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5200 - A major hindrance for the bulls
Sensex (17083) / Nifty (5132)
The week opened with a positive bias and gained momentum
throughout the week to close on an optimistic note. As stated
in our previous report, we witnessed a surge in Indices after
crossing the high of the past week's "Dragonfly Doji" candlestick
pattern near the 16430 / 4940 level. Subsequently, indices
moved towards the gap area of 16800 - 17000 / 5050 - 5110
created on September 22, 2011. The Sensex ended with a fair
gain of 5.24%, whereas the Nifty gained 5%, vis-à-vis the
previous week.
Pattern Formation
We are observing a positive crossover in Weekly "RSI -
Smoothened" momentum oscillator.
On the Weekly chart, there is a "Horizontal Trend Line"
resistance at 17256 / 5198 level.
The "20 EMA" on the Weekly chart is placed at
17260 / 5177 level.
Future Outlook
On Friday's session, markets surged significantly higher mainly
due to strong positive momentum in IT and Oil & Gas counters.
Looking at the Weekly chart, it is observed that indices are
nearing the "Horizontal Trend Line" resistance at 17256 / 5198
levels. This level coincides with "20 EMA" on the Weekly chart
and adds weight in favour of the bears. Consequently,
17260 / 5198 levels may act as a major hurdle for the bulls.
However, on the other hand, we are observing a positive
crossover in the weekly "RSI - Smoothened" oscillator, which
indicates if indices manage to cross and sustain above
17260 / 5198 levels, then the current positive momentum may
increase even further. In such a case, indices may rally towards
the gap area of 17358 - 17665 / 5230 - 5323 created
on August 5, 2011. On the downside, 16316 - 16510 /
5034 - 4964 levels are likely to act as a support in the coming
trading session.
Markets are nearing strong resistance levels; therefore, we
advise traders to stay light on positions and trade with strict
stop losses.
Its Bullish FII's Vs Bearish Non-FII's. We are with FII's
Nifty spot closed at 5132.30 this week, against a close of 4888.05 last week. The Put-Call Ratio increased from 1.38 to 1.56 levels
and the annualized Cost of Carry is positive 7.14%. The Open Interest of Nifty Futures increased by 6.51%.
Put-Call Ratio Analysis Implied Volatility Analysis
PCR-OI has increased from 1.38 levels to 1.56. It is in-line with
direct correlation between market rising and so does
put-call ratio. However its important to dissect the ratio. Deep
out-of-money puts have unwound positions and near strikes of
puts have seeing writing interest. Always in calls buying has
taken place in 5200 to 5400 strikes while 4800 to 5000 have
seen writers covering their positions.
Implied Volatility (IV) has being reduced considerably from
29.97% to 22.67%. HV for BANKNIFTY is trading at 40.32%.
Liquid counters having very high Historical Volatility are
JUBLFOOD, KFA, KSOILS, MOSERBAER and SUNTV. Stocks
where HV are on lower side are BRFL, BOSCHLTD, GLAXO,
NHPC and BAJAJHLDG.
Nifty futures closed at a Premium of 11.05 points against the
Premium of 10.55 points to its spot. Next month future is trading
with premium of 28.30 points. Counters where CoC is high
are TRIVENI, CENTRALBK, POLARIS, GVKPIL and
MPHASIS. Stocks with negative CoC are ABAN,
SESAGOA, ABGSHIP, CHAMBALFERT and BANKBARODA.
Total open interest of market has increased from
`1,09,346.70 crores to `1,25,671.70/- crores. Stock futures
open interest has increased from `26,083/- crores to
`30,043/- crores. Frontline counters which added considerable
open interest are COALINDIA, BAJAJHIND, SESAGOA,
HCLTECH and MARUTI. Open interest was shed in big
names like AUROPHARMA, RANBAXY, L&T, TITAN
and BHARTIARTL.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
5200 - A major hindrance for the bulls
Sensex (17083) / Nifty (5132)
The week opened with a positive bias and gained momentum
throughout the week to close on an optimistic note. As stated
in our previous report, we witnessed a surge in Indices after
crossing the high of the past week's "Dragonfly Doji" candlestick
pattern near the 16430 / 4940 level. Subsequently, indices
moved towards the gap area of 16800 - 17000 / 5050 - 5110
created on September 22, 2011. The Sensex ended with a fair
gain of 5.24%, whereas the Nifty gained 5%, vis-à-vis the
previous week.
Pattern Formation
We are observing a positive crossover in Weekly "RSI -
Smoothened" momentum oscillator.
On the Weekly chart, there is a "Horizontal Trend Line"
resistance at 17256 / 5198 level.
The "20 EMA" on the Weekly chart is placed at
17260 / 5177 level.
Future Outlook
On Friday's session, markets surged significantly higher mainly
due to strong positive momentum in IT and Oil & Gas counters.
Looking at the Weekly chart, it is observed that indices are
nearing the "Horizontal Trend Line" resistance at 17256 / 5198
levels. This level coincides with "20 EMA" on the Weekly chart
and adds weight in favour of the bears. Consequently,
17260 / 5198 levels may act as a major hurdle for the bulls.
However, on the other hand, we are observing a positive
crossover in the weekly "RSI - Smoothened" oscillator, which
indicates if indices manage to cross and sustain above
17260 / 5198 levels, then the current positive momentum may
increase even further. In such a case, indices may rally towards
the gap area of 17358 - 17665 / 5230 - 5323 created
on August 5, 2011. On the downside, 16316 - 16510 /
5034 - 4964 levels are likely to act as a support in the coming
trading session.
Markets are nearing strong resistance levels; therefore, we
advise traders to stay light on positions and trade with strict
stop losses.
Its Bullish FII's Vs Bearish Non-FII's. We are with FII's
Nifty spot closed at 5132.30 this week, against a close of 4888.05 last week. The Put-Call Ratio increased from 1.38 to 1.56 levels
and the annualized Cost of Carry is positive 7.14%. The Open Interest of Nifty Futures increased by 6.51%.
Put-Call Ratio Analysis Implied Volatility Analysis
PCR-OI has increased from 1.38 levels to 1.56. It is in-line with
direct correlation between market rising and so does
put-call ratio. However its important to dissect the ratio. Deep
out-of-money puts have unwound positions and near strikes of
puts have seeing writing interest. Always in calls buying has
taken place in 5200 to 5400 strikes while 4800 to 5000 have
seen writers covering their positions.
Implied Volatility (IV) has being reduced considerably from
29.97% to 22.67%. HV for BANKNIFTY is trading at 40.32%.
Liquid counters having very high Historical Volatility are
JUBLFOOD, KFA, KSOILS, MOSERBAER and SUNTV. Stocks
where HV are on lower side are BRFL, BOSCHLTD, GLAXO,
NHPC and BAJAJHLDG.
Nifty futures closed at a Premium of 11.05 points against the
Premium of 10.55 points to its spot. Next month future is trading
with premium of 28.30 points. Counters where CoC is high
are TRIVENI, CENTRALBK, POLARIS, GVKPIL and
MPHASIS. Stocks with negative CoC are ABAN,
SESAGOA, ABGSHIP, CHAMBALFERT and BANKBARODA.
Total open interest of market has increased from
`1,09,346.70 crores to `1,25,671.70/- crores. Stock futures
open interest has increased from `26,083/- crores to
`30,043/- crores. Frontline counters which added considerable
open interest are COALINDIA, BAJAJHIND, SESAGOA,
HCLTECH and MARUTI. Open interest was shed in big
names like AUROPHARMA, RANBAXY, L&T, TITAN
and BHARTIARTL.
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