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Undertone positive - Probability of short-term consolidation
Sensex (18763) / Nifty (5627)
In our previous Weekly report, in view of a "Hammer" on the
weekly chart and a "Divergence" on the momentum Stochastic
Oscillator on the daily chart, we had mentioned that indices
are likely to witness an upside momentum. On the upside,
immediate resistance is at 18380 / 5520 levels. If indices
manage to close above this level, then they may test 18673 -
19025 / 5605 - 5720 levels. The week opened on a positive
note witnessed a rally and made a high of 19031 / 5705,
which was close to the mentioned level.
The Sensex and the Nifty both ended with net gain of 2.9% visร -
vis the previous week.
Pattern Formation
๔ On the Weekly chart, we are observing a Bullish Inverse
"Head and Shoulder" pattern in the making .The said pattern
would be confirmed only if prices breach the downward sloping
trendline, joining the two significant highs of 21109 & 20665 /
6339 & 6181. Further, the momentum oscillator viz. RSI has
given a downward sloping trendline breakout, which suggests
that the underline momentum is strong.
๔ On the Daily chart, the immediate resistance is the
downward sloping trendline (mentioned above) as well as the
200-day SMA, which is at 19155 / 5750 level.
Future Outlook
Broadly, indices after a vertical rally for the six consecutive
trading sessions have faced resistance near the downward
sloping trendline joining the two significant highs of 21109 &
20665 / 6339 & 6181. The value of the sloping trendline at
present is in the range of 19000 - 19155 / 5700 - 5750 levels.
The daily 200-day SMA also coincides with 19155 / 5750 levels.
Hence, going forward, this level would act as a major resistance
level. If indices manage to close above this level, then they are
likely to test 19652 - 20292 / 5895 - 6092 levels. On the
downside, there is high probability that the upward gap areas
will provide support for the indices. These levels are at 18381 -
18177 / 5519 - 5455.
Market heading towards 5800 level
Nifty spot closed at 5627 this week, against a close of 5471 last week. The Put-Call Ratio is 1.23 and the annualized Cost of Carry is
positive 2.59%. The Open Interest of Nifty Futures decreased by 22.06% due to expiry of June series.
Put-Call Ratio Analysis Historical Volatility Analysis
PCR open interest is 1.23 points. In July series, the 5600 and
5800 call options have almost same open interest, which are
highest among all calls. In put options, the 5300 strike has
highest open interest. However, 5400 seems to be an immediate
support for the market in this series. Market has its immediate
resistance around 5800 levels. Although we are not suggesting
going short around mentioned levels as FIIs are continuously
buying in the Index futures and also in cash segment.
IV of at the money options has decreased from 19.16% to
16.80%. Historical volatility (HV) has decreased by 9.18% from
22.77% to 20.68%. Counters where HV has increased
substantially are VIDEOIND, BATAINDIA, NAGARFERT, ZEEL and
TTML. Stocks where it has decreased are GTL, HINDOILEXP,
ADANIPOWER, ORCHIDCHEM and HEROHONDA.
Nifty July Futures closed at a premium of 11.20 points against
a premium of 23.50 points last week. The Aug future closed at
a premium of 27.65 points. Few liquid stocks where cost of
carry is positive are LITL, ISPATIND, MOSERBAER, RAYMOND
and GTLINFRA. Stocks where cost of carry is negative are
VIDEOIND, SUNTV, PIRHEALTH, MARUTI and HEROHONDA.
