News Views & Events 22nd April 2013

News:

Ø      Reliance Communications said it is no longer in talks with Bahrain Telecommunications Co (Batelco) for selling a stake in its enterprise business unit. Instead, the company said, it is in talks with a private equity consortium that included Samena Capital and hoped to complete the deal by May-end.

Ø      Two state-owned steel makers - Steel Authority of India Ltd (SAIL) and Rashtriya Ispat Nigam Ltd (RINL) have evinced interest to be NMDC's joint venture partner in the Rs.15,525-crore proposed steel project at Nagarnar in Chhattisgarh.

Ø      Tata Power plans to set up a 28.8 MW solar plant near Satara, Maharashtra this fiscal, as a part of its strategy to meet its clean energy capacity target.

Ø      Muthoot Fincorp is targeting to nearly double its micro-lending business to Rs.600 crore this fiscal from Rs.330 crore in FY14.

Ø      Cairn India plans to invest Rs.5,000 crore on its Rajasthan oil fields in three years to 2016 under a new integrated development plan, even as it seeks extension of block contract beyond 2020.

Ø     Work at auto-major Mahindra and Mahindra 's engine manufacturing facility at Igatpuri near Nashik, which has been stalled for the last 13 days following the "tools down" agitation by workers, is likely to resume from tomorrow with the management agreeing to reinstate two suspended employees.

Ø      Kolte-Patil has its eye set on Mumbai and Bangalore. Expansion in these new cities will help the company in margin expansion from 35 percent to atleast 40-45 percent.

Ø      United Breweries completes Scottish & Newcastle merger.

Ø      BPCL announces new gas discovery in offshore Mozambique.

Ø      HP may sell stake in Mphasis.

Ø      Sesa Goa expect to start production in Karnataka by May. Company is awaiting forest clearance from environment ministry. Hope to get environmental clearance from MoEF.

Ø      PC Jeweller plans to open around 20 new showrooms in the country by the end of the current financial year.

Key events for the day:

Ø      Board Meeting for Q4FY13 results of: Cairn India, Ultratech Cement, Mindtree, Persistent, Tamilnadu Petroproducts, Mahindra Life, Swaraj engines, Tata Sponge, Zensar Tech, Foseco, Manali Petrochemicals.

Ø      India - Parliament session resumes today.

Ø      Release of EUR Consumer Confidence.

Ø      Release of USD Existing Home Sales.

 

 

 

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First Morning Technical Call 22nd April 2013

MARKET OUTLOOK

NIFTY (5783): CNX Nifty made a stellar comeback last week towards 5800 levels and closed highest in 20 trading sessions, as the BULLISH WOLFE PATTERN, took full effect in the previous week. For the day, Nifty has to cross 5830 and sustain 5780 on the down side to carry the positivity into this week as well. Nifty successfully holding 5780 on the down side for the week can target 5900-5920 levels. On the flip  side if the index doesn't cross 5830 on the upside then chances of a steep correction could become high as a major conventional bearish head and shoulder can be formed if the resistance at around 5830-5850 is not crossed. Today parliament ses sion begins to complete the remaining budget session where expectation is very high as FM has been travelling abroad to assure more reforms to investors from abroad. Today we have results of CAIRN & ULTRACEMCO while tomorrow results of  HDFCBANK and COROMANDELINTL will be out . WIPRO has disappointed the street with its results and all 4 IT Stocks look weak enough to correct ahead of derivatives settlement as INFY alone has lost 21% in this settlement. On the other hand, RCOM has gained 55% this month alone and expect huge short covering in the stock going forward. 

SENSEX (19016): Sensex closed stunningly higher for the week as slump in prices of the yellow metal and crude pushed the investors towards the equity segment. For the day, Sensex has to sustain 18900 on the downside and target 19180-19200 on the upside which could negate the formation of the right shoulder of the bearish head and shoulder pattern on daily charts. Failing to cross the mentioned upside levels, could open up possibilities of the index drifting lower towards 18600 again.

TECHNICAL CALLS 

BUY EIDPARRY Rs. 159:  EIDPARRY has made broad unconventional Inverted Head & Shoulder on daily charts and above Rs.161, a target of Rs.180 becomes possible in the stock. EIDPARRY has corrected from high of Rs.256 to low of Rs.133 in 20weeks and now its 38.2% retracement Rs.180 & 50% 195 becomes possible soon.

BUY RALLIS Rs.126: RALLIS has made Rounding bottom formation and has given a break-out above sloping down trendline and now stock looks very good to target 145-150 levels on higher side.  RALLIS  is trading above 50DMA Rs.136 and also above its 20 DMA at 119.10 but, below 200DMA Rs.136 & 100DMA Rs.134.

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Derivatives Strategist 22nd April 2013

Data Feeler: Nifty future continued to maintain its positive momentum and it rallied another 100 points with making high near by 5800 psychological zone. Nifty on weekly basis witnessed rise in price by 3.36% along with decrease in OI by 1%. Nifty future for the day, if it sustains above 5780 levels then rally may be continued towards 5850 levels whereas sustaining below 5750 levels may see profit booking in the market towards 5720-5700 levels. Looking at the option concentration data for April series, maximum put OI is at 5600 followed by 5500 strike prices and maximum call OI is shifted at 5800 followed by 5900 strike prices. Bank Nifty for the day it has support around 12000 levels whereas sustaining above 12300 levels which is the immediate hurdle area may give further upsid e towards next hurdle around 12500 levels.

Put Call Ratio based on Open Interest of Nifty moved up significantly from 1.04 to 1.15 levels. Historical Volatility of Nifty moved up from 19.10 to 19.88 levels but Implied Volatility moved down from 16.03 to 15.27 levels.

Nifty future saw decrease in OI by -0.7% with a rise in price by 1.59%. Market witnessed buying interest almost across the board especially in CD, CG, Banking, Auto, Realty, Oil & PSU, Power, Tech and FMCG sector stocks whereas marginal selling pressure was seen only in IT space. Nifty future closed at par as compared to premium of 6 points in previous trading session.

The market turnover increased by 2% in terms of number of contracts traded vis-à-vis previous trading day whereas in terms of rupees increased by 2.54%.

 

Derivatve Calls : Buy on RANBAXY & UNION BANK.

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