News Views & Events 28th March 2013

News:

Ø  Homeland Mining and Energy SA Proprietary a wholly-owned subsidiary of Canada-listed Homeland Energy Group, in which GMR Energy has a majority stake has divested its stake in two coal assets for $50 million (about Rs.270 Crs) to multiple buyers.

Ø  Prime Focus has thrown its hat in the ring to buy a bankrupt Hollywood visual effects company best known for bringing to life Ang Lee's Oscar winner Life of Pi. Prime, which has emerged as one of the few key visual effects studios in Hollywood, will jostle with India's Prana Studios and Psyop to buy Rhythm, which filed for bankruptcy recently.

Ø  Clariant Chemicals (India) said its board has approved the proposal to divest the business of textile chemicals, paper specialities and the emulsion products, for a consideration of Rs. 209.15 Crs.

Ø  Promoters of Aditya Birla Nuvo have raised their stake in the diversified company to 53.76% from 51.04% at present after converting warrants into equity. Warrants were converted at a price of . 910.86 apiece valuing the transaction at Rs.608.45 Crs.

Ø  Bharat Oman Refineries, a joint venture between Bharat Petroleum Corporation and Oman Oil, is close to signing up with banks for a Rs2500 Crs loan as it aims to bring down the cost of funds.

Ø  HCL Technologies has bagged a multi-year infrastructure management services contract from US-based automaker Ford Motor Company. "The value of the five-year contract is estimated to be close to $100 million.

Ø  Matthew R Barney, vice-president and head of Infosys Leadership Institute (ILI), has quit, ending his four-year association with the Bangalore-based company.

Ø  Balmer Lawrie board approves bonus issue in the ratio of 3:4 shares.

Ø  Gitanjali Gems has decided to defer issue of FCCBs.

Ø  Nifty Changes: IndusInd Bank and NMDC to replace Wipro and Siemens in Nifty effective April 1 (i.e. Monday).

  Key events for the day:

Ø  Exclusion of GVKPIL & Bhushan Steel from F&O segment from today. (No further contracts available in next series.)

Ø  Release of Nationwide HPI in UK.

Ø  Release of Retail PMI in Euro Zone.

Ø  Release of Final GDP, Chicago PMI & Unemployment Claims in US.

 

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Derivatives Strategist 28th March 2013

Data Feeler: Nifty future after a consecutive seven days of fall witnessed some relief at lower levels and took support around 5600 psychological area. Being expiry day and last trading day of financial year volatility may remain intact in the markets and traders should keep strict stop levels for trading. Nifty future for the day, if sustains above 5650 levels then only bounce back may be seen towards 5700 levels. Whereas sustaining below 5620 levels may put further selling pressure towards 5580-5550 levels. Looking at the option concentration data for March series, maximum put OI is still intact at 5600 strike price suggesting immediate support area for the markets. Whereas for April series maximum put OI is concentrated at 5600 strike price and maximum call OI is at 6000 strike price. Bank Nifty for the day has immediate support around 11000 levels and breaching these levels may put further pressure to it whereas strong hurdle around 11350-11500 levels.

 

Put Call Ratio based on Open Interest of Nifty moved up from 0.78 to 0.81 levels. Historical Volatility of Nifty moved down from 16.67 to 16.17 levels but Implied Volatility moved up from 15.31 to 15.48 levels.

 

Nifty future saw increase in OI by 6.54% with a marginal fall in price. Market witnessed buying interest in CD FMCG, Tech, IT, Auto and Banking space whereas selling pressure was seen especially in Oil & Gas, Reality, CG, Power, Metal and PSU sector stocks. Nifty future closed at discount of one point as compared to premium of 11 points in previous trading session.

 

The market turnover increased by 6.98% in terms of number of contracts traded vis-à-vis previous trading day whereas in terms of rupees increased by 6.12%.

