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Sensex (18197) / Nifty (5482)
In our previous Weekly report, we had mentioned that if Indices
manage to trade above 18766 / 5645 level, a "Bullish
Triangular" pattern could take indices to their next resistance
level of 19132 / 5740. Also, we had mentioned that there was
a possibility of high volatility in the coming trading sessions
due to the RBI's monetary policy and derivatives expiry. During
the initial part of the last week, indices broke out from the
mentioned level and registered a high of 18945 / 5702.
However, the "RBI Monetary Policy" on Tuesday turned the tables
and markets corrected sharply from the highs to test support
levels of 18223 - 18326 / 5496 - 5468. The Sensex ended
with a loss of 2.80%, whereas the Nifty lost 2.70% vis-à-vis the
previous week.
Pattern Formation
The Daily chart of the Indices depicts a "Doji" candlestick
formation which indicates indecisiveness prevailing at the current
level. (Refer exhibit 2)
We are observing that prices have closed near 50%
Fibonacci retracement level of an upside rally from 17314 to
19132 / 5195 to 5740 levels. (Refer exhibit 2)
Also, on the Weekly chart, the RSI momentum oscillator
has convincingly slipped below the 50 mark after nearly 3-4
weeks. RSI sustaining below the 50 level is a sign of weakness.
(Refer exhibit 1)
Future Outlook
Markets fell from their high of 18945 / 5702 registered in the
initial part of the week after the announcement of "RBI Monetary
Policy" and breached 18415 - 18326 / 5532 - 5496 level which
was acting as a strong support zone since the previous few
trading sessions. Going forward, if indices break Friday's high
of 18335 / 5521, then they may bounce back to the levels of
18538 -18771 / 5577 - 5648. On the downside,
18131 / 5453 level (Friday's low) may provide a support. The
violation of this low may reinforce the negative momentum and,
in such a case, indices may test 18000 - 17800 / 5400 - 5345
levels.
We advise traders to stay light on their positions and trade
with proper stop losses.
The range for Nifty has shifted downward; 5400-5700
Nifty spot closed at 5482 this week, against a close of 5634 last week. The Put-Call Ratio decreased from 1.24 to 1.12 points and the
annualized Cost of Carry is positive 1.49%. The Open Interest of Nifty Futures decreased by 10.98%, due to expiry.
Put-Call Ratio Analysis Historical Volatility Analysis
The Nifty PCR open interest is 1.12 points. The initial option
data is suggesting that the Nifty range has shifted downward.
The new range of the market is 5400 to 5700. The 5700 Call
option and 5400 put option have highest open interest. In the
last trading session, the 5100 put added around 50,000
contracts which is huge, though it is start of new series;
suggesting that market may breach its support of 5400 mark.
Historical volatility (HV) has increased from 19.94% to 20.22%.
IV of at the money options increased from 15.50% to 18.60%,
due to uncertainty prevailing in the market. Counters where
HV has increased substantially are ADANIENT, ADANIPOWER,
MTNL, RCOM and BANKINDIA. Stocks where HV has decreased
are MCDOWELL-N, DIVISLAB, SINTEX, HINDZINC and
CROMPGREAV.
Nifty Aug Futures closed at a premium of 6.05 points against a
premium of 29.30 points last week. The Sep futures closed at a
premium of 22.85 points. Few liquid stocks where cost of carry
is positive are TRIVENI, LITL, PANTALOONR, MCLEODRUSS
and WELCORP. Stocks where cost of carry is negative are
ASHOKLEY, BGRENERGY, IOB, BANKINDIA and SUNTV. Stocks
which are trading at a discount due to dividend are INDIACEM,
CHAMBLFERT, ACC, AMBUJACEM and TATAGLOBAL.
Total Open interest of the market has decreased from `146,342
crores to `103,477crores. Stock futures open interest has
decreased from `36,821 crores to `31,975 crores. In august
series, we observed higher rollover in stocks futures than Index
futures. Few liquid counters where open interest has increased
significantly are ADANIENT, ADANIPOWER, IBREALEST,
BANKINDIA and BHEL. Stocks where open interest has
decreased significantly PETRONET, RECLTD, HEROHONDA,
HINDZINC and UNIONBANK.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sensex (18197) / Nifty (5482)
In our previous Weekly report, we had mentioned that if Indices
manage to trade above 18766 / 5645 level, a "Bullish
Triangular" pattern could take indices to their next resistance
level of 19132 / 5740. Also, we had mentioned that there was
a possibility of high volatility in the coming trading sessions
due to the RBI's monetary policy and derivatives expiry. During
the initial part of the last week, indices broke out from the
mentioned level and registered a high of 18945 / 5702.
