Markets Weekly 11/05/2009 To 16/05/2009

After Making a non-stop rally towards upside, now market looking for a consolidation before another up move… In between Elections in India, Global Markets, Commodity prices along with Industrial & Earnings data are going to play major roll in coming days…

->The market has recovered by 50% and the momentum has caught many by surprise as they now are feeling that they have missed the bus and should have invested at 9000 levels. Again if you browse our previous posts we have been recommending Index funds for a while and have made phenomenal returns. But the recovery has been fierce which is not good for the markets.

->As said above it is now safe and wise to stay in majority cash until the results of the election are announced. The market would move up if either of L.K.Advani or the existing PM becomes PM yet again. After a 50% rally it is safer to book profits. Nifty charts were suggesting that the resistance would come at 3800 – 3820 and it has reacted after hitting 3700+ today. Investors generally do not like those who recommend to book profits in an upmove. But if something really funny happen’s like Congress supporting Mayawati as PM happens we can get good opportunities to buy at lower levels. The open vowing of NDA allies by Rahul Gandhi yesterday send a message that Congress is desperate to remain at centre and can act funny if necessary.

->Expect huge volatility and use upmoves to sell and book profits. It is not wrong if we buy 10 – 15% higher but in more conducive scenario.

NIFTY (3621) : Keep On Booking Profits On Every Rise (DO NOT SHORT)

Resistance : 3655 / 3730 / 3760 / 3820 / 3845

Support : 3905 / 3580 / 3540 / 3490 / 3445 / 3365

SENSEX

Resistance : 12025 / 12135 / 12295 / 12475

Support : 11825 / 11650 / 11520 / 11325

WEEKLY MARKET OUTLOOK
NIFTY FUTURE
Trend : Volatile
Total OI of NIFTY FUT up 6.47% NIFTY FUT closed up 4.29% last week. OI of N= IFTY 3500 CE is down 14% prices up 50% showing profit booking. OI of NIFTY = 3600 CE is up 53% prices up 59%, NIFTY 3700 CE is up 152% prices up 70% and= OI of NIFTY 3800 CE is up 108% prices up 80% showing call writing at highe= r levels. OI of NIFTY 3500 PE is up 246% prices down 32% and NIFTY 3600 PE = is up 2160% prices down 30% last week showing put buying at lower levels.

We expect NIFTY SPOT to trade volatile next week.

On up side, NIFTY SPOT Resistance at 3700- 3710, 3730-40 levels. Strong Resistance at 3780-90 levels.

On down side, NIFTY SPOT Support at 3560-70, 3480-90.Strong Support at 3430-40 levels.

SECTOR WATCH
SECTOR : POWER
Trend : Bullish
Total OI of NEYVELILIG FUT is up 43% prices up 17%, POWERGRID FUT up 12% prices up 6% and PTC FUT up 143% prices up 4% last week showing long positions build up.

We expect positive move in coming week.

WEEKLY NIFTY FUTURE OBSERVATION
Observation:-
->Total OI of NIFTY FUT up 6.47%, NIFTY FUT closed up 4.29% last week.

->Out of NIFTY 50 stocks FUTS, 38 Stock FUTS closed positive, 5 Stock FUTs = closed negative and 7 Stock FUTS closed flat last week.

->OI of NIFTY 3500 CE is down 14% prices up 50% showing profit booking. OI= of NIFTY 3600 CE is up 53% prices up 59%, NIFTY 3700 CE is up 152% prices = up 70% and NIFTY 3800 CE is up 108% prices up 80% last week showing call wr= iting at higher levels. OI of NIFTY 3800 CE is 36.16 LK, highest OI in CALLS.

->OI of NIFTY 3500 PE is up 246% prices down 32% and NIFTY 3600 PE is up 160% prices down 30%. Last week showing put buying at lower levels.

OI of NIFTY 3400 PE is up 43% prices down 35% showing not only short covering plus buying too. OI of NIFTY 3400 PE is 44.28 LK, highest OI in PUTs.

->Total OI of MAY series CALLs is up by 88.15 LK to 2.45 CR. MAY series PUTs is up by 1.00 CR to 3.11 CR last week. MAY series PCR (OI) at 1.26.

Momentum Stocks :

WWIL / RNRL / JPASS / GMRINFRA / PRAJIND / ALOKIND / ASHOKLEYLAND / ORCHIDCHEM / INDIAINFO / SAIL / ISPATIND / HDIL / BAJAJHIND / TVSMOTORS / SUZLON / APTECH

Conclusion :-
I expect NIFTY SPOT to trade very volatile next week. On up side, NIFTY SPOT Resistance at 3700-3710, 3730-40 levels. High possibility NIFTY SPOT will not sustain above 3700 levels. On down side, NIFTY SPOT support 3560-70 levels. Below 3550 levels, panic unwinding possible for TGT 3480-90, 3430-40 levels.