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SAMVAT 2068 begins in favour of bulls
Sensex (17805) / Nifty (5361)
Benchmark indices opened on a quiet note on Monday's session
and faced resistance at 17260/5198 in the initial part of the
week. As stated in our previous report, markets needed some
strong positive trigger on the global or domestic front to cross
this resistance level. The decisions taken during the European
summit were perceived as positive developments and acted as
positive triggers. Also, as expected, the effect of the positive
crossover of "RSI - Smoothened" oscillator was seen when indices
crossed 17260 / 5198 level. As a result, indices opened nearly
3% higher on Friday's session and closed almost near the highest
point of the week. On the sector front, Auto, Metal and Oil &
Gas contributed heavily in this rally. Despite being a truncated
week, the Sensex ended with a mammoth gain of 6.07%,
whereas the Nifty gained 6.15%, vis-à-vis the previous week.
Pattern Formation
On the Weekly chart, the "Downward Sloping Trend Line"
is placed around the 18150 / 5475 level.
We are observing a positive crossover in the Weekly ADX
(9) indicator.
The Daily "200 SMA" is placed at the 18020 / 5410 level.
The "Higher - Top Higher - Bottom" formation is confirmed
on the Daily chart after nearly six months.
We are witnessing a downside gap area of 17671 to 17350
/ 5322 to 5219 created on October 28, 2011.
Future Outlook
Finally, after several attempts, the bulls have managed to cross
a firm resistance level of 17260 / 5198 and closed convincingly
above it. As a result, a "Higher - Top Higher - Bottom" formation
on the Daily chart was confirmed after nearly six months. Going
forward, it is likely that indices are now heading initially towards
the Daily "200 SMA" placed at the 18020 / 5410 level and
then towards the "Downward Sloping Trend Line" placed around
18150 / 5475. Thus, indices may face supply pressure near
18020 - 18150 / 5410 - 5475 levels. However, we are also
observing a positive crossover in the "ADX (9)" indicator, which
suggests possibility of a strong momentum if indices manage
to cross and sustain above the 18175 / 5475 level. The effect
of positive crossover may push indices higher to test 18300 -
18440 / 5500 - 5550 levels. At this juncture, the "Narrow range"
body formation on the Daily chart indicates possibility of a
consolidation or a minor pull back if indices trade below the
17671 / 5322 level. In this case, indices may fill the gap of
17671 to 17350 / 5322 to 5219 created on October 28, 2011.
We advise traders to adopt stock specific approach and avoid
taking undue risks.
Lot of shorts still uncovered; 5500 looks achievable
Nifty spot closed at 5360.70 this week, against a close of 5049.95 last week. The Put-Call Ratio increased from 1.40 to 1.41 levels
and the annualized Cost of Carry is positive 6.25%. The Open Interest of Nifty Futures increased by 6.99%.
Put-Call Ratio Analysis Implied Volatility Analysis
PCR - OI has being stable from around 1.40 levels it increased
a bit to 1.41 level and reason for the same is increase in open
interest of both call options and put options simultaneously in
Nov. series. On call options front we have seen some buildup
in 5500-5700 strike price, while in put options 5200-5400
strike price have seen the maximum buildup. We believe it's
more of buying of options as implied volatility is very low.
Implied Volatility (IV) has being decreased from 22.67% to
19.05%. HV for BANKNIFTY is trading at 38.59%. Liquid
counters having very high Historical Volatility are IVRCLINFRA,
KFA, OPTOCIRCUI, JUBLFOOD and ABAN. Stocks where HV
are on lower side are INDHOTEL, PIRHEALTH, CIPLA, IOC and
VIDEOIND.
Nifty futures closed at a Premium of 24.80 points against the
Premium of 24.10 points to its spot. Next month future is trading
with premium of 47.80 points. Counters where CoC is high
are GVKPIL, LITL, BHARATFORG, VIDEOIND and TTML. Stocks
with negative CoC are ROLTA, FORTIS, TATASTEEL, ASHOKLEY
and TATAMOTORS.
Total open interest of market has decreased from `1,38,302.40
crores to `1,09,626.90 crores. Stock futures open interest has
decreased from `32,215/- crores to `31,415/- crores.