 

Derivative Calls: Buy on TITAN & Sell on TATA MOTOR DVR

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First Morning Technical Call 28th March 2013

MARKET OUTLOOK

Nifty (5642): CNX Nifty closed positive after 7 trading days and in last 12 days only 2 days we have seen positive close with Nifty breaching 200DMA 5624 by making a low of 5612 before closing positive. Today is Derivative settlement, Last day of the Month, Quarterly close and last day of financial year which can keep market most volatile, So Nifty holding 5600 is important crossing 5680 is crucial for a rally till 5720 & 5775 while below 5600 correction may continue till 5548 & 5480. Nifty has made low of 85 trading days, Nifty YTD date is down 4.4% while in Nifty stocks HCLTECH+25%, TCS+23%, INFY+23 %, ONGC+13, SUNPHARMA +11% are Top 5 gainers while Top 5 Losers are RELINFRA-37%, JPASSOCIATE-33%, HINDALCO-32%, TATASTEEL-28%, BANKBARODA-23%. Buying YTD is seen in IT, Pharma, FMCG and Oil Companies Surprise was Oil Companies post Decontrol of Diesel and Partial decontrol in LPG prices while selling in Realty, Infra, Metal, Auto, PSUBANK, PSU Stocks. Quality Mid-Cap stocks are showing signs of recovery BAYERCORP, PFIZER, CUMMINS, GSPL, KARURVYSYABANK, M&MFIN, MINDTREE, NATCOPHARMA and SPECIALITY can be accumulated for long term.  

SENSEX (18705) : Sensex has corrected for straight 8 days and now Gap-up(18590-18612) are broken on a closing basis only then some selling pressure could intensify towards,18300-18190 levels. Sensex is still above its 200 DMA 18546. Any rally above 18850 in the index can trigger a fresh round of short covering as the index seems to have taken a temporary support near 200 DMA levels and is showing first signs of a pullback after a steep correction. Therefore for the day the levels for the Sensex, moving above 18790 could target 18880-18940 on the upside while on the downside, the index could continue its downtrend if the 200 DMa 18546 is broken o n a closing basis. 

 TECHNICAL CALLS 

BUY RANBAXY Rs.444: The stock has rallied 17% in this month so far,  a stunning recovery from lower levels and has now made an unconventional inverted head and shoulder bullish pattern. Ranbaxy has seen a huge built up of long positions as per the derivatives data which indicates that a short covering move of at least 4-5% can be witnessed in the stock. The stock is trading above its 20 DMA Rs.415 & 50DMA Rs.431 levels which forms good support for the stock. The stock looks good for an upside target of 480 in the days to come.

SELL RELIANCE CAPITAL Rs.301 :   The stock is down by a staggering 16.52 %  during the month of March,2013 and Year till date 37%  which suggests huge short built up of positions in the stock according to the derivatives data.. The stock has had huge volumes during the entire sell off from 380 odd levels, which is a big negative for the stock. The stock could see more selling pressure during expiry as traders trapped on the long side would eventually have to cut their positions. The stock looks weak enough to target at least 270 -275 on the downside as it is trading below all major moving averages.

 

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Fwd: Weekly Derivatives Strategist 25th March 2013

Weekly Data Feeler

 

Ø  Open Interest of Nifty future increased by 3.96% with a fall in price by 3.88% from the previous week, indicating built up of short positions as several times market failed to cross 5970-5990 levels and fell down sharply below 5900 levels.

Ø  Bank Nifty future has seen built up of short positive as OI increased by 12.62% with a significant fall in price by 5.41% from the previous week.

Ø  Put Call Ratio based on Open Interest of Nifty declined sharply in last couple of days from its six months high zone of 1.29 to 0.82 levels. Falling Put Call Ratio indicating that Call writers are quite aggressive in the market. If this ratio moves above psychological 1 level then only a bounce back move may be seen in the market.

Ø  HV (Historical Volatility) of Nifty moved up from 16.65 to 17.08 levels.

Ø  Implied Volatility of Nifty also moved up from 14.89 to 15.65 levels.

 

On the Option front, maximum Put OI is at 5600 and 5700 strike, whereas maximum Call OI is at 6000 followed 5900 strike. Even after the market fall maximum Put OI is intact at 5600 and 5700 strike which indicates that this zone is likely to act as a medium term support for the market.

