First Morning Technical Call 18th April 2013

Market Outlook

NIFTY (5688): CNX NIFTY was range bound and closed flat after 250points rally from lower levels if Nifty fails to cross 5750 on closing basis then this rally can fizzle out, as we ahead towards extended weekend and Settlement just 4days away. For the day nifty has to hold onto the 5660 and cross 5735 to target 5780 on higher side while below 5660 then 5600 & 5570 would be levels to watch. Results season has started on mixed note with YESBANK, TCS and HCLTECH reporting good results but all positive are already built in so some profit booking possible. Crude has been correcting which is positive for Oil Marketing companies and stocks like CASTROL, SINTEX, VIPIND and lower Crude is very positive for Indian Economy with a lag impact. Global currency are very volatile normally it is observed when selling is seen across most of asset classes trader should follow strict stop loss as Month of May has normally been negative month. RELIANCE Rs.773 Below Rs.760 Caution advised as stock would break-down from Multiple support.

SENSEX (18731): Sensex closed marginally negative, after 3days sharp rally from low of 18144 to 18869 almost 725Points rally. Sensex has to cross and close above 18930 for the rally to continue till 19200 and below 18600 then correction below 18k becomes possibility as Results season and Parliament starting on 22^nd would keep market volatile. Today Sensex has to hold 18650 and cross18870 to target 18950 & 19040 on higher side, while below 18650 then 18510 & 18420 on downside becomes possible. 

TECHNICAL CALLS 

BUY CASTROL Rs. 310: CASTROL has made higher low and now higher high should take the stock above Rs.335 in near term as stock has take strong support around 200DMA Rs.301 & 100DMA Rs.307 levels. Stock all time high is Rs.339 and if that is crossed then stock can rally till 375 also on higher side.

BUY CADILA Rs.752 : CADILA has formed a good bottom formation now stock looks very good to target Rs.800 on higher side stock trades below major averages 200DMA Rs.833 & 100DMA Rs.811 which can also become target. Stock for last 45trading days has been consolidating around 720-760 levels making a strong base after correcting from Rs.975 highs.

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News Views & Events 18th April 2013

News:

Ø  Leading two-wheeler manufacturers, Bajaj Auto and TVS Motor Company have hiked prices of their vehicles by up to Rs 800, mainly to offset the impact of rising freight charges.

Ø  Ranbaxy Laboratories and its Japanese parent Daiichi Sankyo announced synergies in Brazil to expand their business in the Latin American nation.

Ø  Tata Teleservices said it will surrender telecom spectrum beyond 2.5 mega-hertz in all circles barring Delhi and Mumbai in "protest" against government move to charge one-time fee for airwaves beyond this threshold.

Ø  IL&FS Engineering and Construction said that it has received letter of intent (LoI) for construction of a Rs.77.5 Crs commercial complex in Gurgaon from Unitech Ltd.

Ø  The stake sale deal of Jet Airways and Abu Dhabi-based Etihad Airways could be finalised in a month.

Ø  GMR airports to go public, plans to raise Rs 2000 Crs, to facilitate PE exit.

Ø  Tata Power and Reliance Infrastructure renewed their verbal duel even as a case on the levy of cross-subsidy surcharge on Mumbai suburban consumers is yet to be heard in the Supreme Court.

Ø  The Securities Appellate Tribunal (SAT) granted relief to the board of directors of Zenith Infotech from furnishing bank guarantees worth $33.93 million (around Rs 184 Crs) till the next hearing, slated for May 7.

Ø  DCHL is in the process of demerging its printing and publication, retail and sporting activities into a separate entity called "Land Interactive Media" registered in Delhi.

Ø  Cabinet & CCEA to meet today, to consider HMT revival plan; proposal to infuse Rs.1083 Crs into HMT.

Ø  The government is likely to announce a host of incentives for sectors like engineering and textiles to boost shipments amid global demand slowdown. Commerce and Industry Minister may extend interest subsidy scheme and provide incentives for incremental exports and SEZs.

Ø  Puravankara Projects is wooing shareholders with a handsome 70% dividend ahead of its share sale through an institutional placement programme (IPP) next month.

Key events for the day:

Ø  Board Meeting for Q4FY13 results of: CRISIL, Essar Ports, IndusInd Bank, MRF, VST Industries, Wendt India.

Ø  Release of Retail Sales in UK.

Ø  Release of Unemployment Claims in US.

 

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Derivatives Strategist 18th April 2013

Data Feeler: Nifty future started the day on a positive note following the better global cues and rallied towards 5730 area but could not able to hold as profit booking emerged at higher levels after strong recovery in last two trading sessions. Nifty future for the day, if it sustains above 5720 levels then only rally may continue towards 5750 -5780 levels whereas sustaining below 5680 levels may see profit booking in the market towards 5650-5620 levels. Looking at the option concentration data for April series, maximum put OI is shifted at 5600 followed by 5500 strike prices with aggressive fresh put addition seen at 5600 put and maximum call OI is shifted at 5700 followed by 5900 strike prices. Bank Nifty for the day it has sup port around 1180 levels whereas sustaining above 12000 levels may give further upside towards next hurdle around 12350 levels.

 

Put Call Ratio based on Open Interest of Nifty moved up from 1.02 to 1.04 levels. Historical Volatility of Nifty moved down from 19.69 to 19.10 levels and Implied Volatility also moved down from 17.24 to 16.03 levels.

 

Nifty future saw decrease in OI by -2.35% with a marginal fall in price. Market witnessed buying interest especially in Metal, FMCG, Auto, HC, Banking, Realty and CD sector stocks whereas marginal selling pressure was seen in Oil & Gas, IT and Tech space. Nifty future closed at premium of 6 points as compared to premium of 7 points in previous trading session.

 

The market turnover increased by 1.6% in terms of number of contracts traded vis-à-vis previous trading day whereas in terms of rupees increased by 3.6%.

 

Derivative Calls: Buy on CIPLA & SAIL.

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