Frontline counters which added considerable open interest are
GAIL, M&M, ICICIBANK, ITC and CIPLA. Open interest was
shed in some liquid counters like IDEA, EDUCOMP, IDBI,
LICHSGFIN and ABAN.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
SAMVAT 2068 begins in favour of bulls
Sensex (17805) / Nifty (5361)
Benchmark indices opened on a quiet note on Monday's session
and faced resistance at 17260/5198 in the initial part of the
week. As stated in our previous report, markets needed some
strong positive trigger on the global or domestic front to cross
this resistance level. The decisions taken during the European
summit were perceived as positive developments and acted as
positive triggers. Also, as expected, the effect of the positive
crossover of "RSI - Smoothened" oscillator was seen when indices
crossed 17260 / 5198 level. As a result, indices opened nearly
3% higher on Friday's session and closed almost near the highest
point of the week. On the sector front, Auto, Metal and Oil &
Gas contributed heavily in this rally. Despite being a truncated
week, the Sensex ended with a mammoth gain of 6.07%,
whereas the Nifty gained 6.15%, vis-à-vis the previous week.
Pattern Formation
On the Weekly chart, the "Downward Sloping Trend Line"
is placed around the 18150 / 5475 level.
We are observing a positive crossover in the Weekly ADX
(9) indicator.
The Daily "200 SMA" is placed at the 18020 / 5410 level.
The "Higher - Top Higher - Bottom" formation is confirmed
on the Daily chart after nearly six months.
We are witnessing a downside gap area of 17671 to 17350
/ 5322 to 5219 created on October 28, 2011.
Future Outlook
Finally, after several attempts, the bulls have managed to cross
a firm resistance level of 17260 / 5198 and closed convincingly
above it. As a result, a "Higher - Top Higher - Bottom" formation
on the Daily chart was confirmed after nearly six months. Going
forward, it is likely that indices are now heading initially towards
the Daily "200 SMA" placed at the 18020 / 5410 level and
then towards the "Downward Sloping Trend Line" placed around
18150 / 5475. Thus, indices may face supply pressure near
18020 - 18150 / 5410 - 5475 levels. However, we are also
observing a positive crossover in the "ADX (9)" indicator, which
suggests possibility of a strong momentum if indices manage
to cross and sustain above the 18175 / 5475 level. The effect
of positive crossover may push indices higher to test 18300 -
18440 / 5500 - 5550 levels. At this juncture, the "Narrow range"
body formation on the Daily chart indicates possibility of a
consolidation or a minor pull back if indices trade below the
17671 / 5322 level. In this case, indices may fill the gap of
17671 to 17350 / 5322 to 5219 created on October 28, 2011.
We advise traders to adopt stock specific approach and avoid
taking undue risks.
Lot of shorts still uncovered; 5500 looks achievable
Nifty spot closed at 5360.70 this week, against a close of 5049.95 last week. The Put-Call Ratio increased from 1.40 to 1.41 levels
and the annualized Cost of Carry is positive 6.25%. The Open Interest of Nifty Futures increased by 6.99%.
Put-Call Ratio Analysis Implied Volatility Analysis
PCR - OI has being stable from around 1.40 levels it increased
a bit to 1.41 level and reason for the same is increase in open
interest of both call options and put options simultaneously in
Nov. series. On call options front we have seen some buildup
in 5500-5700 strike price, while in put options 5200-5400
strike price have seen the maximum buildup. We believe it's
more of buying of options as implied volatility is very low.
Implied Volatility (IV) has being decreased from 22.67% to
19.05%. HV for BANKNIFTY is trading at 38.59%. Liquid
counters having very high Historical Volatility are IVRCLINFRA,
KFA, OPTOCIRCUI, JUBLFOOD and ABAN. Stocks where HV
are on lower side are INDHOTEL, PIRHEALTH, CIPLA, IOC and
VIDEOIND.
Nifty futures closed at a Premium of 24.80 points against the
Premium of 24.10 points to its spot. Next month future is trading
with premium of 47.80 points. Counters where CoC is high
are GVKPIL, LITL, BHARATFORG, VIDEOIND and TTML. Stocks
with negative CoC are ROLTA, FORTIS, TATASTEEL, ASHOKLEY
and TATAMOTORS.
Total open interest of market has decreased from `1,38,302.40
crores to `1,09,626.90 crores. Stock futures open interest has
decreased from `32,215/- crores to `31,415/- crores.
Frontline counters which added considerable open interest are
GAIL, M&M, ICICIBANK, ITC and CIPLA. Open interest was
shed in some liquid counters like IDEA, EDUCOMP, IDBI,
LICHSGFIN and ABAN.
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