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Sensex (17306) / Nifty (5211)
In our previous Weekly report, we had mentioned that the Weekly
RSI momentum indicator falling below the 50 Mark level is a
sign of weakness. We had also mentioned that on the downside,
18131 / 5453 level may provide a support and the violation of
this low may reinforce the negative momentum as a result of
which indices may test 18000 - 17800 / 5400 - 5345 levels.
Due to the turmoil in global indices, immense selling pressure
emerged during the previous week, which dragged indices much
lower than a support level of 17800 / 5345. The Sensex ended
with a mammoth loss of 4.90%, whereas the Nifty lost 4.94%
vis-à-vis the previous week.
Pattern Formation
We are witnessing a Weekly close below 5300 level
after nearly 11 months (Last weekly close below 5300 was on
July 2, 2010).
The ADX (14) indicator on the Weekly chart is showing
some possibility of a further weakness in the coming weeks.
The - DI (negative directional index) is moving upwards
supported by the ADX line, which is around 19-20 level. The
ADX rising from 15 to 25 from lower levels indicates that the
trend is strengthening. The ADX line moving above the 25 level
along with - DI is a sign of negative momentum accelerating in
the coming weeks.
The Daily chart depicts a "Bullish Hammer", which requires
a confirmation.
Future Outlook
Our Benchmark indices opened marginally higher during the
initial part of the week but could not sustain at higher levels.
This was mainly due to financial uncertainties across global
markets, which dampened the sentiments during the week. On
Friday's session, a huge sell-off in global indices led our markets
to open down by more than 2% and close well below 5300
after nearly a year. On the positive side, looking at the "Bullish
Hammer" on the Daily chart, there is a possibility of a bounce
during the initial part of the week if indices manage to cross
Friday's high of 17358 / 5230. In such a scenario, they may
test 17500 - 17750 / 5260 - 5345 levels. On the downside, if
Friday's low of 19991 / 5116 is breached after a consolidation
or a minor bounce, then strong negative momentum is likely to
be witnessed in the coming trading sessions, which can drag
indices to lower levels of 16750 - 16650 / 5050 - 4950. In a
worse-case scenario, if our markets fail to hold these support
levels, then they may test 16000 / 4800 level.
We advise traders to stay light on their positions and trade
with proper stop losses. Investors can use the dip towards 4800
to enter (partial buying advised) in counters with strong
fundamentals and good long-term prospects.
Wait for bottom fishing
Nifty spot closed at 5211 this week, against a close of 5482 last week. The Put-Call Ratio decreased from 1.12 to 0.93 points and the
annualized Cost of Carry is positive just 0.04%. The Open Interest of Nifty Futures increased by 20.94%.
Put-Call Ratio Analysis Historical Volatility Analysis
The Nifty PCR open interest decreased from 1.12 to 0.93 points.
Over a week, significant unwinding was observed in the 5400
to 5600 put options and build up was observed in lower put
options from 4800 to 5000 strikes. Amongst call options, the
5200 to 5600 strikes added huge open interest. The FIIs' selling
was `3,028cr in cash market segment in the week gone by.
As option data is suggesting we may see a support for
the market around 5000 levels. Thus, we won't advise bottom
fishing as of now.
Historical volatility (HV) has increased from 20.22% to 22.99%.
IV of at the money options increased from 18.60% to 24.50%.
Counters where HV has increased substantially are
NATIONALUM, BHARATFORG, ESSAROIL, JSWSTEEL and
CAIRN. Stocks where HV has decreased are HEROHONDA,
SUNTV, HINDUNILVR, EXIDEIND and ZEEL.
The Nifty Aug Futures closed at par of spot, against a premium
of 6.05 points last week. The Sep futures closed at a premium
of 15.90 points. Few liquid stocks where cost of carry turned
from negative to positive are SESAGOA, IOB, ONMOBILE,
BGRENERGY and CENTURYTEX. Stocks where cost of carry
turned form positive to negative are KOTAKBANK,
ABIRLANUVO, ESCORTS, GTOFFSHORE and GSPL.
Total Open interest of the market has increased from `103,477
crores to `124,480crores. Stock futures open interest has
decreased from `31,975 crores to `30,753 crores. The
Banknifty futures open interest increased by 50.46% in a week.
Few liquid counters where open interest has increased
significantly are ASHOKLEY, ADANIENT, ADANIPOWER, KSOILS
and IVRCLINFRA. Stocks where open interest has decreased
significantly SIEMENS, TECHM, GODREJIND, ANDHRABANK
and BATAINDIA.