 

Nifty has fallen down sharply from 5945 to 5632 levels in last six trading sessions. Nifty was not holding any bounce back move and more panic was seen at every meaningful bounce in the market especially in last two trading sessions. It has fallen down sharply by more than 300 odd points in just six trading sessions. After such fall a bounce back action may be seen but overall sentiment would remain negative till Nifty future sustains below 5850 levels. If it fails to hold 5650 levels then further selling pressure may get intensified towards 5550 levels. If it managed to hold 5750 levels then it may head towards 5800-5820 levels.

 

Bank Nifty future also fallen down sharply and trading near important previous support of 11200 levels. If it moves above 11500 then only a short covering move may be seen towards 11800-12000. If it sustains below 11200 levels then it may correct till 11000-10800 levels. 

 

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Fwd: News Views & Events 25th March 2013

News:

Ø  The construction work for the much awaited Industrial Park of Tata Steel near Gopalpur in south Odisha is expected to start from the next month as the Union Ministry of Environment and Forests (MoEF) has accorded Costal Regulation Zone (CRZ) clearance to its anchor projects.

Ø  Cairn India has began natural gas sales from its prolific Rajasthan block on borders with Pakistan even as it put another oilfield in the area on production.

Ø  Reid & Taylor is up for sale in India, along with its premium portfolio of fabric and apparels.
S Kumars Nationwide (SKNL) is planning to sell a controlling stake in the company and deleverage the balance sheet. This move comes after several unsuccessful attempts to list the Reid & Taylor India business through a Rs.1000 Crs IPO.

Ø  Suzlon Energy is hitting the overseas bond markets to raise $650 million to prepay its forex debts, making it the first domestic company under CDR to do so.

Ø  The Comptroller and Auditor General (CAG) is likely to restart audit of Reliance Industries' spending on the KG-D6 gas block early next month after issues over scope of the scrutiny are resolved to everyone's satisfaction.

Ø  SKS Microfinance may raise Rs.3000 Crs during the next fiscal to meet its lending requirements.

Ø  Coromandel International Limited (CIL) has commissioned its third complex fertiliser plant at Kakinada in Andhra Pradesh.

Ø  The Videocon group has planned to retire a substantial portion of its Rs 29,000 Crs debt from the proceeds of the sale of its 10 per cent stake in a Mozambique gasfield, which could raise up to $3 billion (Rs 16,300 Crs) by this month-end.

Ø  Dr Reddy's Laboratories has settled a case against Canadian health science company Nordion in New Jersey District Court for a cash payment of $22.5 million (Rs.122.3 Crs).

Ø  Nestle India has approved an increase in royalty payment by 0.20% a year for the next five years to its parent firm, thereby enhancing it to 4.5% of the sales. The board of directors of Nestle India negotiated and Nestle SA accepted the increase in royalty from 3.5% to 4.5% of sales in a staggered manner by making an increase of 0.20% per annum over the next five years effective January 1, 2014.

Ø  India plans to set up a special fund to provide insurance to refineries after European re-insurers refused to cover units that process oil imported from Iran.

Ø  Ranbaxy Laboratories set to get FDA nod on alternative for Novartis' Diovan, another likely for Roche's Valcyte.

 

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Fwd: Derivatives Strategist 25th March 2013

Daily Data Feeler

 

Ø  Nifty future saw decrease in OI with a marginal rise in price.

Ø  Market witnessed marginal buying interest in Power, Metal and CG space whereas selling pressure was seen especially in CD, Realty, IT, Tech, HC, Oil & Gas, PSU, FMCG and Banking sector stocks.

Ø  Nifty future closed at premium of 17 points as compared to premium of 6 points in previous trading session.

Ø  Put Call Ratio based on Open Interest of Nifty moved down from 0.83 to 0.82 levels.

Ø  Historical Volatility of Nifty moved down from 17.61 to 17.08 levels.

Ø  Implied Volatility also moved down from 16.78 to 15.65 levels.

 

Nifty future on Friday closed on a flattish note with no major movement was seen in the index however stock specific action was continued in the market. Nifty future ended the week on a negative note with increase in OI suggesting built up of short positions in the market and till the time it is sustaining below 5800 area Bears may remain active in the market. Nifty future for the day, if sustains above 5700 levels then only bounce back may be seen towards 5750 levels. Whereas sustaining below 5650 levels may put further selling pressure towards 5600 levels. Looking at the option concentration data for March series, maximum put OI is still intact at 5700 followed by 5600 strikes whereas maximum Call OI is at 6000 followed by 5900/5800 strike prices. Fresh call writing is seen at 5800 & 5700 strike prices suggesting immediate hurdle area for the markets in very short term. Bank Nifty for the day has immediate support around 11200- 11000 levels whereas strong hurdle around 11500 levels.

