Derivatives Strategist 26 September 2011

Market Outlook

 

After a gap down opening, Nifty future took support around 4820 levels and seen a pullback rally towards 4935 levels. Market was unable to hold higher levels and again fell down to 4870-4865 levels. On option front, maximum Call OI is at 5200 followed by 5100 and 5000 strike while maximum Put OI is at 4800 strike. If Nifty future remains below 4900 levels then selling pressure may continue towards 4800 levels. If it sustains above 4900 then only a pullback may be seen towards 4950-5000 levels.

 

Derivatives Calls : Buy Bhartiartl and Biocon

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Thanks & Regards
Narendra Yadav

First Morning Technical Call_26092011

Market Outlook:

S&P CNX S&P CNX Nifty has closed below 4900 after gap of 18trading days, for the day 4920 & 4970 is important resistance on higher side. Nifty failing to cross 4920 then selling pressure towards 4840 & 4780 become possible. On weekly charts after Nifty breaking down from Descending Triangle failed to cross 5177 which was previous support now has become strong resistance. Weekly basis Nifty has made double top around 5169 and corrected 4.26% this week. Nifty 200Week SMA 4816, before which market has taken support, 4720 is 19months low breaching these levels then 4500-4350 becomes support on downside. Nifty after 5weeks of correction saw 3weeks of rally to correct again as Strong Dollar, Weak global market, 2G scam taking new twist is making political condition more fluid and now big sell-off in commodity market would bring selling pressure in equity market to meet margin calls.

 

 

 

§  Sensex- Has taken exact support of 16052 which is 200Weekly Moving average and any close below this level could trigger fresh selling as Sensex has closed 4weeks low after 3 weeks of positive close negating the short term rally and Inv.Head & shoulder formation. 15765 has been lowest in 22months can be tested if we move below 16k and if recovery in this week fails above 16620 then we could have one more worst week as we head towards derivative settlement.

 

Technical Calls:

 EICHERMOTOR-1602, Stock has closed @ highest ever on weekly basis and has been making regular all time high, trading above all major moving averages. Stock has given good weekly break-out above Rs.1450 and now stock looks good to give 8-10% returns from current levels. Keeping in mind current market scenario use dips to buy and hold with adequate stop loss.

 

ACC-Rs.1069 -Stock has closed @ 20weeks highest level after making a rounding bottom on weekly and daily chart and any fresh move can take the stock to Rs.1144 which is 15months high. Stock trades above all major averages 20DMA Rs.1038, 100DMA Rs.999 & 200DMA Rs.1019.

 

 Technical View: Break-down below 2000

HEROMOTORCORP-Rs.2037 Stock has formed Tower Top formation on daily charts and closed below 20DMA Rs.2127 now support would be 100DMA Rs.1886 & 200DMA Rs.1778. Weekly charts also show trend reversal and with follow-on selling pressure where support comes around Rs.1850 on lower side.

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Fundamental Weekly Wrap

Outlook

 

Our markets are reacting to the global situation in US and Europe.

 

In addition to this our markets have also started discounting the fears of weak Q2 September 2011 results on not very encouraging advance tax data and also data showing heavy selling by foreign funds have started hitting the sentiments adversely.

 

The department of telecommunications (DoT) is all set to levy heavy penalties totaling Rs 200 crore on telecom companies Bharti Airtel, Reliance Communications and Idea Cellular, though for different reasons. The paperwork has been completed and is awaiting the return of the telecom secretary and the telecom minister, both of whom are currently overseas.

 

Banks, NBFCs are allowed to sponsor infra debt funds which will accelerate and enhance the flow of long term debt in infrastructure funds.

 

Billionaire Mukesh Ambani's Reliance Industries Ltd (RIL) and BP Plc may need three-four years to raise output from India's biggest gas field because the reservoir is harder to tap than previously estimated, may impact the stock price performance.

 

The Supreme Court's ban on mining and transporting iron ore from Bellary district in Karnataka since end-July as well Chitradurga and Tumkur districts,  has been impacting the steel stocks like JSW steel, Jindal Steel and also Sesa Goa which may show not so encouraging Q2 results as volume may get impacted. 

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Weekly Derivatives Strategiest Note

Weekly Market Outlook

 

 

In the previous week Nifty future failed to cross 5170 levels then witnessed sharp sell off towards 4800 levels. Market sentiment is in pressure and any negative cues from Global indices may attract fresh short at these levels, Now if it fails to hold 4900 levels then pullback may end and market may further go down. If Nifty future sustains above 4900 mark then only a pullback rally may be seen towards 5050-5100 levels led by short covering activity, but if it fails to hold 4900 mark then momentum may fizzle out and market may again go down towards 4700 - 4600 levels to retest recent bottom. Those who are holding the long position can go for Bear put spread if Nifty remains below 4900 levels, by buying 4900 strike put and selling 4700 strike put or one can simply go long on 4800 put to hedge the long position or portfolio.

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