Strong & Weak futures for Monday 15th FebThis is list of 10 strong futures: WWIL, Renuka, APIL, India Info, ACC, Jindal Steel, Shree Cem, Edu Comp, IDEA & Balrampur. And this is list of 10 Weak Futures: GDL, Aban, DLF, Punj Lloyd, HDIL, Yes Bank, Jindal Saw, Tulip, Omaxe & Patni Comp.Nifty is in Up Trend.Weekly Index Outlook 
Sensex (9634.7) Sensex started the week on an upbeat note with a 283-point rally, but it lost its way thereafter. All efforts to drum up an enthusiastic response to the forthcoming interim budget proved fruitless and the Sensex trudged along in an apathetic mood. This unresponsive attitude is probably good since there will then be lesser room for disappointment. FII activity was also muted. Volumes were nothing to write home about, in cash as well as the derivative segment. However, open interest moved higher past Rs 50,000 crore pointing towards revival in trading interest. High put call ratio points towards a circumspect stance being adopted by traders.
Sensex moved higher past the first target indicated last week to peak at 9725 on Tuesday. But it has been moving in a very tight range between 9300 and 9700 since then. This narrow move keeps the short-term up trend from the January 23 trough alive. Immediate resistance for the Sensex is around 9800. If this level is crossed there can be a foray in to the resistance band between 10,000 and 10,200.
The weekly Sensex close above the 50-day moving average is a positive. However, trend following indicators such as the oscillators are signalling that the index is losing momentum. The weekly momentum indicators are moving in neutral region, struggling to move in to the bullish zone. The implication is that investors need to stay watchful in the way ahead. These plodding moves of the Sensex have kept the wave counts unaltered. Sensex is forming a triangle since the last week of October and the E wave of this formation appears to be unfolding from January 23. According to this count, the current up-move faces hurdles at 9800 and then at the upper boundary of the triangle at 10,108. A close below 9000 will signal the end of this formation.
It is hard to envisage a blitzkrieg next week, given the tight range that the index is moving in currently. A rally past 9800 will take Sensex to 9976 or 10,240. Supports for the week would be at 9310 and then 9050. Short-term traders should desist from making fresh purchases on a decline below the second support.
Nifty (2948.3) Nifty recorded a peak at 2957 on Tuesday and then moved sideways in a narrow band. Key resistances for the short- term are at 2970 and then at 3030. The current up-trend could extend a little further but a cluster of resistances just ahead makes a sudden reversal quite likely in the week ahead. Breakout above 3030 will take Nifty to 3110. Conversely, inability to move past 3000 will signal impending weakness and a decline to 2870 and 2790. The medium- term outlook for the Nifty remains sideways between 2200 and 3200. Investors should desist from making fresh purchases as the index nears the upper boundary of this trading range. Key medium-term support is 2760.
Global Cues Global markets could not make any progress last week. Disappointment over the vague contours of the bank rescue package and grim economic numbers from Europe kept the lid on equity prices.
European markets were the worst affected and the DJ Euro STOXX 50 index declined 5 per cent for the week. One disconcerting point about last week's trade is the decline of Dow Jones Industrial Average below 8000. The index has closed blow this level for four consecutive sessions and a fall to the November trough at 7450 seems inevitable now.
Close above 8450 is required to mitigate the negative short-term view.
One of the strongest performers last week was Russia's RTSI Index that rose almost 20 per cent.
Shanghai Composite was the other dazzler with 7 per cent rise.
Interest appears to be re-emerging in the brow-beaten parts of the BRIC four-some. —
Maruti Suzuki 
It was a strong 8 per cent surge for Maruti Suzuki last week The stock moved close to our near-term target at Rs 636 before tottering slightly. This remains the trend-deciding level for the near-term. A downward reversal from here will pull the stock down to Rs 560 or Rs 586. Conversely, a break-out beyond Rs 636 will take the stock to Rs 673. The resistance at Rs 636 is very important from a medium-term perspective too. Penetration of this resistance would pull the stock higher to Rs 750. As we have been reiterating, the area around Rs 550 is a reliable long-term support and the stock could be building a base around this zone.
