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Bulls bounce back - Markets likely to rally further
Sensex (18816) / Nifty (5654)
In our previous Weekly report, we had mentioned that the
markets have been oscillating in the range of 17470 / 5233
on the downside and 18737 / 5608 on the upside since the
past six weeks. We had also mentioned that on the Daily chart,
we see probability of a pattern that resembles a "Pennant", if
the indices close below 17700 / 5300 levels, and on the upside
resistance is at 18310 - 18490 - 18736 / 5500 - 5550 - 5600
levels. The week began on a weak note, made a low of 17792
/ 5348 from where a strong rally was witnessed that led the
indices to break past, and close above the mentioned resistance
levels.
Both Sensex and Nifty ended with net gain of 5.2% vis-à-vis
the previous week.
Pattern Formation
On the Daily chart, we are observing that the prices have
broken out of an Ascending triangle pattern on the Nifty chart.
However the Sensex chart indicates that the said pattern would
confirm if the Sensex closes above 18850 levels.
On the Weekly chart, we are witnessing that the momentum
oscillator's viz. Stochastic and the RSI are positively poised which
suggests continuation of the up move.
Future Outlook
After trading in the band of 17470 / 5233 on the downside
and 18737 / 5608 on the upside since the past six weeks, the
indices have closed well above the upper range of the band.
On the Daily Sensex charts, prices tested the upper trendline of
the pattern, which now resembles an Ascending Triangle
whereas in the Nifty Daily chart it has given a breakout of the
said pattern. The two consecutive trading sessions with upward
Gaps reflect continuation of the up move. At present immediate
resistance is at the rising 200-day SMA which is at 18950 /
5689 levels. Any close above this level would see the indices
testing 19340 - 19575 / 5800 - 5874 levels. On the downside,
18453 - 18199 / 5545 - 5470 may act as a support for the
week.
Liquidity seems to be returning in the market
Nifty spot has closed at 5654 this week, against a close of 5374 last week. The Put-Call Ratio has increased from 1.14 to 1.52 levels
and the annualized Cost of Carry (CoC) is positive 28.46%. The Open Interest of Nifty Futures decreased by 0.51%.
Put-Call Ratio Analysis
The Nifty PCR increased from 1.14 to 1.52 levels. Over the
week, huge build up was observed in the 5400 to 5700 put
options. The 5600 put added more than 1,00,000 contracts in
a week. Also, huge unwinding was observed in most of the call
options. The 5700 call has highest open interest and the level
may act as an immediate resistance for the market. FIIs have
started buying in cash market and are forming long positions
in the Index futures.
Futures Annual Volatility Analysis
Historical volatility of Nifty has decreased from 27.49% to
27.24%. IV of at-the-money options decreased from 24.25%
to 17.50%. Over the week, few liquid counters where HV has
increased significantly are TATACOMM, HINDOILEXP, GTL,
CIPLA and DCHL. Stocks where HV has decreased significantly
are TRIVENI, ADANIENT, MCDOWELL-N, CANBK and
GMRINFRA.
Open Interest Analysis
Total open interest of the market is `1,52,222cr against
`1,44,986cr last week and the stock futures open interest
increased from `31,711cr to `35,405cr. A blend of short
covering and long formations were observed in the market.
Few liquid stocks where open interest increased significantly
are GRASIM, RANBAXY, MOSERBAER, UNITECH and LUPIN.
