Market Analysis & Trading Call Updates - 7/4/2010

Market Overview

•                    Limited downward basis with upside momentum continuing till 5,460. If the market close above 5,400 with volume, it may reach to 5,460.

Implications: Premium increased from 1 point to 6 points on Nifty spot to Nifty future, increased in open interest and Put writing across strike prices indicates “Fresh Built-up of Long Positions”  

Option Analysis

•                    Call Writing: Fresh writing at higher levels and shedding at lower levels indicates current momentum to continue. Marginal addition of more than 2 lacs shares at 5500CE. However, we still expect market upside capped at 5460 on account of concentration and weak PCR at 5400 level.

•                    Put Writing: Fresh writing witnessed across strike prices with majority at 5300PE to the tune of 10.74 lacs shares and 5.4 lacs shares at 5400PE. So, we expect markets to bottom at 5,300 for intermediate time span and 5,200 for April series

Implications:

Current trend of upside momentum may continue till 5,460 with first intermediate resistance at 5,400. However, downside capped at 5,300 for intermediate time and 5,200 for April series. The range for the April Series to settled between 5,200 and 5,400.

FIIs and DIIs activity in capital market segment

•                    FIIs were net buyers of Rs 338.8 crore with Gross buyers of Rs 3,415.45 crore and Gross Sellers of Rs 3,076.7 crore.

•                    DIIs were net sellers of Rs 23.4 crore with Gross buyers of Rs 1,412.7 crore and Gross sellers of Rs 1,436.1 crore.

Trading Ideas Update

·         Nifty – High Risk trade

o   Short at 5366 with a target of 5330 and a stop loss of 5375

1.       Day open at 5380, then a low of 5343 before finally closing at 5381 (premium of 6 points over Spot Nifty @ 5375)

·         DLF -  Accumulate between 327 & 318 for a target of 340

o   Stop loss at 315; time frame 3 days

o   Makes a day high of 335 before closing at 331

·         Indiabulls

o   Long at 115 for a target of 117; stop loss at 113

o   Day high of 123.6 completing our target of 117

·         Kotak Mahindra bank

o   Long at 781 for a target of 792; stop loss at 775

o   Day high of 796.75 completing our target of 792