 

Derivatives Calls : Buy PFC and LUPIN

 

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Fwd: First Morning Technical Call 25th March 2013

MARKET OUTLOOK

NIFTY (5651): Nifty closed lowest in 17 weeks correcting almost 3.77% for the week But 5629 high of February2012 and 200DMA 5618 hold good support. This week is short week with just 3days of trading as 27^th Wednesday is Holi and 29^th is Good Friday and on 28^th we have Derivative settlement, Month and Financial year end which could keep market edgy as PCR 0.82 is considered very negative for long position.  Today Nifty has to hold 5629 and cross 5690 to Target 5750 & 5775 while any move below 5629 then 5580 & 5548 would be very important. BANKNIFTY PCR is 0.62 and has closed below 200DMA 11370 for 3 consecutive trading days, with SBIN below Rs.2050 looks weak for target of Rs.1920. Stock where CAUTION is advised this settlement NHPC(-27%), IVRCL(-26%), HDIL(-23%) SINTEX (-20%), RELINFRA (-18%), PANTALOONR (-18%), JSWSTEEL (-17%), DLF(-17%), PTC(-16%) would find it hard to recover, while ASIANPAINTS(+16) and RANBAXY(+14) short covering possible.

 SENSEX (18735):  Sensex closed lowest in 17 weeks with Gap-up(18590-18616) Made on 27^th November 2012 is pending. Sensex for the day has hold 18670 and cross 18840 to target 19025 & 19140, Now Sensex close above 19140 is required for any fresh rally.  Sensex failing to hold 18590 or slipping below said level can see sustained selling pressure till 18260-18060 on the downside. Sensex is trading below its 100DMA 19332, 50DMA 19533 and 20 DMA 19196 while 200DMA 18526 is very important in any correction.

TECHNICAL CALLS

BUY TATA CHEMICALS Rs.318: After touching its lowest level in 126 trading sessions the stock made a stellar recovery on Friday thereby closing higher by 2.29% suggesting that support based buying at lower levels is taking place in the stock. The stock's recent rally from 309 to 381.50, has been completely retraced therefore emerging of a new trend reversal could be seen if current levels are held on the down side. The stock could see a decent pullback till Rs.344 as there is good support for the stock around 310 levels.

SELL L&T Rs. 1399: L&T has made a bearish Gartley pattern on weekly charts and has begun its first leg of correction from 1700 odd levels and looks weak enough to target at least 1300-1280 in the current leg of the fall .The stock is trading below its 20 DMA Rs.1441, 50 DMA Rs.1489 levels, 200DMA Rs.1503 and 100DMA Rs.1555. The stock has made a DEAD CROSS which suggest as 200DMA has been cut by 50DMA from above.

 

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Fwd: First Morning Technical Call 25th March 2013

MARKET OUTLOOK

NIFTY (5651): Nifty closed lowest in 17 weeks correcting almost 3.77% for the week But 5629 high of February2012 and 200DMA 5618 hold good support. This week is short week with just 3days of trading as 27^th Wednesday is Holi and 29^th is Good Friday and on 28^th we have Derivative settlement, Month and Financial year end which could keep market edgy as PCR 0.82 is considered very negative for long position.  Today Nifty has to hold 5629 and cross 5690 to Target 5750 & 5775 while any move below 5629 then 5580 & 5548 would be very important. BANKNIFTY PCR is 0.62 and has closed below 200DMA 11370 for 3 consecutive trading days, with SBIN below Rs.2050 looks weak for target of Rs.1920. Stock where CAUTION is advised this settlement NHPC(-27%), IVRCL(-26%), HDIL(-23%) SINTEX (-20%), RELINFRA (-18%), PANTALOONR (-18%), JSWSTEEL (-17%), DLF(-17%), PTC(-16%) would find it hard to recover, while ASIANPAINTS(+16) and RANBAXY(+14) short covering possible.

