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Market History
Indian markets, after a series of sluggish and range bound days of trading, registered a break out, following the Union Budget 2010-11. NSE Nifty ended the week at 4922.30, adding 77 points or 1.60% to the previous week and BSE Sensex added 238 points (1.47%) and closed at 16429.55.
The global indices remained mixed. When the Asian markets closed in green, with Hong Kong being the leader with 3.59%, followed by Chinese SSE Composite Index closed 1.12% high, almost all other indices lost the grip and shed mart of the recovery they made in the previous week’s gains. Argentine Merval Index was the worst hit, falling 4.87%, followed by German DAX (-2.16%) and Mexico (-1.67%). Brazilian Bovespa fell 1.62%. US Dow Jones Industrial Average closed 0.74% below the previous week’s closing.
Back to the domestic markets, the sectors that gained the most were Metals, which appreciated 3.77%, followed by Bank (2.81%), Capital Goods (2.78%) and Auto (2.47%). FMCG led the losers, falling 3.32%, and Consumer Durables fell 1.89%. The BSE Midcap index fell 0.54% and closed at 6397.82 and Small Cap closed at 8067.40, falling 1.67%.
During the week, the Foreign Institutional Investors (FIIs) bought equity for Rs. 1155.60 crore, taking the total investment for the moth of February to Rs. 1019.40. However, they are net sellers till February 25, 2010 for Rs. 117.40 crore. the domestic mutual funds are continuing to be the net sellers for Rs. 309.80
crore for the month, taking the aggregate sales figure for the year 2010 to Rs. 1621.10 crore
OBSERVATION
1) Total OI of NIFTY FUT down 22.91% NIFTY FUT up 1.74% last week. OI down due to expiry. 1 points premium increased to 8 points (+7 points) premium compare to NIFTY SPOT last week. New series started with light OI at 2.45 CR.
2) Out of NIFTY 50 STOCK FUTS, 31 STOCK FUTS closed positive, 6 STOCK FUTs closed negative and 13 STOCK FUTs close flat last week.
3) OI of MARCH series 5000 CE is up 162.75% prices down 6.80% and 5100 CE is up 207.73% prices down 17.96% showing call buying. 5000 CE highest OI at 45.98 LK.
4) OI of MARCH series 4600 PE is up 168.96% prices down 65.81% and 4700 PE is up 75.21% prices down 58.31% showing put writing. OI of MARCH series 4800 PE is up 193.68% prices down 51.06% showing aggressive put writing. 4800 PE highest OI at 52.07 LK.
5) Total OI of NIFTY MARCH series CALLs is up 1.17 CR to 2.50 CR, PUTs is up 1.64 CR to 3.34 CR. NIFTY MARCH series PCR (OI) at 1.33 up by 0.07 points last week.
6) FII OI in INDEX FUT at 423374 contracts down by 105449 contracts last week due to expiry.
Technical Outlook
Indian market has resumed the recovery after a series of sluggish trading and after taking resistance from the 100 days.
Exponential Moving Average (EMA-100). The recovery in the NSE Nifty and BSE Sensex can continue in the coming days, even though the first target of this recovery is already reached. Further selling will possibly emerge from around these levels or from higher levels.
As mentioned before, the current recovery in the market is understood to be part of a 3-phase selling and the current recovery is perceived to be the phase-2. At current levels, the 100 days Simple Moving Average which is trading at 5010 will possibly exert pressure for NSE Nifty.
Any upside is expected only if sustains above this. The second resistance for the week to come and the upper/second target for the current recovery phase is at 5095. A close above this is required for any further upside, but this is not expected at this point of time. The first support for the week ahead is 4795, followed by the 200-days EMA of 4670. The volume buildup in the last day’s break-out is giving some hope for bulls; but it will have to sustain in the days to come.
Technical View : Cash Market
Nifty’ s long term trend is up and short term trend is sideways. Nifty is still trading in 4800-4950 range. Until, Nifty breaks out of range, volatility may be continuing. If Nifty manages to break out of range on upside then projected target of breakout is 5225 in next few weeks. On maintaining below 4800 levels selling pressure may be seen.
For trading during the coming trading sessions, trend deciding level is 4950. If Nifty shows strength above 4950 levels then we may see rally to 5000/5060/5090/5160. If Nifty doesn’t sustain above 4950 levels then decline to 4890/4850/4790/4750/4725 may be seen.
