Market Snapshot
Benchmark indices witnessed heavy buying, Sensex and Nifty ended with gains of ~1.6% each. The major gainers were ITC (up 5.5%), RCOM (up 5.2%) and BPCL (up 4.8%) while the list of losers included Sterlite (down 0.8%), Idea (down 0.7%), and Ranbaxy (down 0.4%). Buying was witnessed in FMCG, realty and auto. US markets extended September rally a day before the FOMC meeting and rose more than ~1%. The S&P 500 broke through the crucial ~1,130 barrier that has capped the index's highs since mid-May. Asian markets are comfortably trading in green zone.
Sentiment Indicators
For the September series, the maximum OI build up in options is seen at strikes of 5800 CE (~5.24mn shares) and 5400 PE (~11.18mn shares). IVs are currently ~16-18% levels. Nifty futures OI was up ~3% and was trading at a premium of 14-16 points to the spot levels.
Outlook
Nifty opened on a positive note once again; made an open-low and continued to rally till the end of the session. It is only a shade below the 6000 mark which should be conquered in the immediate short-term. The sequence of higher top higher bottom continues on the daily chart indicating the underline uptrend. The higher time frame charts have improve significantly in favor of the bulls., but the hourly charts can throw up some surprise in the short-term as the market is heavily overbought and there are signs of negative divergence. The overall market breadth was in favor of bulls for the second day in a row. Nifty stocks depicted a stellar advance decline of 5:1. Nifty is rallying at a scorching pace after the breakout above 5650, with target of 6350 (2008 bull market high). The daily overbought conditions only warns us of an impending correction in the short-term, however the underline chart structure continues to remain positive. Yesterdays 1.62% rally can be attributed mainly to the FMCG sector that was up 3.5%. Realty and Metals contributed significantly to the gains. There was a last hour surge on the back of Banking and Auto counters that helped the index go past 5970 resistance. Power, Pharma and IT space were the underperformers. Sugar stocks are trending higher and the strength was seen across the board. ADAG stocks are breaking out of one year consolidation range offering good short-term trading opportunities.
Bullish Setups: JSW Steel, R.Com, DLF, Cipla, BPCL.
European markets have rallied ~1.5% in yesterday’s session with strength particularly in the FTSE. All major indices are trading above the short/medium and long term moving averages with buy signal on daily and weekly charts. The SPX has torn through the 1130 resistance after giving a ‘golden cross’ buy signal. The next best target for that index is at 1180 and 1200. Crude has retraced the fall of the past four days, and a move beyond $77 would negate the bearish alternate. Gold has rallied brilliantly from the $1210 lows and is now approaching crucial resistance cluster between $1285-1300 where it is forming a rising wedge pattern.
Interesting chart setups: DLF, LIC Hsg, Rel Cap, Bharti
Nifty: Resistance: 6045 /6115 Support: 5950/5900
F&O Dividend Update
STOCKS GOING EX TODAY | |||
Bloomberg Ticker | Company Name | DPS | Ex Date |
BHUS IN EQUITY | Bhushan Steel & Strips Lt | 2.50 | 21-Sep-10 |
OPTC IN EQUITY | Opto Circuits (India) Limited | 4.00 | 21-Sep-10 |
UNSP IN EQUITY | United Spirits Ltd. | 2.50 | 21-Sep-10 |
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