Infosys 
Infosys reversed lower from an intra week peak at Rs 1,325. Ten-day rate of change oscillator has declined in to the bearish zone after prolonged negative divergence. But the stock has supports at Rs 1,220 and Rs 1,160. Reversal from either of these levels would be the cue for short-term investors to initiate fresh long positions. Break-out above Rs 1300 will pave the way for a surge to Rs 1,460. We retain the medium-term range between Rs 1,060 and Rs 1,400 for Infosys. The stock has strong medium-term resistance between Rs 1,400 and Rs 1,500 and the medium-term view will turn positive only if this zone is surpassed.
Tata Steel 
Tata Steel recorded a minor up-tick in the weekly chart, thanks to the strong surge on Monday. But the short-term term trend deciding level of Rs 202 has not been crossed yet.
Traders ought to stay watchful over their long positions as long as the stock remains below this level. Subsequent resistances are at Rs 212 and then Rs 225. Supports for the week are at Rs 180 and then Rs 165.The medium-term trend in Tata Steel remains sideways. However, the formation of higher peaks and troughs since January 23 augurs well for the stock. Investors can make staggered purchases every time the stock nears Rs 150.
Reliance 
Reliance Industries moved in line with our expectation last week to an intra-week peak at Rs 1,414 but was unable to penetrate this level.
As explained last week, the area around Rs 1,400 is a strong resistance for the short-term. If this area is crossed, the stock can move to Rs 1,500. However, daily momentum indicators are weak and short-term traders should desist from fresh short positions on a decline below Rs 1,280.
The medium-term view for the stock is neutral. Investors ought to exercise caution since it is nearing the upper band of its medium-term range between Rs 1,000 and Rs 1,500.
SBI 
SBI launched in to a surprise up-move last week and closed with 7 per cent gain.
Immediate resistances for the stock are at Rs 1,205 and then Rs 1,245.
Short-term traders can book profit on reversal from either of these levels.
However, if the rally continues, the next target would be Rs 1,350.
Supports in the week ahead would be at Rs 1,140 and then Rs 1,100. We adhere to a neutral medium-term view for the stock.
ONGC 
The strong spurt in ONGC on Monday made the stock rise beyond Rs 700. But the stock continues to grapple with the resistance at Rs 736.
As explained in our last column, we retain a cautious outlook as long as the stock remains below this level. Supports for the week would be at Rs 636 and then Rs 615.The medium-term view for ONGC stays negative.
A strong push past Rs 750 would make this view positive.
The resistances to watch over the next three months are at Rs 800 and then Rs 866. The long-term outlook will turn positive only on a close above the second resistance.
Nifty future at critical stage After weeks of being in the losing streak, the Nifty future managed an impressive turnaround, putting in a neat 3.75 gains on the table. While a bulk of the upsurge may have been helped by the squaring-off of short positions; that the week also saw fresh accumulation of Nifty futures suggests a turnaround in market sentiments too. The Nifty future now trails Nifty, which ended at 2948 points, by about six points only. That said, trading volumes continued to remain moderate at about Rs 31000 crore.
Recommendation follow-up We had given three recommendations last week: 1) Shorting Nifty future with a stop at 2950, 2) Short straddle using 2800-strike for a maximum of two days and 3) Buying March 2500 put. All the three strategies would have ended in the negative.
Outlook The Nifty future is at critical stage. Despite strong gains on Friday, when the Nifty future crossed its crucial resistance at 2950, albeit only intra-day, we continue to feel that Nifty future will encounter strong pressure going forward. That in spite of the strong show on Friday, Nifty future failed to close above 2950-level validates our view.
However, if Nifty future manages to close above 2950 convincingly, then it may face the next resistance at around 3050 first and then at 3250. On the other hand, if it fails to hold to the current levels and dips below 2875, then Nifty future may find a strong support at 2750.
Option monitor Among the options, 2900 call and 2800 put shed open interest positions. Though 3000 call was very active, most of the accumulations were on the short side.
The Nifty 3100 call also witnessed short accumulations, indicating that Nifty could face strong pressure at higher levels. On other hand, there was significant accumulation of puts for strikes 2700, 2600 and 2500. Besides, the steady accumulation of options at Nifty March 2500 also suggests a downward bias for the market.
Volatility Index India VIX or Volatility Index, which measures the immediate expected volatility, has weakened to 43.31 from the previous week's close of 50.65. However despite the fall, the volatility index managed to touch the 50-point mark many times over during intra-day trades. This suggests that some traders may still be sceptical about the current rally.