Technical View: NIFTY Future
Nifty MARCH Future opened at 4905.30, touched the low of 4830 and then due to huge short covering coupled with fresh long buildup tested the high of 5002 & closed at 4930.35. The main point to be noted is that Nifty future was able to go beyond 4950 & closed above 4900. Short term support for nifty fut is 4750-4800 possible resistance will be 5050-5135. If Nifty future decline below 4750 levels then selling pressure till 4600-4550 levels may also be seen.
Trading strategy for Medium term Traders: On Medium term basis, Nifty has support zone of 4750-4800. Medium term resistance zone is 5050-5150. Buying on dips may be considered in the zone of 4800-4850 level with the short term SL of 4750 for the target of 4935/4980/5050.
Trading strategy for Short term Traders: Short term trend of Nifty fut is seems to be range bound with upward bias & buying on dips may be considered around 4850 level with the SL of 4800 for the target of 4935/4980/5035.
For day-trading purposes on Tuesday: Long positions may be taken in support zone around 4880 with the SL of 4850, for likely target of 4950/4990.
Index Watch
NIFTY (4922) Price trading near its medium term average but below its trend line: The Nifty has closed near its medium term moving average (curr value = 4952) during the budget session but has failed to close above it. It also remains well below its trend line. Technically, from this perspective the Nifty remains weak.
200 Day EMA: The Nifty had bounced off its 200 Day EMA (current level = 4680). The 4675 - 4700 area could offer support to the trend.
Momentum turning up: The medium term momentum (Stochastics) has turned up again. However, this is a very early sign and needs some follow up.
Outlook: The short term trend of the Nifty is neutral / weak. An early sign of strength has emerged but it needs some follow up. A weekly close above 4975 would be seen as a positive development. But overall the scene is one of wait & watch.
Sector Watch
CNX Defty (3696) up 76 points (+2.1%)
The Defty drifted during the early part of the week but recovered in the budget session. It has given an encouraging follow up to the last week’s action. A weekly close above 3705 would be a positive development for the index.
Supports : 3600 / 3500
Resistances : 3775 / 3850
BSE PSU (9214) down 9 points (-0.1%)
The PSU index remains in a narrow range from a weekly perspective. No clear direction is emerging as yet. A close above 9325 would be seen as a positive development in the index.
Supports : 9100 / 8800
Resistances : 9500 / 9700
BSE Auto (7171) up 173 points (+2.5%)
The Auto index has witnessed severe volatility during this week. It has closed above its medium term average (curr value = 7050). However, it is too early to take a directional call on the trend. We would prefer to wait & watch for a week.
Supports : 7000 / 6850
Resistances : 7250 / 7450 / 7700
BUY BSE AUTO INDEX
The index was signaling an upmove in last one week and today the index rallied more than 4% to close
the day above resistance level of 7100.
The momentum indicator MACD has turned into Buy mode signaling downside is limited and any
intra-day or near term fall should be used as a Buying opportunity.
We expect index would continue its upmove and would target 7450 and then 7700 levels.
On the downside, support is at 6850, which is the lower end of the channel.
Best BUY picks: Tata Motors and M&M
BSE Cap Goods (13475) up 331 points (+2.5%)
The Cap Goods index continued trading in a very narrow range during the week. It has closed above its medium term average (curr value = 13380). However, we are still not in a psoition to take a clear directional view.
Supports : 13300 / 13000
Resistances : 13500 / 13800
BSE IT (5174) up 92 points (+1.8%)
The IT index has inched up during the week. It continues to close above its medium term average (currently at 5000). Further recovery in the index looks possible.
Supports : 5000 / 4800
Resistances : 5300 / 5500
BSE Bankex (9829) up 269 points (+2.8%)
The Bankex has closed up firmly after the budget. It also closed above its medium term average which was reading at 9700. The development is positive and can lead to further upsides.
Supports : 9750 / 9500 / 9100 / 8850
Resistances : 10005 / 10300
SELL BSE BANK INDEX
Bank index has faced resistance at the upper end of the downward channel.
Stiff resistance for the Index is at 10005 and we expect the index would find Selling
pressure at higher levels.
The momentum indicators are also continuing in Sell mode signaling any rise
from current levels should be used as a Selling opportunity.
We expect the index to witness correction in next couple of weeks and could target 8850
on the downside.
Best SELL picks: SBI and ICICI Bank
BUY BSE REALTY INDEX
Realty index gained more than 5% but in last half an hour, the index almost wiped out the gain and
finally closed the day with just 1% gain.
The index is witnessing positive divergence and momentum indicators are in Buy mode signaling
bullish signs near term.
We recommend Accumulating long positions in this sector on every decline, as the downside is
limited until 3100.
