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Bulls cautious near 200-Day SMA
Sensex (17563) / Nifty (5284)
On Monday, markets opened on a quiet note and registered a
weekly high of 17702 / 5360. As stated in our previous report,
indices faced resistance near to 200-Day SMA resistance of
18020 / 5410 level. Further, as expected, indices corrected
during the week after the violation of 17671 / 5322 (low of
October 28, 2011) and filled the downside gap area of 17671
to 17350 / 5322 to 5219 created on October 28, 2011. Friday's
session began on an optimistic note, but then markets lost their
early gains as the day progressed and closed marginally below
the 17600 / 5300 mark. On the sectoral front, the Auto, Metal
and Oil & Gas sectors remained under pressure, whereas the
FMCG and Midcap sectors closed marginally in the positive
territory. The Sensex ended with a nominal loss of 1.36%,
whereas the Nifty lost 1.43%, vis-à-vis the previous week.
Pattern Formation
On the Weekly chart, the "Downward Sloping Trend Line"
is now placed around the 18100 / 5450 level
The Daily "200 SMA" is placed at 18000 / 5400 level
The "20 EMA" on the Daily and Weekly chart is placed at
17165 / 5165 and 17300 / 5200, respectively.
The positive crossover in the Weekly ADX (9) indicator is
still intact.
Future Outlook
Going forward, indices are likely to face resistance near the
"Downward Sloping Trend Line" level of 18100 / 5450 and
"200-Day SMA" which is placed at 18000 / 5400 level. However,
the impact of positive crossover in the Weekly ADX (9) indicator
would come into action if indices manage to break the 18100
/ 5450 level. In this scenario, we may witness a strong buying
interest, which would push indices higher to test the next
resistance level of 18300 - 18440 / 5500 - 5550. On the
downside, our benchmark indices have a decent support in the
range of 17300 - 17165 / 5200 - 5160. These levels coincide
with the "20 EMA" on the Weekly as well as Daily chart. A breach
of 17165 / 5160 level may attract selling pressure, which may
then drag indices lower to test crucial support levels of 16900
- 16669 / 5085 - 5011. Broadly speaking, indices are trading
in the range of 18100 to 17165 / 5450 to 5160. A breakout
from this range on either side would set the direction for our
benchmark indices.
Therefore, we reiterate our view that traders should stay light
on positions and continue to adopt a stock - specific approach.
Current pause seems to be consolidation; carry longs.
Nifty spot closed at 5284.20 this week, against a close of 5360.70 last week. The Put-Call Ratio decreased from 1.41 to 1.37 levels
and the annualized Cost of Carry is positive 11.28%. The Open Interest of Nifty Futures decreased by 2.39%.
Put-Call Ratio Analysis Implied Volatility Analysis
PCR-OI has decreased from 1.41 levels to 1.37 levels last week.
As market consolidates in narrow range and growing global
concerns, call writers have become active in out-of-money strikes
ranging from 5300 to 5600. However the quantum is not very
significant. Same sort of activity is witnessed in puts ranging
from 5000 to 5200. Statistically as of now it seems advisable
to carry long positions.
Implied Volatility (IV) has being increased from 19.05% to
20.52%. HV for BANKNIFTY is trading at 33.89%. Liquid
counters having very high Historical Volatility are IVRCLINFRA,
DCHL, JUBLFOOD, JSWSTEEL and KFA. Stocks where HV are
on lower side are VIDEOIND, PIRHEALTH, ULTRACEMCO,
POWERGRID and IOC.
Nifty futures closed at a Premium of 32.65 points against the
Premium of 24.80 points to its spot. Next month future is trading
with premium of 57.55 points. Counters where CoC is high
are TTML, JSWISPAT, TATACOMM, RUCHISOYA and UNITECH.
Stocks with negative CoC are BRFL, PNB, SUNTV, RPOWER and
ASHOKLEY.
Total open interest of market has increased from `. 1,09,626.90
crores to `. 1,22,441.20 crores. Stock futures open interest
has increased from `. 31,415/- crores to `. 33,043/- crores.
Frontline counters which added considerable open interest are
BANKBARODA, COALINDIA, HINDUNILVR, MARUTI and ITC.
