Monday, March 22, 2010

Market outlook for 23/03/10

The domestic market today closed on a pessimistic note on heavy selling pressure across the sectoral indices following the unexpected hike in the key interest rate by RBI last week. The selling interest also emerged in the final hour as the investors remained cautious ahead of the expiry of equity derivative contracts on Thursday, 25th March, 2010. The benchmark indices opened today's session with sharply lower on the back of the unexpected hike in key interest rates by RBI. The market remained volatile tracking negative cues from global markets and continued to move southwards. However, the market at the mid session marked its day's high but cannot sustain to grow further and fell down as fresh selling pressure emerged at this level. In U.S the markets closed lower on concerns over Greece's debt problems ahead of a euro zone summit. Going ahead, the market continued its negative run and closed the session with negative note.
Nifty closed the day at 5205.20 down by 57.6 points. Nifty February Future closed at 5207, premium of 1.8 points.
  • FII bought in Cash (Net buy 302.78 Crore)
  • FII sold in index futures and stock futures but bought in index options (Net sold 350.95 Crore)
  • US market ended flat to Positive.
  • Global cues are flat to Positive.
  • SGX nifty is Positive as of now.
  • Most Active March Nifty Call Option: 5300 and 5200.
  • Most Active March Nifty Put Options: 5200 and 5300.
Over all view
As said in previous edition about weakness in Nifty and exactly yesterday we saw supply at higher level. Nifty daily chart has formed “Black Opening Marubozu” a bearish candlestick pattern; suggest weakness is likely to continue in coming trading days. Daily RSI and Stochastic has given negative crossover to signal line from over bought zone. MACDh is giving sell signal. Weekly RSI has also started showing some sign of weakness after sending tired out signal in last week. Short term trend reversal resistance placed at 5310 and support placed at 5070 levels, in between is the range, provides uncertainty over trend.

NIFTY Technical
Current Spot: 5205.20
Pivot: 5211
3DEMA: 5224
7DEMA: 5201
20DEMA: 5106
RSI (7 days): 64.48
Supports: 5184 - 5224
Resistance: 5276 - 5290

Option Open Interest

Target Nifty
Buy Nifty above 5222 - 5253 - 5295 - 5333 SL - 5211
Sell Nifty below 5205 - 5178 - 5140 - 5098 SL - 5221

Option & Futures Call
Buy Nifty 5200CE at 48.5 for targets of 61.6, 84.2, 95.5, SL of 44.9
Buy Nifty 5200PE at 27.6 for targets of 36.6, 45.6, 56.4, SL of 24.9

Swing Trade
Punj Lloyd (176.65)
From early February stock has formed multiple bottom at 170 and shown bounce back there on. Yesterday stock has formed “Long White Candle" a bullish candlestick pattern with strong volume breakout on daily chart. Daily RSI and Stochastic has given positive crossover to signal. Weekly RSI also sensing strength in stock. Looking at all above implications traders with moderate risk appetite can consider Buy above 178 with tight stop loss of 173 for a Target of 189.

Stock Ideas for the Day
Reliance Industries: Buy above 1084 for targets of 1092, 1113, 1129 SL of 1076
Reliance Industries: Sell below 1069 for targets of 1060, 1044, 1023 SL of 1060
Varun Ind Ltd.: Buy above 175 for targets of 184, 194 SL of 171.5
Hotel Leela: Buy above 47 for targets of 48, 49.5 SL of 46
India Hotel: Buy above 100 for targets of 102, 105 SL of 98

Positional Call
Lanco Ltd.: Buy above 61.3 for targets of 66 SL of 60 (One Month)
Bata Ind: Buy above 240 for targets of 252 SL of 236 (One Week)
Keep it simple and remember what you set out to do. - Charlie Munger

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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