This is list of 10 strong futures:
Nifty is in Up Trend.
| FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| FII | 02-Apr-2009 | 2709.2 | 2017.64 | +691.56 |
| DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| DII | 02-Apr-2009 | 1507.66 | 1252.95 | +254.71 |
 | 3211.05 | ( 4.92 %) | 150.70 |  |
| 1 | 2 | 3 | ||
| Resistance | 3272.85 | 3334.65 | 3440.55 | |
| Support | 3105.15 | 2999.25 | 2937.45 | |
 | 10348.83 | ( 4.51 %) | 446.84 | | |
| 1 | 2 | 3 | |||
| Resistance | 10485.01 | 10621.19 | 10810.07 | ||
| Support | 10159.95 | 9971.07 | 9834.89 | ||
There was a vicious sell-off last Monday as GM and Chrysler edged towards bankruptcy. But with the postponement of this event, other worries on the economy, corporate and political fronts too have been swept under the carpet. A satisfactory G-20 meet has further aided the sentiment and helped market participants go in to a long weekend in a complacent state of mind. Volumes were high both in cash and derivatives, especially on days on which the stocks advanced.
Sensex declined to 9520 on Monday but the correction did not extend beyond one-trading session and the index has closed the week well above the psychological 10,000 mark. The weekly momentum indicators have moved in to the bullish zone from the neutral after a long hiatus implying that this rally can continue in the medium term. There is however no perceptible change in the monthly oscillators yet implying that the long-term outlook is still bleak.
We had outlined two possible medium-term trajectories for Sensex in our previous column. According to the first count, the index would stay in the band between 8000 and 11000 for a few more months. The second count assumed that a counter-trend rally of a larger degree is in progress since 8047 that can take the index closer to 12,000.
In other words, a close above the November 2008 peak at 10,945 is needed to signal that an intermediate term up-trend is in progress in Sensex. The minimum targets for such an up-move if we apply retracement of the down-move from January 2008 peak, are 11750 and 12900.
The short-term up-trend from the 8047 trough is still going strong but a five-wave move is drawing to a close. The targets for this move are 10314 and 10664. Since the first target has been achieved, a short-term correction can ensue soon that results in a sideways move for a few sessions. Short-term traders can therefore ride out this up-move with trailing stop losses while investors should wait for a correction to buy stocks.
Near-term targets for Sensex are 10470, 10664 and 10945. The 200-day moving average at 11392 will also be an important resistance if the rally progresses further. But a halt below the second resistance can usher in a correction to 9700 or 9000.
Immediate targets for the wave from 2539 trough are 3189 and 3287. To put it in simpler terms, one leg of the up-move from the 2539 trough could be drawing to a close. But a strong move above 3287 will imply a wave extension that makes the index can race towards 3326 or 3450. The 200-day moving average also present at 3450 will be the level that most participants will aim for on a strong move above 3287.
Supports for the week are at 2970 and 2820. Short-term traders can hold their longs as long as Nifty trades above the first support.
Tata Steel too began the week on a nervous note , declining to Rs 192. But the stock rallied thereafter to move higher towards the resistance at Rs 230.
If the stock is unable to penetrate this level, it can reverse lower and head towards Rs 200 again. This sideways move will however be construed as a consolidation that can be followed by a break-out towards our medium term target at Rs 250. A close below Rs 190 is needed to mitigate the positive short-term view.
The medium-term trend in the stock however continues to be sideways in the range between Rs 150 and Rs 250.
As explained last week, the stock needs to record a strong break-out above Rs 250 to pave the way for a rally to Rs 345 or Rs 360.
SBI 
It was a week of wild gyration for SBI. The stock plummeted below Rs 1,000 to Rs 980 before reversing sharply to close the week with a 2 per cent gain. The bullish hammer in the weekly candlestick chart coming close on the heels of the morning-star implies that buyers are eager to buy in declines. If the third leg of the move from Rs 894 trough is unfolding currently, the targets for the stock are Rs 1,220 and Rs 1,368. Investors with a medium term perspective can hold the stock as long as it sustains above Rs 1,000.
Short-term resistance exists in the zone between Rs 1,200 and Rs 1,220. Traders can book partial profit as the stock approaches this band. Supports for the week would be at Rs 1,098 and Rs 1,051.
ONGC 
It was a spectacular 8 per cent rally in ONGC last Friday that made the stock close well above the short-term resistance at Rs 820. Target of the third wave from Rs 637 trough gives us the next target at Rs 926. Fibonacci retracement of the long-term down-move gives the next target at Rs 962. In short, those holding long positions can allow their profits to run till the stock reaches the band between Rs 920 and Rs 962. A firm close below Rs 820 is required to mitigate this positive view.
Short-term trend in ONGC is also positive. The strength in weekly and monthly oscillators indicates that this is one of the first pivotals to shake off the bear market blues.
Reliance Industries
RIL moved past our first medium-term target to record an intra-week peak at Rs 1,679. Next medium-term target for this stock is around Rs 1,825. The medium-term up trend from the March 6 trough can end here since it occurs at 38.2 per cent retracement of the entire down-move from the January 2008-peak.
But if RIL gets past this level, the rally can go on to Rs 2,040. Investors should hold the stock with a stop at Rs 1,480.
The short-term trend in RIL is up and the shallow corrections since the first week of March indicate a strong bullish undercurrent.
Short-term resistances will be at Rs 1,752 and Rs 1,813. Short-term support would be at Rs 1,575 and Rs 1,497.
