3200
3100 3100
3000 3000
2900 2900
2800 2800
2700 2700
2600 2600
2500 2500
2400 2400
2300 2300
2200 2200
2100 he index has broken below important trendline support and 2100
2000 has given breakdown below 3000 2000
1900 1900
1800
Breakdown could imply further downtrend and keeps outlook bearish 1800
1700
Short term oversold conditions call for a relief rally 1700
1600 1600

1.5
80
1.0 70
0.5 60
0.0 50
-0.5 40
-1.0 30

eptember November December 2009 February March April May June July August September October November December 2010 February
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Crude Oil
90 LIGHT CRUDE CONT INUOUS 1000 BARRELS [NYMEX] (73.04, 73.94, 69.50, 71.19, -1.95) 90
85 85
80 80

75 75

70 70

65 65

60 60

55 55

50
Breakdown could be important if $68 breaks 50

45 45
Short term implications bearish unless it clears $75
40 40

35 35

1.5 Volume (0), Smoothed Relative Strength Index (w. Wilder's Smoothing) (40.8486)
90
1.0 80
70
0.5
60
0.0 50
-0.5 40
30
-1.0
20

February March April May June July August September October November December 2010 February
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Indian Equity Outlook

• S&P CNX Nifty remains below 100DMA and points to continued medium term
weakness

• The is oversold and we expect a bounce towards 4850 in the short term and further
to 4950 given 200DMA @ 4650 holds

• If the index breaks below 200DMA we would see the medium term trend turning
down to bearish

• Three weeks of negative close is a first in this current bull run and would resolve
into some bounce back to the upside, however this throws cautions towards
possibility of further downmoves
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S&P CNX Nifty
* S&P CNX NIFT Y (4,712.75, 4,768.15, 4,712.75, 4,757.25, +38.60)
5500 5500

5000 January 2008 January 2010 5000

4500 4500

4000 4000

3500 3500

3000 3000

2500 2500

70000 70000
60000 60000
50000 50000
40000 40000
30000 30000
20000 20000
10000 10000
x10000 x10000

2008 Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Feb
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S&P CNX Nifty
5450 * S&P CNX NIFT Y (4,712.75, 4,768.15, 4,712.75, 4,757.25, +38.60) 5450
5400 5400
5350 5350
5300 5300
5250 5250
5200 5200
5150 Short term resistance 5150

5100 @ 4850 and 4950 5100


5050 5050

5000 5000

4950 4950

4900 4900

4850 4850

4800 4800

4750 4750

4700 4700

4650 4650

4600
200DMA@ 4600
4650
4550 4550

4500 4500

4450 4450

4400 4400

4350 4350
12 20 26 3 9 16 23 30 7 14 21 29 4 11 18 25 1 8 15 22
November December 2010 February
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Maruti Udyog
1900 MARUTI SUZUKI (1,363.30, 1,389.90, 1,358.10, 1,373.50, +14.60) 1900
1800 1800
1700 1700
1600 1600
1500 1500
1400 1400
1300 1300
1200 1200

1100 1100
At 200DMA
1000 1000

900 900

800 800

700 700

The stock has been a market leader in the bull trend


600 600

Traders can buy this stock at CMP1370 keeping a stop loss


500 Below 1300 on initiation of the trade and targeting 1530 and 1650 500

Smoothed Relative Strength Index (w. Wilder's Smoothing) (21.3399)


Oversold
50 50

30000 Volume (82,937) 30000


20000 20000
10000 10000
x100 x100

2009 February March April May June July August September October November December 2010 February