17/7/09 - Market Cues & Calls

Market Opened on higher note yesterday on strong US market session. Markets where highly volatile throughout the session. Selling pressure witnessed @ higher levels & buying seen @ lower levels. Both bulls and bears have tug of war which lead to a Flat close. Sensex closed @ 14,250 and Nifty closed @ Nifty closed at 4231 both with loss of 2 points.Metals surged yesterday due to some news on global investors participation.Optocircuit,Adlabs,Noidatoll where 10% up and LITL,STER,IDBI marginally down nearly 6 %. On Option side 4300 CE and 4000 PE added more Open Interest.Mahindra Holidays listed yesterday in NSE. L&T Q1 net surges 3.18 times; beats analysts forecast.Bajaj Auto Finance Q1 net zooms 5.05 times

INSTITUTIONAL ACTIVITY :: FII (+32.37 cr) ::: DII (-35.02 cr)

Cues ::

>>>> DOW closed @ 8711.82 (+95.61) & Nasdaq closed @ 1885.03 (+22.13) ; Europe ends in green.
>>>> Market volumes are up and here if some one look into august series vols are much lower shows lack of participation.
>>>>Nifty July future premium 3.40 converted into discount of 6.55 points so cost of carry decreased.
>>>> Nifty Open Interest Decreased to 2.48 cr indicates long unwinding.
>>>>As mentioned above 4000 PE and 4300 CE added more OI in nifty option side suggest nifty will trade flattish around these levels.
>>>>PCR (put call ratio) @ 1.03 vs 1.01
>>>> Volatility Index India VIX @ 37.39 vs 36.15 increased by 3.98% suggest instability in markets
>>>> Nifty skipping SGX nifty
>>>> US has 3 important results today (CITI,GE,IBM)

News ::

>>>>India's economic growth is expected to be slower than earlier estimated due to lower agricultural output resulting from a delayed monsoon, according to a review by a think tank.
>>>>The collapse of CIT Group Inc. seems all but inevitable, after the company said on July 15 that “there is no appreciable likelihood” that it will get additional government support to help it weather a liquidity crisis. The news sent shockwaves down Main Street. There’s a palpable fear that Washington doesn’t realize the role CIT plays in the economy, and groups, including the National Retail Federation and the International Franchise Association, have been urging the administration to keep it in business. CIT bankruptcy could trigger a cascade of as many as 300,000 small business bankruptcies. The situation led to a recent run on CIT that, in part, contributed to its liquidity crisis. Small businesses scrambled to draw down their credit lines ahead of a feared bankruptcy, pulling out more than $750 million this week alone, according to The Wall Street Journal.

Technical View ::

Nothing changed in technical side. Still MACD not crossed @ EOD charts,RSI2 @ 87.58 Overbought condition. 4187 Not neglected as we mentioned in yesterday's column.Market may move sideways until some bad news or good news comes. Bulls holding above 4230/40 will do better job. Writing option is best scenario for option traders to eat premium.A falling wedge spotted in Nifty a reversal pattern for upmove. Here I like to show two charts. One for bull and onee for bear.

the intention to post the above two charts is for saying that market is clueless positionally. So positional traders wait,watch and enter.Nifty spot support seen @ 4161. Nifty spot closing above 4305 will take bulls inside.Still I feel Intraday is safer bet in these conditions.

Levels ::

NF SUPP @ 4128 & RES @ 4322

4171 - 4207 - 4242 - 4278

Calls ::

INTRADAY ::

SELL COLPAL @ 625.75 SL 631 TGT 622 - 615 - 606

BUY TATACOMM @ 477.30 SL 471.40 TGT 482 - 485 - 490

POSITIONAL ::

BUY VISASTEEL @ 23 - 25 SL 21.55[closing basis] TGT 29 - 32