Trading Ideas - 6/04/2010 - Previous disclaimers apply !

Following is our analysis on today’s trading session

Market Overview

• Negative: Increase in open interest by 6.9% with premium of 14 points turning into discount of 3 points implies “Fresh Built-up of short position”

Option Analysis

• Call Writing: Major Call writing was observed above 5,300 levels. 5,400 added open interest of 8.7 lacs shares and 5.8 lacs shares at 5,500. Concentration and second consecutive trading session for strong writing at 5,400 indicates upside momentum to exhaust around these levels.

• Put Writing:  Strong fresh writing observed for last 2 trading sessions across the strike prices. Majority of the activity was seen at 5,300, adding 21.5 lacs shares. So, we expect markets to take strong intermediate support at 5,300 and 5,200 for April series

Implications: Upward momentum in the market to continue till 5,400 with downward to be restricted to 5,300 for intermediate time. The range for the April Series would be 5,200 at downside and 5,400 at upside.

Keeping the same in mind following are the trading ideas for tomorrow:

•                    Bank of Baroda

o   Short @ 669 for a target of 654; stop loss at 673

•                    Bharat Forge

o   Long @ 260 for a target 264; stop loss at 258

•                    Biocon

o   Short @ 303 for a target of 295; stop loss at 306

•                    Kotak Mahindra Bank

o   Long @ 766 for a target of 776; stop loss at 762

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Thanks,

Dewang K. Mehta

DENIP Consultants - www.denip.in