 SENSEX (18735):  Sensex closed lowest in 17 weeks with Gap-up(18590-18616) Made on 27^th November 2012 is pending. Sensex for the day has hold 18670 and cross 18840 to target 19025 & 19140, Now Sensex close above 19140 is required for any fresh rally.  Sensex failing to hold 18590 or slipping below said level can see sustained selling pressure till 18260-18060 on the downside. Sensex is trading below its 100DMA 19332, 50DMA 19533 and 20 DMA 19196 while 200DMA 18526 is very important in any correction.

TECHNICAL CALLS

BUY TATA CHEMICALS Rs.318: After touching its lowest level in 126 trading sessions the stock made a stellar recovery on Friday thereby closing higher by 2.29% suggesting that support based buying at lower levels is taking place in the stock. The stock's recent rally from 309 to 381.50, has been completely retraced therefore emerging of a new trend reversal could be seen if current levels are held on the down side. The stock could see a decent pullback till Rs.344 as there is good support for the stock around 310 levels.

SELL L&T Rs. 1399: L&T has made a bearish Gartley pattern on weekly charts and has begun its first leg of correction from 1700 odd levels and looks weak enough to target at least 1300-1280 in the current leg of the fall .The stock is trading below its 20 DMA Rs.1441, 50 DMA Rs.1489 levels, 200DMA Rs.1503 and 100DMA Rs.1555. The stock has made a DEAD CROSS which suggest as 200DMA has been cut by 50DMA from above.

 

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Fwd: News Views & Events 22nd March 2013

News:

Ø  Oil & Natural Gas Corporation (ONGC) has made three significant discoveries including two in the Krishna Godavari basin and one in Tripura. The company has decided to invest over Rs 4,050 crore to upgrade western offshore facilities through two major projects.

Ø  Fertiliser subsidy payment worth Rs.31,580 crore is likely to remain outstanding to the nutrient manufacturers this fiscal, Parliament was informed on Thursday.

Ø  Sadbhav Engineering has bagged a contract for four-laning of a road project estimated at Rs.1,210 crore. The project is to be executed on design-build-finance- operate-and-transfer pattern under NHDP Phase-III in the state of Haryana.

Ø  Gujarat Sidhee revival plan hits a hurdle. Minority shareholders file plea against BIFR-approved package, saying it favours only the promoter family.

Ø  IT major Wipro said the Karnataka High Court has approved its demerger scheme through which the firm plans to hive off non-IT business. Wipro had announced that it will demerge its non-IT businesses like Consumer Care & Lighting into a new company to focus exclusively on information technology.

Ø  Alstom has bagged a contract worth Rs.573 crore from state-run BHEL for supplying equipment for a thermal power plant at Nabinagar in Bihar.

Ø  Shree Renuka board okays merger of overseas arm (Renuka Commodities DMCC, UAE) with self. Will await for shareholders nod before mergers finalized.

Ø  Kerala govt restrains OMCs from hiking price for diesel supplied to KSRTC (Kerala State Road Transport Corporation).

Ø  Two-wheeler maker Hero MotoCorp has set a capital expenditure target of Rs.1,100 crore for 2013-14 and has put in place a strategy to build upon its leadership position in the domestic market.

Ø  Power Min to LS: Have received 19 Corruption Cases against NHPC From 2010-12.

Ø  Shasun Pharma approves conversion of 15 lakh warrants into equity shares.

Ø  Finance Minister may review Excise Duty hike on SUVs and may examine exempting  certain vehicles from definition.

Ø  Sri Lanka Declares partial seizure of Indian Oil facility. India Voted for the US Resolution on Sri Lanka.

Key events for the day:

Ø  SAIL OFS today. Government fixes floor price at Rs.63/Share. OFS for over 24 Cr shares or 5.82% stake. Govt Owns 85.82% Stake in SAIL.