Stocks where open interest decreased significantly are RECLTD,
CIPLA, APOLLOTYRE, ACC and SESAGOA
Cost-of-Carry Analysis
Nifty March futures closed at a premium of 26.45 points against
a premium of 13.15 points last week and the April futures closed
at a premium of 46.90 points. Few liquid stocks where Costof-
Carry turned from negative to positive are NATIONALUM,
CENTRALBK, SUNPHARMA, WIPRO and NCC. Stocks where
Cost-of-Carry turned from positive to negative are YESBANK,
VOLTAS, ALBK, DLF and BPCL.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Bulls bounce back - Markets likely to rally further
Sensex (18816) / Nifty (5654)
In our previous Weekly report, we had mentioned that the
markets have been oscillating in the range of 17470 / 5233
on the downside and 18737 / 5608 on the upside since the
past six weeks. We had also mentioned that on the Daily chart,
we see probability of a pattern that resembles a "Pennant", if
the indices close below 17700 / 5300 levels, and on the upside
resistance is at 18310 - 18490 - 18736 / 5500 - 5550 - 5600
levels. The week began on a weak note, made a low of 17792
/ 5348 from where a strong rally was witnessed that led the
indices to break past, and close above the mentioned resistance
levels.
Both Sensex and Nifty ended with net gain of 5.2% vis-à-vis
the previous week.
Pattern Formation
On the Daily chart, we are observing that the prices have
broken out of an Ascending triangle pattern on the Nifty chart.
However the Sensex chart indicates that the said pattern would
confirm if the Sensex closes above 18850 levels.
On the Weekly chart, we are witnessing that the momentum
oscillator's viz. Stochastic and the RSI are positively poised which
suggests continuation of the up move.
Future Outlook
After trading in the band of 17470 / 5233 on the downside
and 18737 / 5608 on the upside since the past six weeks, the
indices have closed well above the upper range of the band.
On the Daily Sensex charts, prices tested the upper trendline of
the pattern, which now resembles an Ascending Triangle
whereas in the Nifty Daily chart it has given a breakout of the
said pattern. The two consecutive trading sessions with upward
Gaps reflect continuation of the up move. At present immediate
resistance is at the rising 200-day SMA which is at 18950 /
5689 levels. Any close above this level would see the indices
testing 19340 - 19575 / 5800 - 5874 levels. On the downside,
18453 - 18199 / 5545 - 5470 may act as a support for the
week.
Liquidity seems to be returning in the market
Nifty spot has closed at 5654 this week, against a close of 5374 last week. The Put-Call Ratio has increased from 1.14 to 1.52 levels
and the annualized Cost of Carry (CoC) is positive 28.46%. The Open Interest of Nifty Futures decreased by 0.51%.
Put-Call Ratio Analysis
The Nifty PCR increased from 1.14 to 1.52 levels. Over the
week, huge build up was observed in the 5400 to 5700 put
options. The 5600 put added more than 1,00,000 contracts in
a week. Also, huge unwinding was observed in most of the call
options. The 5700 call has highest open interest and the level
may act as an immediate resistance for the market. FIIs have
started buying in cash market and are forming long positions
in the Index futures.
Futures Annual Volatility Analysis
Historical volatility of Nifty has decreased from 27.49% to
27.24%. IV of at-the-money options decreased from 24.25%
to 17.50%. Over the week, few liquid counters where HV has
increased significantly are TATACOMM, HINDOILEXP, GTL,
CIPLA and DCHL. Stocks where HV has decreased significantly
are TRIVENI, ADANIENT, MCDOWELL-N, CANBK and
GMRINFRA.
Open Interest Analysis
Total open interest of the market is `1,52,222cr against
`1,44,986cr last week and the stock futures open interest
increased from `31,711cr to `35,405cr. A blend of short
covering and long formations were observed in the market.
Few liquid stocks where open interest increased significantly
are GRASIM, RANBAXY, MOSERBAER, UNITECH and LUPIN.
Stocks where open interest decreased significantly are RECLTD,
CIPLA, APOLLOTYRE, ACC and SESAGOA
Cost-of-Carry Analysis
Nifty March futures closed at a premium of 26.45 points against
a premium of 13.15 points last week and the April futures closed
at a premium of 46.90 points. Few liquid stocks where Costof-
Carry turned from negative to positive are NATIONALUM,
CENTRALBK, SUNPHARMA, WIPRO and NCC. Stocks where
Cost-of-Carry turned from positive to negative are YESBANK,
VOLTAS, ALBK, DLF and BPCL.
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