However, the "RBI Monetary Policy" on Tuesday turned the tables
and markets corrected sharply from the highs to test support
levels of 18223 - 18326 / 5496 - 5468. The Sensex ended
with a loss of 2.80%, whereas the Nifty lost 2.70% vis-à-vis the
previous week.
Pattern Formation
The Daily chart of the Indices depicts a "Doji" candlestick
formation which indicates indecisiveness prevailing at the current
level. (Refer exhibit 2)
We are observing that prices have closed near 50%
Fibonacci retracement level of an upside rally from 17314 to
19132 / 5195 to 5740 levels. (Refer exhibit 2)
Also, on the Weekly chart, the RSI momentum oscillator
has convincingly slipped below the 50 mark after nearly 3-4
weeks. RSI sustaining below the 50 level is a sign of weakness.
(Refer exhibit 1)
Future Outlook
Markets fell from their high of 18945 / 5702 registered in the
initial part of the week after the announcement of "RBI Monetary
Policy" and breached 18415 - 18326 / 5532 - 5496 level which
was acting as a strong support zone since the previous few
trading sessions. Going forward, if indices break Friday's high
of 18335 / 5521, then they may bounce back to the levels of
18538 -18771 / 5577 - 5648. On the downside,
18131 / 5453 level (Friday's low) may provide a support. The
violation of this low may reinforce the negative momentum and,
in such a case, indices may test 18000 - 17800 / 5400 - 5345
levels.
We advise traders to stay light on their positions and trade
with proper stop losses.
The range for Nifty has shifted downward; 5400-5700
Nifty spot closed at 5482 this week, against a close of 5634 last week. The Put-Call Ratio decreased from 1.24 to 1.12 points and the
annualized Cost of Carry is positive 1.49%. The Open Interest of Nifty Futures decreased by 10.98%, due to expiry.
Put-Call Ratio Analysis Historical Volatility Analysis
The Nifty PCR open interest is 1.12 points. The initial option
data is suggesting that the Nifty range has shifted downward.
The new range of the market is 5400 to 5700. The 5700 Call
option and 5400 put option have highest open interest. In the
last trading session, the 5100 put added around 50,000
contracts which is huge, though it is start of new series;
suggesting that market may breach its support of 5400 mark.
Historical volatility (HV) has increased from 19.94% to 20.22%.
IV of at the money options increased from 15.50% to 18.60%,
due to uncertainty prevailing in the market. Counters where
HV has increased substantially are ADANIENT, ADANIPOWER,
MTNL, RCOM and BANKINDIA. Stocks where HV has decreased
are MCDOWELL-N, DIVISLAB, SINTEX, HINDZINC and
CROMPGREAV.
Nifty Aug Futures closed at a premium of 6.05 points against a
premium of 29.30 points last week. The Sep futures closed at a
premium of 22.85 points. Few liquid stocks where cost of carry
is positive are TRIVENI, LITL, PANTALOONR, MCLEODRUSS
and WELCORP. Stocks where cost of carry is negative are
ASHOKLEY, BGRENERGY, IOB, BANKINDIA and SUNTV. Stocks
which are trading at a discount due to dividend are INDIACEM,
CHAMBLFERT, ACC, AMBUJACEM and TATAGLOBAL.
Total Open interest of the market has decreased from `146,342
crores to `103,477crores. Stock futures open interest has
decreased from `36,821 crores to `31,975 crores. In august
series, we observed higher rollover in stocks futures than Index
futures. Few liquid counters where open interest has increased
significantly are ADANIENT, ADANIPOWER, IBREALEST,
BANKINDIA and BHEL. Stocks where open interest has
decreased significantly PETRONET, RECLTD, HEROHONDA,
HINDZINC and UNIONBANK.
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