Total Open interest of the market has decreased from `1,46,341
crores to `97,853 crores. Stock futures open interest has
decreased from `33,976 crores to `31,011 crores. In July series
most of the banking counters have witnessed high rollover. Few
liquid counters where major unwinding was observed were
VIDEOIND, PFC, HINDALCO, ASHOKLEY and SBIN. Stocks
where significant build up was observed were VOLTAS, TRIVENI,
TATAMTRDVR, LITL and UNIONBANK
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Undertone positive - Probability of short-term consolidation
Sensex (18763) / Nifty (5627)
In our previous Weekly report, in view of a "Hammer" on the
weekly chart and a "Divergence" on the momentum Stochastic
Oscillator on the daily chart, we had mentioned that indices
are likely to witness an upside momentum. On the upside,
immediate resistance is at 18380 / 5520 levels. If indices
manage to close above this level, then they may test 18673 -
19025 / 5605 - 5720 levels. The week opened on a positive
note witnessed a rally and made a high of 19031 / 5705,
which was close to the mentioned level.
The Sensex and the Nifty both ended with net gain of 2.9% visร -
vis the previous week.
Pattern Formation
๔ On the Weekly chart, we are observing a Bullish Inverse
"Head and Shoulder" pattern in the making .The said pattern
would be confirmed only if prices breach the downward sloping
trendline, joining the two significant highs of 21109 & 20665 /
6339 & 6181. Further, the momentum oscillator viz. RSI has
given a downward sloping trendline breakout, which suggests
that the underline momentum is strong.
๔ On the Daily chart, the immediate resistance is the
downward sloping trendline (mentioned above) as well as the
200-day SMA, which is at 19155 / 5750 level.
Future Outlook
Broadly, indices after a vertical rally for the six consecutive
trading sessions have faced resistance near the downward
sloping trendline joining the two significant highs of 21109 &
20665 / 6339 & 6181. The value of the sloping trendline at
present is in the range of 19000 - 19155 / 5700 - 5750 levels.
The daily 200-day SMA also coincides with 19155 / 5750 levels.
Hence, going forward, this level would act as a major resistance
level. If indices manage to close above this level, then they are
likely to test 19652 - 20292 / 5895 - 6092 levels. On the
downside, there is high probability that the upward gap areas
will provide support for the indices. These levels are at 18381 -
18177 / 5519 - 5455.
Market heading towards 5800 level
Nifty spot closed at 5627 this week, against a close of 5471 last week. The Put-Call Ratio is 1.23 and the annualized Cost of Carry is
positive 2.59%. The Open Interest of Nifty Futures decreased by 22.06% due to expiry of June series.
Put-Call Ratio Analysis Historical Volatility Analysis
PCR open interest is 1.23 points. In July series, the 5600 and
5800 call options have almost same open interest, which are
highest among all calls. In put options, the 5300 strike has
highest open interest. However, 5400 seems to be an immediate
support for the market in this series. Market has its immediate
resistance around 5800 levels. Although we are not suggesting
going short around mentioned levels as FIIs are continuously
buying in the Index futures and also in cash segment.
IV of at the money options has decreased from 19.16% to
16.80%. Historical volatility (HV) has decreased by 9.18% from
22.77% to 20.68%. Counters where HV has increased
substantially are VIDEOIND, BATAINDIA, NAGARFERT, ZEEL and
TTML. Stocks where it has decreased are GTL, HINDOILEXP,
ADANIPOWER, ORCHIDCHEM and HEROHONDA.
Nifty July Futures closed at a premium of 11.20 points against
a premium of 23.50 points last week. The Aug future closed at
a premium of 27.65 points. Few liquid stocks where cost of
carry is positive are LITL, ISPATIND, MOSERBAER, RAYMOND
and GTLINFRA. Stocks where cost of carry is negative are
VIDEOIND, SUNTV, PIRHEALTH, MARUTI and HEROHONDA.
Total Open interest of the market has decreased from `1,46,341
crores to `97,853 crores. Stock futures open interest has
decreased from `33,976 crores to `31,011 crores. In July series
most of the banking counters have witnessed high rollover. Few
liquid counters where major unwinding was observed were
VIDEOIND, PFC, HINDALCO, ASHOKLEY and SBIN. Stocks
where significant build up was observed were VOLTAS, TRIVENI,
TATAMTRDVR, LITL and UNIONBANK
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