On the upside the index could target 3500 and then 3800, which is 61.8% retracement of the
fall from 4400
Best BUY picks: Unitech and DLF.
SELL: BSE OIL & GAS INDEX
Oil and Gas index is witnessing Selling pressure on every rise.
Momentum indicators are also in Sell mode; MACD just turned into Sell mode even though index closed the day with 1% gain.
We expect index to target 9100, which is the lower end of the channel.
Best SELL picks: Reliance and Cairn
Commodities
Crude Oil ($78.55)
The price of Crude Oil has faced resistance at the $80 level as expected. This resistance has yet to be overcome. We prefer a wait & watch stance for now.
Supports : 77.55 / 75.55 / 73.8
Pivot : 78.75
Resistances : 80 / 81.3 / 82.9 / 85
CRUDE Mar : Strong Above 3730
Support : 3590 / 3515 / 3440
Pivot : 3665
Resistance : 3745 / 3815 / 3895
Silver ($16.20) : Weak Below 15.5
The price of Silver has attempted an upmove in line with other metals. However, the level of its 200 DMA ($16.20) is offering resistance. The upmove in Silver is the weakest so far. However, a push up to the level of $16.75 - 17 can still develop.
Supports : 15.9 / 15.5 / 15.1 / 14.85
Pivot : 16.15
Resistances : 16.5 / 17 / 17.75
SILVER May : Weak Below 25400
Support : 25180 / 24250 / 23720
Pivot : 25710
Resistance : 26645 / 27175 / 28105
Aluminium ($2086)
Aluminium price turned choppy and has not yet overcome resistance at $2200. The price is moving in sharp two way trends. This tendency is likely to continue for some more sessions.
Supports : 2050 / 1925
Resistances : 2150 / 2200
ALUMINIUM March : Strong Above 100
Support : 95.6 / 96.6 / 91.4
Pivot : 97.8
Resistance : 99.8 / 102 / 104
Zinc ($2116)
Zinc price faced resistance at $2400 as we had expected. The price has now fallen back. It is likely that the trend will turn choppy for the next few sessions. Firm support can be expected at the $2000 level.
Supports : 2100 / 2000
Resistances : 2200 / 2325
ZINC Mar : Strong Above 105
Support : 96.95 / 92.85 / 87.15
Pivot : 102.65
Resistance : 106.75 / 112.45 / 116
Gold ($1110) : Weak Below 1095
The price of Gold bounced from its support level of $1050. It is presently trading in a choppy sideways trend. However, it continues to hold the potential to advance further to $1150 - 1175 where resistance is likely to develop.
Supports : 1095 / 1070 / 1045
Pivot : 1115
Resistances : 1135 / 1160 / 1185 / 1230
Buy Arnd 1090/95,Sl Blw 1070,Tgt 1135/1160 [OR]
Buy Abv 1035 (Closing Basis),Sl 1110,Tgt 1175/1185+
GOLD Apr (16786) : Weak Below 16480
Support : 16505 / 16220 / 16025 / 15950
Pivot : 16695
Resistance : 16985 / 17175 / 17450 / 17790 / 18300
Buy Around 16600/630,Sl 16480,Tgt 16890/16980/17110 [OR]
Buy Above 16985(Closing Basis),Sl 16695,Tgt 17285/17445
Copper ($6999)
Copper price has faced resistance at $7450 and has been steady for the last few sessions. This appears to be a consolidation of the previous uptrend. This consolidation can continue for some more sessions.
Support : 7000 / 6850
Resistances : 7350 / 7450
COPPER Apr : Stong Above 340
Support : 325.3 / 316.1 / 307
Pivot : 334.3
Resistance : 343.5 / 352.5 / 361
NGAS Mar : Strong Above 230
Support : 216.6 / 212.4 / 204.6
Pivot : 224.5
Resistance : 228.6 / 236.4 / 240.6
LEAD Mar : Strong Above 104
Support : 96.7 / 93.2 / 87.1
Pivot : 102.8
Resistance : 106.3 / 112.4 / 115
NICKEL Mar : Weak Below 940
Support : 940 / 910 / 890
Pivot : 955
Support : 985 / 1005 / 1040
Global Equities
BOVESPA Brazil (66121)
The Bovespa has retraced some of its gains.However, this is part of a consolidation move which is unfolding as expected. This consolidation process is likely to continue over the next few sessions.
Supports : 66000 / 65600
Resistances : 66800 / 67500
SHANGHAI SE Composite China (3053)
The SSE has moved slightly above its 200 DMA. The bounce is unfolding as expected and may lead the index further upward. But from a long term perspective, the trend is bearish and as long as the SSE remains below 3400, it is to be considered a weak market.