Recommendations In the coming week, market may begin on a soft note. With expectations galore on the interim budget, the Nifty future may be subject to heightened volatility. The break-out however may set the direction for Nifty future for the ensuing weeks. Traders can consider setting a long straddle strategy. This can be initiated by buying 2900-strikes of call and puts (March), which ended last week at Rs 182.4 and Rs 142.15 respectively. While the profit in this strategy can be unlimited, the maximum loss may be limited to the premium paid. Note that this strategy can be kept open for a slightly longer period (say, more than a week). Traders with a penchant for higher risk can also consider buying Nifty March 2500 put.
FII trends The cumulative FII positions as percentage of the total gross market position on the derivative segment as on February 12 was 33.43 per cent. The FIIs indulged in alternate bouts of buying and selling in the F&O segment. They now hold index futures worth about Rs 7,363 crore (about Rs 6,815 crore) and stock future worth about Rs 12,232 crore (about Rs 11,157 crore). Their index options jumped to about Rs 15,489 crore (about Rs 12,152 crore).
FII DATA
| FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) |
| Category | Date | Buy Value | Sell Value | Net Value |
| FII | 13-Feb-2009 | 1233.91 | 1247.06 | -13.15 |
| DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) |
| Category | Date | Buy Value | Sell Value | Net Value |
| DII | 13-Feb-2009 | 774.71 | 558.34 | +216.37 |
NIFTY & SENSEX SPOT LEVELS FOR MONDAY 15TH FEB
 | 2948.35 | ( 1.91 %) | 55.30 |  |
| | 1 | 2 | 3 |
| Resistance | 2925.85 | 2958.65 | 2978.30 |
| Support | 2873.40 | 2853.75 | 2820.95 |
 | 9634.74 | ( 1.78 %) | 168.91 | |
| | 1 | 2 | 3 |
| Resistance | 9548.79 | 9631.76 | 9683.38 |
| Support | 9414.20 | 9362.58 | 9279.61 |
With the interim Budget announcement slated for Monday, the coming week promises to be high on both expectations and volatility.
The bias still appears negative regardless of the gains posted by the market in the run up to the Budget. We feel this fizz may be short-lived, unless of course the Budget announcement comes with surprise initiatives that can significantly cheer the markets up.
Given this backdrop, traders can consider setting a bear put spread for the week to benefit from any negative undertone in the market. This bear put spread can be set using Nifty February put options with strikes 3050 and 2800. You can do this by buying Nifty Feb 3050 put option (closed at Rs 139) and simultaneously selling Nifty Feb 2800 put (closed at Rs 35).
The spread will leave you with an initial debit of Rs 104 per lot, which is also the cost of setting the spread. While it is advisable to execute both the legs of the strategy simultaneously to benefit from lower margin money requirement, you can time the purchase and sale of options on Monday depending on the day's market movement.
Risk-return payoff: Essentially a low-risk and low-return strategy, this spread will deliver range-bound returns depending on the price movements of Nifty.
Maximum profit potential: The maximum profit will occur when Nifty moves below 2800. The maximum profit, however, will be limited to the difference between the two strikes minus the cost of setting the spread. In this case, the maximum profit will be Rs 146 a lot [(3050-2800) - Rs 104].
Breakeven point: The breakeven for the spread lies between the strike prices of the put options that have been transacted. In this case, it will be at 2904 points (3050 -146).
Maximum loss potential: When your spread is totally out of money i.e. when Nifty value is higher than 3050, the maximum loss that you can suffer will be limited to the money that was spent initially in setting the bear put spread i.e. Rs 104. So, in essence you will be taking a maximum risk of Rs 104 to earn a maximum profit of Rs 146 per lot.
Note that traders with a slightly less bearish view can consider setting bear put using Nifty 3050 and 2850 puts. This spread can be set for an initial debit of Rs 92 and enjoys a maximum profit potential of Rs 108. The breakeven point in this case will higher up at 2941.
When to exit? Since the maximum profit that can be earned though this strategy is limited, traders should consider booking profits and closing the positions as soon as the underlying trends below the strike price of the sold put option. On the downside, if you feel that the likelihood of the underlying moving down is low, you can consider a premature closing of positions even before it hits the maximum loss scenario.