Open interest was shed in some liquid counters like JSWSTEEL,
UNIONBANK, CENTURYTEX, JPASSOCIAT and AMBUJACEM
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Bulls cautious near 200-Day SMA
Sensex (17563) / Nifty (5284)
On Monday, markets opened on a quiet note and registered a
weekly high of 17702 / 5360. As stated in our previous report,
indices faced resistance near to 200-Day SMA resistance of
18020 / 5410 level. Further, as expected, indices corrected
during the week after the violation of 17671 / 5322 (low of
October 28, 2011) and filled the downside gap area of 17671
to 17350 / 5322 to 5219 created on October 28, 2011. Friday's
session began on an optimistic note, but then markets lost their
early gains as the day progressed and closed marginally below
the 17600 / 5300 mark. On the sectoral front, the Auto, Metal
and Oil & Gas sectors remained under pressure, whereas the
FMCG and Midcap sectors closed marginally in the positive
territory. The Sensex ended with a nominal loss of 1.36%,
whereas the Nifty lost 1.43%, vis-à-vis the previous week.
Pattern Formation
On the Weekly chart, the "Downward Sloping Trend Line"
is now placed around the 18100 / 5450 level
The Daily "200 SMA" is placed at 18000 / 5400 level
The "20 EMA" on the Daily and Weekly chart is placed at
17165 / 5165 and 17300 / 5200, respectively.
The positive crossover in the Weekly ADX (9) indicator is
still intact.
Future Outlook
Going forward, indices are likely to face resistance near the
"Downward Sloping Trend Line" level of 18100 / 5450 and
"200-Day SMA" which is placed at 18000 / 5400 level. However,
the impact of positive crossover in the Weekly ADX (9) indicator
would come into action if indices manage to break the 18100
/ 5450 level. In this scenario, we may witness a strong buying
interest, which would push indices higher to test the next
resistance level of 18300 - 18440 / 5500 - 5550. On the
downside, our benchmark indices have a decent support in the
range of 17300 - 17165 / 5200 - 5160. These levels coincide
with the "20 EMA" on the Weekly as well as Daily chart. A breach
of 17165 / 5160 level may attract selling pressure, which may
then drag indices lower to test crucial support levels of 16900
- 16669 / 5085 - 5011. Broadly speaking, indices are trading
in the range of 18100 to 17165 / 5450 to 5160. A breakout
from this range on either side would set the direction for our
benchmark indices.
Therefore, we reiterate our view that traders should stay light
on positions and continue to adopt a stock - specific approach.
Current pause seems to be consolidation; carry longs.
Nifty spot closed at 5284.20 this week, against a close of 5360.70 last week. The Put-Call Ratio decreased from 1.41 to 1.37 levels
and the annualized Cost of Carry is positive 11.28%. The Open Interest of Nifty Futures decreased by 2.39%.
Put-Call Ratio Analysis Implied Volatility Analysis
PCR-OI has decreased from 1.41 levels to 1.37 levels last week.
As market consolidates in narrow range and growing global
concerns, call writers have become active in out-of-money strikes
ranging from 5300 to 5600. However the quantum is not very
significant. Same sort of activity is witnessed in puts ranging
from 5000 to 5200. Statistically as of now it seems advisable
to carry long positions.
Implied Volatility (IV) has being increased from 19.05% to
20.52%. HV for BANKNIFTY is trading at 33.89%. Liquid
counters having very high Historical Volatility are IVRCLINFRA,
DCHL, JUBLFOOD, JSWSTEEL and KFA. Stocks where HV are
on lower side are VIDEOIND, PIRHEALTH, ULTRACEMCO,
POWERGRID and IOC.
Nifty futures closed at a Premium of 32.65 points against the
Premium of 24.80 points to its spot. Next month future is trading
with premium of 57.55 points. Counters where CoC is high
are TTML, JSWISPAT, TATACOMM, RUCHISOYA and UNITECH.
Stocks with negative CoC are BRFL, PNB, SUNTV, RPOWER and
ASHOKLEY.
Total open interest of market has increased from `. 1,09,626.90
crores to `. 1,22,441.20 crores. Stock futures open interest
has increased from `. 31,415/- crores to `. 33,043/- crores.
Frontline counters which added considerable open interest are
BANKBARODA, COALINDIA, HINDUNILVR, MARUTI and ITC.
Open interest was shed in some liquid counters like JSWSTEEL,
UNIONBANK, CENTURYTEX, JPASSOCIAT and AMBUJACEM
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