The benchmark indices ended the week on a strong note as huge buying was witnessed in auto, metals and reality stocks. The Sensex closed at 15,379 up 148 points or 0.97% near  the day’s high and the Nifty rose 0.99% or 45 points to settle at 4568 after hitting an intraday high of 4,578. The BSE smallcap and CNX midcap indices ended up 1.8 % and 1.6 % respectively. The July Nifty future ended with 9 points premium. For the week the Sensex ended with over 4 % gains.

After the market close, Reliance Ind has announced its Q1FY10 numbers. Its standalone net profit declined 11.5% to Rs 3,636 cr. from Rs 4,110 cr. in the same period of last year. The company's standalone net sales slipped 22.9% to Rs 32,055 cr. versus Rs 41,579 cr. YoY. Refining is the main disappointment, the company reported GRM (gross refining margin) at $7.50 a barrel while street expected at $ 8 8.5 a barrel.

The Reliance FY10 results have come in as a disappointment and we believe that Reliance could correct 3?4% which has a 12% weightage on the Nifty could spoil the market sentiments. The trend is optimistic as we have seen that the market leadership has changed to IT, FMCG, Cement and Auto sectors where we have witness huge buying interest happening.

The markets could open weak but if global cues continue to remain strong then we think buying should attract at lower levels. Today we have seen that the smallcap and midcap stocks were also very active which helped in keeping the market breadth strong. The current rally which started from 3918 upto 4578 was very fast and in a very short period of almost 660 points or 17%. Going forward any sharp correction will be very healthy for the markets and should be used as a buying opportunity.

Nifty has strong support at 4380?4350 levels, unless we see a break below this point markets are safe and healthy and every fall is a buying opportunity. Major breakout will be only if nifty sustains above 4600 in the near future, till then we see the markets remaining in the range of 4140?4600. Going forward the focus should be in the midcap space as the large caps will remain sideline.

STOCK IDEA:

1) CORE PROJECT (125) – Buy the stock on dip around 107 levels with a stop?loss of 102 for a target of 138?160.

2) MERCATOR LINE (62) – Buy on dip & hold strong support at 57?53 levels, short term target looks 71.

3) ELECTROSTEEL CAST (37.50) – The stock is giving a V?shape recovery, buy on dip & hold strong support at 32, short?term target looks 41?46.

4) ANANTRAJ (120) – Buy on dip strong support at 106?101 levels, short term target could be around 134?150.

Nifty future daily chart (4575): Nifty has rallied almost 17% from the recent bottom of 3905 and going forward it has to correct and consolidate at lower levels and create a base before heading for a fresh breakout above 4700. At lower levels support exit at 4410?4310 where strong buying could emerge. Unless we see break below 4200?4100 any major fall should be used as a buying opportunity.