Stock market movement seen range-bound
| Consolidating now after free fall: |
The capital market is expected to behave in a range-bound manner and the height it reached in 2008 is unlikely to be breached anytime soon, according to Mr Prince George, Managing Director and Chief Executive Officer, Doha Brokerage and Financial Services (DBFS).
In certain ways, what is now happening is consolidation of the market following the free fall. Any stimulus like rate cuts would only bring in temporary cheers as market participants, more specifically institutional investors and speculators, at this point of time were looking for opportunities to book profit with none having any clear-cut, long-term objectives, Mr George told Business Line.
He, however, said Indian economy had no fundamental issues to worry about. The global concerns have created a ripple effect in the domestic economy and the sudden decline in value in the global capital market has caused institutional investors to withdraw. India being a growing economy, such negative sentiments are bound to be there. What is needed is resilience and longer investments horizon. The Indian economy will surely bounce back ahead of the major developed and matured economies.
Policy initiatives Referring to the policy initiatives by the Centre to get over the present crisis, Mr George said the first step taken by the Reserve Bank to ease money supply should be seen as a positive step. In order to increase the credit flow, the next step needed is to cut down the repo rate and the interest rate. The process has already begun with leading banks announcing a reduction in their lending rates.
On the role of foreign institutional investors, he said that it was wrong to say that the FIIs controlled the Indian stock market, though they played an important part in the directions the market took. There is good participation from the domestic institutional investors also.
To that effect, freeing up the P-notes regulation will have a positive impact. The P-note helps the foreign individuals to enter the Indian market without revealing their identity and ensures their participation. They do not come under the SEBI definition of either FII or Sub account.
Short selling On short selling, he noted that the practice had certain negative implications, which principally came from the speculators and arbitrage position takers. Such strategy can adversely influence the market as it is mainly driven by profit-booking sentiments with no fundamental factors to support.
Short selling directly contributes to market volatility. However, the market in India is regulated responsibly within a good framework. Therefore, there is no reason to prevent short selling at this point of time, though eventually some restrictions may come.
On the stand of primary market investors in the present scenario, Mr George pointed out that India's GDP forecast was healthy at around seven per cent against the backdrop of a possible global recession. Several institutions in recent times have gone in for further reductions in GDP forecast. In an overall sense, the domestic economy will outsmart global GDP forecast by a significant margin.
With these growth expectations, well-managed corporations will certainly show steady returns and with the market valuations as they are now, it is an opportune time to increase primary investors' stake in their companies, provided they have sufficient liquidity.
Candlestick reversal patterns There are certain candlestick patterns that give an early indication that a prevalent trend has run its course and is beginning to lose strength. Dark Cloud Cover pattern (DCC) and piercing patterns belong to this class. A DCC pattern is formed with two candles. The first candle is white and the second is black, forming the 'dark cloud' that hovers ominously, threatening the prevalent up trend. Needless to add, the DCC pattern occurs near the top of an uptrend.
The second candle in the DCC pattern gaps upward and then moves down, some way within the body of the first white candle but it does not cover the first candle entirely. If it did so, it would then get labelled as a bearish engulfing candle. The extent of penetration within the body of the first candle determines the strength of the pattern. When the second candle moves more that half-way within the body of the first , it implies that a trend reversal is imminent. Dark clouds (second black candle) that move less that half-way within the first candle can turn out to be a false alarm or minor halts within an up trend.
Dark Cloud Cover pattern 
Refer the chart of Canara Bank which illustrates DCC pattern. In late September 2008, the stock encountered resistance at around Rs 230 and the uptrend was arrested with the formation of a dark cloud cover pattern. The stock reversed direction following this trend. The piercing pattern is the inverse of the DCC pattern. While the latter occurs towards the end of an up-trend, piercing patterns occur towards the end of a down trend and signal the possibility of a trend reversal from that juncture. This pattern is made up of two candles too. The first candle should be a long black candle as it would be part of the downtrend. The second candle would gap downward and then move higher well within the body of the second. Again, the extent of the penetration determines the strength of the pattern.
Piercing pattern 
Refer to the chart of Reliance Infrastructure for piercing patterns. It isevident that the stock's downtrend was arrested in early July 2008 when a piercing pattern was formed. When the stock's decline resumed two months later, another piercing pattern was formed in late October 2008 that arrested this leg of the down-move.
A penetration that exceeds 50 per cent of the first candle's body should be a more reliable signal of a trend reversal.
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