Weekly Outlook Indian Stock Market (26 - 30 Apr)

WEEKLY TECHNICALS
High: 5331.80
Low: 5160.90
Close: 5304.10
Change: 41.50
RSI (14 Days): 62.02
Pivot: 5266
Support: 5200, 5095
Resistance: 5370, 5436

TECHNICAL CUES

• Nifty ended on pleasant note at 5,304.10 marks gaining 0.79% during the week. The Nifty April futures ended at 5,312.60 with a premium of 8.5 points. If we look at the derivatives data we can see that Nifty future prices ended in the positive territory along with incline in the cost of carry and addition of open interest, this is an indication of further long built up.
• The PCR-OI declined from 0.97% to 0.93% during the week as higher open interest build up in 5300 and 5400 strikes call.
• The Volatility Index (VIX) decreased and closed at 20.21%. Market participants should be watchful at current levels as any up move in volatility may trigger more downsides in the markets.
• FIIs were net Seller in index futures to the tune of Rs2,522.41 crore along with incline in OI by 2.25% and FII index options witnessed a further rise in OI along with a net buy of Rs 3,208 crore along with decline in PCR indicating a mixed trend.

The overall mood continues to be cautious with upward bias and the 5,350-5,380 levels for the nifty continues to be an immediate resistance. The upcoming corporate results and the future revenue guidance given by some of the major players will be the main cue for the market. Besides global market will remain a crucial pointer.

OPTION CUES
During the week, most of the open interest builds up in the range of 5,200 to 5,300 put, while, on the flip side, highest open interest was build up in 5,300 and 5400 calls respectively. 5200 strikes put and 5400 Calls witnessed writing aggressively. 5200 and 5300 strike puts added 10.26 lakh 9.80 lakh shares respectively in OI and on the Call front 5300 and 5,400 strike calls witnessed addition of 3.18 lakh and 4.24 lakh shares in OI on Friday indicating a range bound market next week.

OVERALL VIEW
Nifty is likely to remain range of 5,270-5,400 levels
Nifty toned in the week ended April 23, 2010. Though Nifty started the week with negative tone but able to manage its strength during the week and close above 5300 mark. The entire week was highly volatility and choppy. Nifty had shown see-saw movement on most of the week trading days. After making a low of 5161.75 on the very first day of week Nifty managed to recover to high of 5328.40 pumped by short covering. Next week F&O expiry is due and expecting Nifty to remain range bound in between 5270 and 5400. Nifty could touch its previous FY 09-10 high of 5399.65. Technical indicators like RSI (14) and Stochastic Oscillator are currently trading in positive territory and showing positive move for Nifty. MACD is also showing positive divergence indicating Nifty to trade with positive bias in short term. Nifty has intermediate term support at 5280 and resistance at 5380. Nifty is currently trading above 5 day EWMA and below 13 day EWMA. If Nifty mange to trade above 13 day EWMA then that could become Nifty strong support and we could see new FY 09-10 year high in next week.

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