Sunday, March 21, 2010

Market outlook for 22/03/10

The domestic market ended the session on a marginally higher note tracking cues from the global market. Asian stocks rose for a sixth straight week on Friday, their longest string of weekly gains since a global bull market began a year ago. On the other hand the European market which was expected to open on a positive note, following the gains in US and Asian Market didn't fail the expectation and opened in the green zone. Following this, smart pull back was witnessed in the final hours of the session. Back home the market remained volatile for most of the session as investors rollover positions in derivatives segment from the March 2010 series to the April 2010 series ahead of the expiry of the near-month March 2010 derivatives contracts on Thursday, 25 March 2010.
Nifty closed the day at 5262.80 up by 16.9 points. Nifty February Future closed at 5269.60, premium of 6.8 points.
  • FII bought in index options and cash but sold in index futures and stock futures (Net buy 623.9 Crore)
  • US market ended Red.
  • Global cues are flat to Negative.
  • SGX nifty is in Deep Red as of now.
  • Most Active March Nifty Call Option: 5300 and 5200.
  • Most Active March Nifty Put Options: 5200 and 5300.
Over all view
RBI raises interest rates by 25 bps
The Reserve Bank of India (RBI) on Friday raised its short-term borrowing and lending rates by 25 basis points each and said the measure was intended to anchor inflationary expectations and check price pressures.
  • Reverse repo rate raised by 25 basis points to 3.5 percent
  • Repo rate raised by 25 basis points to 5.0 percent
  • Measures to anchor inflationary expectations
  • Food prices remain at elevated levels
  • Central bank to monitor macro-economic conditions, prices
Last week Nifty has formed “Bearish Advance Block Pattern” candles consist from 15 March to 17 March and finally Nifty appeared in overbought zone first time after 1 October 2009. Advance block pattern suggest that market is tired and some sign of selling or supply at higher level cannot be ruled out. Daily momentum indicators are hovering in over bought zone. On weekly chart front, from last six week Nifty is making higher highs higher lows but weekly moving average sends tired out signal. Immediate resistance placed at 5310 level and short term important support placed at 5070 level.

NIFTY Technical
Current Spot: 5262.80
Pivot: 5256.62
3DEMA: 5242
7DEMA: 5199
20DEMA: 5096
RSI (7 days): 87.88
Supports: 5243 - 5224
Resistance: 5276 - 5290

Option Open Interest

Target Nifty
Buy Nifty above 5279 - 5286 - 5299 - 5320 SL - 5266
Sell Nifty below 5260 - 5251 - 5237 - 5223 SL - 5271

Option & Futures Call
Buy Nifty 5300PE at 50.6 for targets of 59.8, 74.1, 83.4, SL of 44.9
Sell HDFC Futures at 2691 for target of 2662, 2630, SL of 2718

Swing Trade

Chambal Fertiliser (61.10)
Stock was in continuous down trend from the high of 74 in mid February and finally made a bottom on 16 March with “Bullish Engulf” a bullish candlestick pattern. On Friday stock has formed “Long White Candle” with strong volume breakout on daily chart. 3 days EMA has given positive crossover to 8 days EMA. Daily momentum indicators are on the verge of bullish zone. On weekly chart front stock has formed “Piercing Pattern” a bullish candlestick pattern, weekly RSI also showing strength on chart. Looking at all above technical evidence trader with moderate risk appetite can consider Buy above Rs.61.25 with tight stop loss of Rs.58.50 (closing basis) for a Target of Rs.66.

Stock Ideas for the Day
Reliance Industries: Buy above 1095 for targets of 1100, 1110, 1121 SL of 1084
Reliance Industries: Sell below 1081 for targets of 1072, 1063, 1052 SL of 1089
Tata Elaxi: Buy above 312 for targets of 319, 326 SL of 304
Raymonds: Buy above 236 for targets of 241, 248 SL of 228

Positional Call
Kopran Ltd.: Buy above 27.8 for targets of 30.5 SL of 27.2 (One Month)
MM Forgings: Buy above 64.4 for targets of 67.5 SL of 63.1 (One Week)

In any contest between power and patience, bet on patience - W.B. Prescott.

Use strict STOP LOSS in each and every trade in this kind of volatile market and Trade at your own risk.

Thanks and Regards

S&P Wealth Creators

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