 

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Fwd: Derivatives Strategist 22nd March 2013

Data Feeler: Nifty future turn out to be an extremely volatile trading day with recovery seen in first hour of trades but in the later half of trading session pullback rally fizzled out from higher levels around 5770 till 5655 levels. Nifty future for the day, if sustains above 5700 levels then only bounce back may be seen towards 5750 levels. Whereas sustaining below 5670 levels may put further selling pressure towards 5640-5600 levels. Looking at the option concentration data for March series, maximum put OI is still intact at 5700 followed by 5600 strikes whereas maximum Call OI is at 6000 followed by 5900 strike price. Fresh call writing is seen at 5800 & 5700 strike prices suggesting immediate hurdle area for the markets in very short term. Bank Nifty for the day has immediate support around 11200- 11000 levels whereas strong hurdle around 11500 levels.

 

Put Call Ratio based on Open Interest of Nifty moved down from 0.89 to 0.83 levels. Historical Volatility of Nifty moved down from 17.64 to 17.61 levels and Implied Volatility also moved down from 17.17 to 16.78 levels.

 

Nifty future saw decrease in OI by 0.45% with a fall in price by 0.89%. Market witnessed marginal buying interest in CD, IT and Tech space whereas selling pressure was seen especially in Realty, Power, CG, Auto, PSU, Oil & Gas, Metal, HC, FMCG and Banking sector stocks. Nifty future closed at premium of 6 points as compared to premium of 21 points in previous trading session.

 

The market turnover increased by 27.17% in terms of number of contracts traded vis-à-vis previous trading day whereas in terms of rupees increased by 26.96%.

 

Derivative Calls: Buy on WIPRO & IGL.

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Fwd: First Morning Technical Call 22nd March 2013

MARKET OUTLOOK

 

NIFTY (5659): Nifty closed lowest in 81 trading day's by  closing the Gap-up created on 27^th November 2012 and now below 5645,the Nifty could drift to 5548 & 5490 which could be next possible levels. Nifty after making higher high failed to hold higher levels saw sell-off in Cements, Power sector stocks, PSUBANKS, Capital Goods and Auto stocks. Nifty is already down -3.6% in this week while 9 Stocks down more than 9% down ACC, AMBUJACEM, BANKBARODA, BHEL, DLF, IDFC, JPASSOCIATE, RELINFRA and PNB while heavy weights like MARUTI, L&T, BPCL, HINDALCO, SESAGOA, TATAPOWER, TATASTEEL, COALINDIA, ONGC are down 6-8% with one more day for the week to go. Today Nifty has to hold 5645 and cross 5700 to Target 5750 & 5775 while any move below 5645 then 5590 & 5548 would be very important. Nifty is in very crucial support 5629 which is High of February 2012, 5647 is low of 2013 and low of 4months, and 5599 is 38.2% retracement for Nifty's entire move from 4770 to 6111.80. So for the Nifty 5590-5663 is very crucial in days and week to come. Oil Companies like ONGC, OIL, IOC, BPCL, HPCL are seeing pressure the reason being the hiking Diesel prices post fluid political condition would become dif ficult. 

 SENSEX (18793):  Sensex closed lowest in 81 trading days as the Gap-up Made on 27^th November 2012 still remains pending to be filled . Sensex for the day has hold 18750 and cross 18900 to target 19025 & 19140, Now for the Sensex, a close above 19140 is required for any fresh rally to begin from here on.  Sensex failing to hold 18740 or slipping below the said level can see sustained selling pressure till 18620-18535 on the downside. Sensex is trading below its 100DMA 19329, 50DMA 19552 and 20 DMA 19225 while 200DMA 18515 is very important level to be watched out for in any correction.

TECHNICAL CALLS

BUY BAYERCROP Rs.1101: The stock has made irregular bottom between 1^st March ,2013 with the low being 1040 and 21^st March's  low at 1057 ,almost taking 200 DMA Support on both occasions . BAYERCROP crossing 1120 then Rs.1185 & Rs.1220 are possible target on the stock which is safe bet in volatile market holds good value for long-term investor. 

SELL TATAPOWER Rs.94: The stock has made a Dead Cross, where 200DMA Rs.101 is cut by 50DMA Rs.100 from the above post which the stock has already corrected 6.9% this week and stock looks very weak to target Rs.85 on lower side. TATAPOWER is trading below all major averages 200DMA Rs.101, 100DMA Rs.103 and 50DMA Rs.100. Stock on weekly charts has broken major support now near 41 weeks lowest close.

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