Derivatives Strategist 18 November 2011

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Data Feeler: Nifty future witnessed heavy selling pressure after breaching 5000 psychological levels and unwinding of 1.3 million shares of 5000 PUTs created more panic in the market to close near 4930 levels. Nifty witnessed heavy built of Short positions indicating Bears getting aggressive over Bulls. Nifty for the day sustaining above 4930 levels only may give throwback towards 4980-5020 levels whereas on downside sustaining below 4880 levels would led to unwinding in 4900 PUTs and selling pressure may get intensified towards 4850-4820 levels. PCR OI sustaining near psychological one level, breaching this level may put more pressure in the market, whereas if it holds then a good bounce back could not be ruled out from lower levels.

The PCR OI of Nifty moved down from 1.13 to 1.02 levels. HV of Nifty moved up from 25.37 to 26.74 levels and IV moved up from 24.70 to 26.03 levels.

Nifty future saw increase in open interest with fall in prices by 2.22%. Market witnessed selling pressure across the board especially in Oil & Gas, Power, Metal, Realty, Capital Goods, PSU, Auto, Consumer Durables and FMCG sector stocks. Nifty November future closed at discount of 2 points as compared to previous trading day's premium of 14 points.

The F&O segment of the market saw decrease in turnover as compared to previous trading day. The market turnover decreased by 1.56% in terms of number of contracts traded vis-à-vis previous trading day and in terms of rupees decreased by 2.18%.

Derivative Calls:

TATACHEM: Counter has taken strong support around 320 area and looks good for upside rally from current levels. Stock had also seen short covering rally yesterday with -10.43% OI. One can initiate buy in the given range with stop loss below 319 levels and for the target of 340 levels in coming days.

RANBAXY:

Counter has broken major support line and selling is seen at every rise. Stock has also seen built up of Short Position with 7% OI. One can initiate sell in the given range with stop loss above 462 levels and for the target of 432 levels in coming days.

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First Morning Technical Call_18/11/2011

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Market Outlook:

Nifty View- S&P CNX Nifty will have very strong resistance around 5010 today as Nifty continues to make lower high and lower lows. Nifty after breaching 4980 was very fast to correct and made a low of 4919 now Nifty has a strong support around 4860 & 4820 if these levels hold some relief rally is possible otherwise correction would be strong as we head towards weekend. Week has seen 4.5% downside and with Global market negative and Greece, Italy and now Spain the list of Euro zone trouble has started to have contagion impact. Retail stock saw rally on hopes of hike in FDI limits and opening up of the sector. India needs very strong reforms which has been lacking in last 5years otherwise Indian earnings downgrade could be very high. Quality Mid-cap can be slowly accumulated by long term investor with 2-3years as investment horizon SINTEX, PTC, CROMPTON, BEML, ENGINEERSINDIA, DREGDING CORP.

 

Sensex- Sensex is making lower high and lower low, and in has corrected from high of 17908 to 16408 in 12trading session and still no signs of bottom seen in the charts. Sensex has strong resistance around 16630-16750 levels and failing to cross that 16255 and Gap-up levels 16044-16148 would be levels to watched if in case 16040 is breached then correction could take Sensex below 15k very fast.

 

 

Technical Calls:

GMDC-Rs.179, Stock is relative outperformer and till Rs.168 is held on lower side stock has all possibility a rally till Rs.190-195. Stock is holding above 100DMA Rs.169 and 200DMA Rs.151, Nifty is down 7% in this month while stock is up 1%.

 

APIL-Rs.451, Stock has broken multiple support of Rs.490 which caused a Break-out after which stock is down -8.79% and stock looks very weak to Target Rs.358 on downside if weakness continues. Stock trades below all major averages with 20DMA Rs.519, 100DMA Rs.535 and 200DMA Rs.551.

 

 Technical View: NTPC-Rs.165, Stock has been moving down on falling channel and below Rs.162 on closing basis stock can target levels below Rs.140. Stock held above all major averages for few days after recovering from low levels of Rs.160 and failed to hold higher levels. Now 20DMA Rs.173, 100DMA Rs.174 and 200DMA Rs.176 all levels are breached and stock is firm bear grip and can correct faster as Bulls are trapped @ higher levels.

 

 

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