Derivatives Strategist 30 AUGUST 2011

Market Outlook

 

After a gap up opening, Nifty future witnessed sustained buying interest across the board throughout the day and finally closed above 4900 levels. On option front, maximum Put OI is at 4700 strike while maximum Call OI is at 5000 strike and fresh writing seen at 5100 and 5200 strikes. If Nifty future sustains above 4950 levels then it may go up to 5050-5100 levels. On downside if it fails to hold 4850 levels, then selling pressure may get intensified in the market towards 4800-4750 levels.

 

Derivatives Calls : Buy M&M and Coalindia

 

First Morning Technical Call_30082011

Market Outlook:

S&P CNX Nifty witnessed smart recovery on the first day of the week after a heavy sell off in last few days, now if it sustains the Double Top made in the last week around 4965 levels then pullback towards 5050 levels may be seen. Whereas if it fails to hold 4950 levels then again selling pressure may get intensified towards 4900-4860 levels. The rally was accompanied with lower volumes indicating lack of participation ahead of short week. Nifty started to fall from 5740 levels on 8^th July to 4720 levels and if we take the 24% retracement levels that comes to around 4970 levels hence it may act as immediate resistance for the market and sustaining above it may see further rally on upside. For strength to come in the market it has to close above 5100 levels for three to four trading sessions. Traders are advised to have cautious approach while trading and keep strict stop levels because in general downtrend of the market scenario pullbacks occurs at faster rate.

§ Sensex- Index closed near 16400 levels now next immediate resistance levels are around 16540 and sustaining above these levels may target 16800. Whereas on downside if it fails too hold 16400 levels then again selling pressure may get intensified towards 16000 levels. Sensex has not filled the gap made in last week around 16435 on closing basis.

§ Due to holdays coming in and lower participation, if market fails to hold 5000 levels then again profit booking may be seen in Banking-Metal space whereas some support base buying may continue in IT-Tech stocks.

Technical Calls:

UNIPHOS-Cmp Rs. 139.70

Stock has made base around 135-136 levels and bounced back from these levels with increasing volumes suggesting rally may continue in near term. Stock is looking attractive on charts and one can initiate long with stop below 136 levels and for the target of 145 levels.

ABGSHIP: CMP Rs.375

Stock has closed above the convergence of short term moving averages indicating strength in it. Counter is making Higher Highs and Higher Lows on daily charts. The Rally was accompanied by volumes; one can initiate long positions with stop below 367 and for the target of 383-385 levels.

Derivatives Strategist 29 AUGUST 2011

Market Outlook

 

Nifty future witnessed sustained selling pressure across the board throughout the day and moved down towards 4700 levels. On option front, maximum Put OI is at 4800 strike and Nifty is below 4800 levels. If Nifty remains below 4800 levels, then fresh selling may get intensified in the market towards 4600 levels. Maximum Call OI is intact at 5000 strike, which would be the major hurdle for the market. If Nifty future sustains above 4800 levels then it may go up to 4850-4900 levels. On downside if it fails to hold 4700 levels, then selling pressure may get intensified in the market towards 4600 levels. If Nifty future fails to cross 4700 levels then hedge the position by buying 4600 strike put.

Derivatives Calls : Buy Dabur and M&M

 

 

First Morning Technical Call_29082011

Market Out Look:

S&P CNX Nifty being the first day of the week may see some pullback rally as the week is short due to festival season pullback would be followed by low participation hence for good recovery 4830 levels on closing basis is required for further pullback towards 4950-4980 levels. Whereas on downside if it fails to hold 4730 levels then selling pressure could break 4700 and 4640 can also be possible. Nifty has given the lowest close in last 23 months with selling pressure continued for the fifth consecutive week. Nifty has also closed below 200 Weekly Moving Averages @4830 levels in the last week of August month. Now Nifty above 4980 on sustainable basis is positive for the week while below 4710 on downside could bring more selling pressure towards 4550-4480 levels. SBI has reached our target of 1865 levels now for the time being fresh short should be avoided. Markets are still under bear grip and investors but not traders should start buying value scripts systematically for long term gains.

§ Sensex- Sensex closed below 16K psychological levels with breaking the low made in May/2010 of 15960 and opens the door for 15500-15200 levels in coming days. For the day if it sustains above 16K then only some relief rally may be seen towards 16400 levels.

§ Stock - Cement Secotr stocks are seeing good strength even in the negative market scenario. In any pullback rally this sector may outperform the index with ACC-GRASIM-ULTRATECH-AMBUJA looking strong on charts.

Technical View: BHARAT FORGE 263.30 Stock has made Inverse Pole and Flag formation on weekly charts and closed below the weekly support of 265 levels which is very negative for the counter. Stock can correct by 8-10% from the current levels to 240 levels which is the next major support area being the multiple monthly support levels. Stock has come under strong bear grip trading below all major averages.

Fundamental Weekly Wrap

OUTLOOK

 

The much awaited annual forum in US concludes without any clear signal on what options as the US central bank will use and when. This looks neither negative nor positive, basically its wait and watch policy for everyone.

 

On domestic front the markets closed on Friday below 18 months low and most of the shares are trading at their 52 week low. The political instability still continues. One should select value stocks from them for longer term perspective.

 

Coming to this week it is going to be a short week with only 3 sessions available for trading. We have the important Q1 GDP data coming this week expectations of 7.6% by consensus. Other statistics like the monthly auto sales numbers and cement dispatches numbers will also come this week.

 

The volatility in the market is to continue and we maintain cautious view on markets.

Market Snippets

OUTLOOK

Yesterday markets closed down consecutively for straight second session as fears of slowdown in global growth punctured investor confidence with continuing political instability on domestic front and other macro concerns which seem to have no respite for the downtrend of the markets and investor sentiments.

Global sell-off post European and US debt crisis weighed on the market. Foreign funds have sold $1.85bn in local shares so far in August after purchasing $ 1.7bn of equities in July.

Also the data shows released by RBI yesterday that India's household savings which have been the growth trigger for last few years have dropped below 10% of the GDP for the first time in 13 years as soaring inflation has eaten up the disposable incomes. The rate dipped to 9.7% of GDP in FY11 as compared with 12.1% a year ago. This hints at slowing down of investment cycle which is bad for any economy.

On global front today in the evening we also await the statements from the Fed chairman Ben Bernake on any positive signs regarding any fresh steps to be taken to bolster the economy. These events may keep the volatility in the markets.

Market Outlook

Market Outlook

 

After a gap up opening, Nifty future failed to hold 4900 levels and tumbled down sharply towards 4830 levels. On option front, maximum Put OI is now shifted to 4800 strike, which is likely to act as an immediate support for the market. Maximum Call OI is intact at 5000 strike, which would be the major hurdle for the market. If Nifty future sustains above 4900 levels then it may go up to 4950-4970 levels. On downside if it fails to hold 4800 levels, then selling pressure may get intensified in the market towards 4700 levels. If Nifty future fails to hold 4800 levels then hedge the position by buying 4700 strike put.

Derivatives Calls : Buy Bhartiartl and Hindunilvr

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