Open Interest Analysis Cost-of-Carry Analysis
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sensex (17306) / Nifty (5211)
In our previous Weekly report, we had mentioned that the Weekly
RSI momentum indicator falling below the 50 Mark level is a
sign of weakness. We had also mentioned that on the downside,
18131 / 5453 level may provide a support and the violation of
this low may reinforce the negative momentum as a result of
which indices may test 18000 - 17800 / 5400 - 5345 levels.
Due to the turmoil in global indices, immense selling pressure
emerged during the previous week, which dragged indices much
lower than a support level of 17800 / 5345. The Sensex ended
with a mammoth loss of 4.90%, whereas the Nifty lost 4.94%
vis-à-vis the previous week.
Pattern Formation
We are witnessing a Weekly close below 5300 level
after nearly 11 months (Last weekly close below 5300 was on
July 2, 2010).
The ADX (14) indicator on the Weekly chart is showing
some possibility of a further weakness in the coming weeks.
The - DI (negative directional index) is moving upwards
supported by the ADX line, which is around 19-20 level. The
ADX rising from 15 to 25 from lower levels indicates that the
trend is strengthening. The ADX line moving above the 25 level
along with - DI is a sign of negative momentum accelerating in
the coming weeks.
The Daily chart depicts a "Bullish Hammer", which requires
a confirmation.
Future Outlook
Our Benchmark indices opened marginally higher during the
initial part of the week but could not sustain at higher levels.
This was mainly due to financial uncertainties across global
markets, which dampened the sentiments during the week. On
Friday's session, a huge sell-off in global indices led our markets
to open down by more than 2% and close well below 5300
after nearly a year. On the positive side, looking at the "Bullish
Hammer" on the Daily chart, there is a possibility of a bounce
during the initial part of the week if indices manage to cross
Friday's high of 17358 / 5230. In such a scenario, they may
test 17500 - 17750 / 5260 - 5345 levels. On the downside, if
Friday's low of 19991 / 5116 is breached after a consolidation
or a minor bounce, then strong negative momentum is likely to
be witnessed in the coming trading sessions, which can drag
indices to lower levels of 16750 - 16650 / 5050 - 4950. In a
worse-case scenario, if our markets fail to hold these support
levels, then they may test 16000 / 4800 level.
We advise traders to stay light on their positions and trade
with proper stop losses. Investors can use the dip towards 4800
to enter (partial buying advised) in counters with strong
fundamentals and good long-term prospects.
Wait for bottom fishing
Nifty spot closed at 5211 this week, against a close of 5482 last week. The Put-Call Ratio decreased from 1.12 to 0.93 points and the
annualized Cost of Carry is positive just 0.04%. The Open Interest of Nifty Futures increased by 20.94%.
Put-Call Ratio Analysis Historical Volatility Analysis
The Nifty PCR open interest decreased from 1.12 to 0.93 points.
Over a week, significant unwinding was observed in the 5400
to 5600 put options and build up was observed in lower put
options from 4800 to 5000 strikes. Amongst call options, the
5200 to 5600 strikes added huge open interest. The FIIs' selling
was `3,028cr in cash market segment in the week gone by.
As option data is suggesting we may see a support for
the market around 5000 levels. Thus, we won't advise bottom
fishing as of now.
Historical volatility (HV) has increased from 20.22% to 22.99%.
IV of at the money options increased from 18.60% to 24.50%.
Counters where HV has increased substantially are
NATIONALUM, BHARATFORG, ESSAROIL, JSWSTEEL and
CAIRN. Stocks where HV has decreased are HEROHONDA,
SUNTV, HINDUNILVR, EXIDEIND and ZEEL.
The Nifty Aug Futures closed at par of spot, against a premium
of 6.05 points last week. The Sep futures closed at a premium
of 15.90 points. Few liquid stocks where cost of carry turned
from negative to positive are SESAGOA, IOB, ONMOBILE,
BGRENERGY and CENTURYTEX. Stocks where cost of carry
turned form positive to negative are KOTAKBANK,
ABIRLANUVO, ESCORTS, GTOFFSHORE and GSPL.
Total Open interest of the market has increased from `103,477
crores to `124,480crores. Stock futures open interest has
decreased from `31,975 crores to `30,753 crores. The
Banknifty futures open interest increased by 50.46% in a week.
Few liquid counters where open interest has increased
significantly are ASHOKLEY, ADANIENT, ADANIPOWER, KSOILS
and IVRCLINFRA. Stocks where open interest has decreased
significantly SIEMENS, TECHM, GODREJIND, ANDHRABANK
and BATAINDIA.
Open Interest Analysis Cost-of-Carry Analysis
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