Maruti Suzuki 
Maruti Suzuki continued to surge ahead; moving close to our first medium-term target at Rs 850. As explained in our last column, the stock is poised just above the upper boundary of its medium-term range that is at Rs 750. The medium-term view will remain positive as long as the stock holds above Rs 750. Subsequent targets are Rs 850 and Rs 950.
The short-term view for Maruti Suzuki is also positive. The movement since March 13 resembles a running correction that occurs when the sentiment is very strong. The uptrend is well established by the strong break-out beyond the 50 and 200-day moving averages. Traders can hold their longs with a stop at Rs 750. Next support is at Rs 715.
Infosys 
Despite the wobble on Monday that made the stock decline to Rs 1,288, Infosys closed the week on a strong note with a 5 per cent weekly gain. Investors however need to tread carefully in the near-term since the stock is nearing the strong resistance zone around Rs 1,450 offered by the 200-day moving average and the November-2008 peak. Short-term traders can hold their long positions with a stop at Rs 1,340. Decline below will take the stock to Rs 1,288.
The stock is currently pausing close to the upper boundary of our medium-term range that is at Rs 1,500. A strong break above this level will give the next target at Rs 1,580 and Rs 1,650 for Infosys.
Nifty future to move in a range
If Nifty future breaches the crucial 3250 mark, its next resistance level, then it could even go on to touch 3660 level, with a mild resistance around at 3305.
After opening on a weak note last week, Nifty futures recovered sharply to end on a firm note.
It closed the week at 3222.6 points, putting in a gain of about three per cent over its previous week's close.
It also added significant amount of long open interest positions during the week, which may explain the futures sharp premium against Nifty spot, which ended at 3211.05 points.
Follow-up
We had advised traders to go short on Nifty future with a stop-loss at 3250 expecting a fall in Nifty future.
Though it began on weak note, it recovered sharply with higher trading volumes and is now inching closer to our recommended stop loss level. Traders can hold on to the short positions, as long as the Nifty future remains below 3250 on a closing basis.
Outlook
If Nifty future breaches the crucial 3250 mark, its next resistance level, then it could even go on to touch 3660 level, with a mild resistance around at 3305.
On the other hand, if it fails to move past the resistance at 3250, then it can fall back to its support at 2750.
There is also a mild support at 2900.
We expect the Nifty futures to open on a calm note in the coming week and later struggle to move past the 3250 level. Overall, the Nifty futures may remain range-bound between 2850-3250.
Option monitor
The overall optimism is so high in the market now that for the first time in many months 3600 calls witnessed active trading. Calls witnessed accumulation on the long (buy) side.
But bears appear to be still in the game as there still was active trading witnessed in 2400, 2500 and 2600 puts.
Overall, puts reported a steady accumulation in open interest, indicating that traders may be expecting the Nifty to swing wildly.
Volatility Index
India VIX or Volatility Index, which measures the immediate expected volatility, has jumped to 37.4; last week it was ruling well below the 30-point mark.
This indicates that traders may still be nervous and betting on a downward slide.
Recommendations
We suggest the following strategy.
Traders can consider setting a bear put spread strategy. This can be set by buying 3300 put, which closed last week at Rs 156.5 and selling 3000 put that closed at Rs 45.05. This strategy, also known as a vertical bear put spread, generates maximum profits, when Nifty future closes below the lower put option strike price (3000 in this case) on the expiration date.
FII trend
The cumulative FII positions as a percentage of the total gross market position on the derivative segment as on April 2 stood at 36.48 per cent. They were predominantly net buyers, particularly in index futures, in the F&O segment last week. They now hold index futures worth Rs 10,608.96 crore (Rs 9,610.5 crore) and stock futures worth Rs 14,575.64 crore (Rs 13,372.16 crore). Their index options positions were quite high at Rs 22,952.15 crore (Rs 19,024.57 crore).
Three white soldiers and three black crows
In Japanese candlesticks, there are some patterns that are called secondary signals because they do not arise as frequently as the more common bearish or bullish engulfing patterns, bullish or bearish harami patter, hanging man or hammer patterns. We deal with two such patterns in this column — three white soldiers and three black crows. These patterns can be used for confirmation of market trend and sentiment.
The three white soldiers pattern consists of three consecutive white real bodies, each with a higher close. This pattern should occur in a downtrend, signifying bullish reversal formation. Each candlestick should open within the previous real body and it should close above the previous day's closing price. Generally, upper and lower shadows are absent or small. Traders make use of this pattern to confirm a change in momentum and an alteration in the sentiment of investors from bearish to bullish. The length of the candlestick helps in reinforcing the reversal implied by the pattern. The longer the candles, the more spectacular the reversal. Secondly, higher each consecutive candle opens compared to the previous candle, stronger the chance of a sustained reversal.
The daily chart of Pantaloon Retail illustrates a three white soldiers pattern. The stock reversed it down trend in March 2007 by forming the three white soldiers pattern. The stock has been on a steady rally since then. The three black crows pattern consists of three consecutive black real bodies, each with a lower close. This pattern is a three candle bearish reversal pattern formation that occurs in an uptrend. It is the opposite of three white soldiers pattern. These black candles should open within the previous real body and it should close below the previous day's closing price.
Usually, upper and lower shadows are absent or small. Traders make use of this pattern to confirm that the uptrend has ceased and the bears have taken control. The daily chart of Parsvnath Developers shows three black crows pattern
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Arvind Parekh
+ 91 98432 32381