Supports : 3000 / 2950
Resistances : 3075 / 3125
HANGSENG Hong Kong (20659)
The HS has been very volatile last week but has moved above its 200 DMA in the process. It is also near its resistance area of 20750. It is a wait & watch situation. We maintain that it will remain weak as long as it stays below 20750 - 21000.
Supports : 20100 / 19600
Resistances : 21000 / 21350
NIKKEI Japan (10150)
The Nikkei has retraced some of its gains and is now near its 200 DMA (value - 10031) again. It has turned choppy as expected by us and is likely to remain so for some time.
Supports : 10000 / 9700
Resistances : 10325 / 10500
FTSE United Kingdom (5278)
The FTSE has seen choppy moves this week. This is part of the consolidation trend that we had expected. This choppiness is likely to continue for some more sessions.
Supports : 5100 / 5000
Resistances : 5400 / 5600
MSCI – EMI MS Emerging Markets (923)
The EMI has drifted down over the last few sessions.It remains above its 200 DMA which is now at 892. We expected a sideways narrow range bound move and the current move is in line with this expectation. A major directional thrust may take some more time to develop.
Supports : 900 / 875
Resistances : 950 / 975
S & P 500 (1103)
The SP500 has continued closing above 1090 despite some severe volatility. This is a positive signal for now. It is steadily establishing its positive credentials. A sideways consolidation is unfolding as expected. If the index holds above 1080 it should be considered as positive.
Supports : 1080 / 1050
Resistances : 1120 / 1140
Currencies
Dollar/Rupee (46.27)
The USD/INR has been stagnating in a narrow range as we had expected. This trend is likely to continue for some more time. The overall range is expected to be between 46 - 47.
Support : 46.25 / 46.00
Resistances : 46.50 / 46.75
Euro/Dollar (1.3580)
The EUR/USD has been arrested in the 1.35 area as we expected. How it unfolds from here remains to be seen. It is a wait & watch situation for now.
Support : 1.3400 / 1.3200
Resistances : 1.3650 / 1.3750
Dollar Index DXY (80.60)
The DXY has been choppy as expected but has kept up its positive bias. The upward momentum can carry the DXY further to about 82. Bullish fatigue is likely to set in around this level as the technicals will become overbought.
Support : 80.50 / 79.00
Resistances : 82.00 / 83.00
Dollar/Yen (89.30)
The USD/JPY has fallen back sharply. We expected two way trends in the Yen and that is playing out. But the volatility in the trend is much more severe than expected. A bounce back can occur again, but it is best to take a wait and watch stance in such severe volatility.
Supports : 89.00 / 88.00
Resistances : 90.50 / 92.50
SECTOR WATCH [ MIDCAP IT ] : EARLY SIGN OF DOWN MOVE
ICSA FUT
Total OI down 4.88% prices down 2.04% last week. OI down due to expiry. Shorts build up. R 136, S 127.
MPHASIS FUT
Total OI up 15.93% prices down 9.54% last week. OI up despite expiry.
Positional shorts build up. R 682, S 658.
POLARIS FUT
Total OI up 9.81% prices down 6.97% last week. OI up despite expiry. Shorts build up. R 156, S 142.
STOCK FUT TO WATCH NEXT WEEK : PANTALOONR FUT [ BEARISH ]
Total OI up 17.74% prices down 4.67% last week. OI up despite expiry. Shorts build up. Bounce expected but trend is down. R 398, S 371.
AXISBANK
Price: Rs 1123
Outlook : Positive over the medium term.
Target Price : Rs 1275 (2-3 Months)
Combination of moving averages in bullish crossover : The combination of moving averages used for tracking the medium term trend of the stock is presently in a bullish crossover mode. It is indicating that the medium term trend is positive at present.
Momentum gaining strength on the downside : The medium / long term momentum (MACD) had been drifting downward. It is now perking up and looks set to cross above its trigger line. This is a sign that the trend is likely to gain further strength and result in improved prices.
Recommendation : The trend of Axis Bank as read by its moving averages and momentum indicator is indicating strength from a medium term perspective. This strength can extend further and can result in higher prices. A price target of Rs1275 looks achievable over the next 2 - 3 months.
BUY
CENTURYTEXT,Sl 460 (Closing Basis),Tgt 520/35/50
ICICIBNK Abv 870,Sl 845,Tgt 895/905/915
RELINFRA Abv 990,Sl 965,Tgt 1030/45/60
MLL Abv 53,Sl 49,Tgt 56/58/60
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