Strong & Weak Futures for 19TH April
This is list of 10 strong futures:
Essar Oil, Gitanjali, Uni Tech, Kpit, CMC, Bajaj Hind, IVR Prime, S Kumar Syn, LITL & Mah Life.
And this is list of 10 Weak Futures:
Sterling Biotech, Glaxo, Titan Inds, Hindustan Unilvr, National Alumini, Colgate Palmoliv, Cairn India, Divi's Lab, Hind Petro, & Great Offshore.
Nifty is in Up Trend.
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 | 17-Apr-2009 | 2488.25 | 1818.4 | +669.85 |
| DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) |
| Category | Date | Buy Value | Sell Value | Net Value |
| DII | 17-Apr-2009 | 1410.38 | 1227.68 | +182.7 |
SPOT LEVELS for 19TH April
 | 3384.40 | ( 0.44 %) | 14.90 |  |
| | 1 | 2 | 3 |
| Resistance | 3463.08 | 3541.77 | 3593.68 |
| Support | 3332.48 | 3280.57 | 3201.88 |
 | 11023.09 | ( 0.69 %) | 75.69 | |
| | 1 | 2 | 3 |
| Resistance | 11259.62 | 11496.16 | 11652.84 |
| Support | 10866.40 | 10709.72 | 10473.18 |
Weekly Index Outlook 
Sensex (11023.1)
Indian stock market juggernaut rolled on to a sixth consecutive positive weekly close. Neither disturbing guidance from Infosys nor the cacophony of the Lok Sabha elections deterred its progress.
It promises to be an action-packed week ahead with the monetary policy review, corporate earnings and IPL matches vying for investors' attention.
Though the large-cap stocks appeared a trifle hesitant in last week's trade; stellar moves made by mid and small cap stocks ensured that investors had nothing to complain about. Volumes soared through the roof. Average volume in NSE cash segment was Rs 18700 crore last week.
Volumes in NSE derivative segment averaged Rs 75000 crore in the last three sessions. Last time such volumes were witnessed was in the last quarter of 2007.
Open interest has leapt to Rs 86000 crore, implying that leveraged trading is back in vogue. FIIs doggedly remained net buyers, even on days when the markets corrected; taking their tally of net inflows for April to $730 billion.
Oscillators in the daily chart are still featuring in the overbought region. But such indicators become ineffective in strong trending market where they can stay overbought for considerable length of time. Weekly oscillators are beginning to move in to bullish region.
However, the index is currently grappling with the strong resistance offered by the 200-day moving average. High volumes witnessed over the last three sessions too suggest that the bulls and bears are battling it out for supremacy around the long-term moving average.
It needs to be borne in mind that since this is a long-term indicator, we need to wait for the index to sustain above this line for at least a couple of weeks before we can conclude that the long-term trend has reversed.
Immediate targets for the move from 8047 low are 11305 and 11600. Sensex achieved the first target and is whipsawing violently since then.
Investors ought to be cautious if the index continues to struggle to move beyond 11300, since that would imply that a terminal corrective is being formed that can be followed by a decline to 10000 or even 9500. Rally above 11600 will take the Sensex to the next resistance zone around 11800.
The short as well as medium term trend is currently up and prudence dictates that it is best to flow with the trend till we get confirmation that the trend has reversed. Supports for the week ahead are 10650 and 10230. Short-term investors can buy in declines as long as the first support holds. Upper targets for the week would be 11367, 11640 and 11820.
Nifty (3384.4)
Nifty made an attempt to climb above 3500 before a mild correction set in. It is difficult to determine if the movement over the last three sessions is a terminal corrective or a running correction. According to both the counts, sharp moves can be expected in the week ahead. As explained before, if the move from the 2539 low is the B wave of a long-term bear market, its first targets would lie in the zone between 3480 and 3680.
Since Nifty is already at this zone, it would do to stay extra vigilant.
The short-term trend however continues to be up and traders can buy in declines as long as the index holds above 3300. A firm close below 3100 is needed to indicate that the medium-term trend is reversing lower. Upper targets for the week are 3550 and 3684.
Global Cues
Equities put up a strong show last week. Stock markets in Brazil and Argentina continued their uptrend and made fresh highs for 2009, European markets too rallied strongly. DJ Euro STOXX 50 closed 4 per cent higher last week. Jakarta Composite Index was the out-performer with11 per cent weekly gain.
Action on the Dow was however muted, the index closed with less than 1 per cent gain. It is yet to gather sufficient momentum to break above the resistance at 8100. As explained before target above this level is 8800 and 9100. —
ONGC
ONGC moved in line with our expectation, reversing downward from the resistance at Rs 920. The zone around Rs 920 is a key medium-term resistance and a sharp reversal from here can result in the stock moving in a range between Rs 600 and Rs 900 for a few more months. Therefore investors should wait for a weekly close above Rs 920 or for decline below Rs 800 to buy this stock. The 50 and 200-day moving averages will provide support in declines.
Short term trend in ONGC is down and immediate supports for the stock are Rs 835 and Rs 816. Immediate resistances are Rs 894 and Rs 922. Traders can initiate fresh short positions on a failure to move above the first resistance. –
SBI 
SBI shattered the resistance in the band between Rs 1200 and Rs 1220 and almost achieved our break-out target of Rs 1368. It was one of the stronger performers among the pivotals, with 15 per cent weekly gain. Short-term support for the stock is at Rs 1250 and Rs 1180. Short-term traders can hold the stock as long as it holds above the first support. But it faces strong resistance from the band between Rs 1350 and Rs 1370.
The medium-term view for SBI has however turned positive after last week's move. If this is a counter-trend rally correcting the down-move from January 2008 peak, the first target is Rs 1356 and the next target is Rs 1476. Fresh longs are advised only on a strong move above Rs 1350.
Maruti Suzuki
Maruti Suzuki continued its upward march and achieved our first medium-term target of Rs 850 last week. Though a mild reaction was witnessed on Friday, the short-term trend in the stock continues to be up.
Short-term supports for the stock are Rs 810 and Rs 770. Short-term traders can hold their long positions until the stock trades above the first support. Medium-term investors can hold with a deeper stop at Rs 740.
Next medium-term target for Maruti Suzuki is Rs 950 that is 61.8 per cent retracement of the long-term down trend from the October 2007 peak. A close above this level would imply that the stock can head towards its life-time high peak once again.
Tata Steel
Tata Steel rallied strongly in the first two sessions to record a peak at Rs 297 and moved sideways thereafter. Short-term supports for the stock are Rs 250 and Rs 233. Short-term traders can buy in declines above the first support. The stock can then take a shy at the 200-day moving average at Rs 335 and beyond that at Rs 360. However a close below Rs 250 would be a psychological victory from the bears and usher in a medium term correction to Rs 240 and Rs 207.
The medium-term trend is currently up though the stock is appearing stretched on the daily charts. The magnitude of the correction should be closely watched to understand the medium term direction in the stock.
Infosys
It was a volatile week for Infosys as the stock plunged to Rs 1300 following earnings announcement and then rebounded to close the week with less than 3 per cent loss. As we have explained earlier, there is a strong medium-term resistance between Rs 1400 and Rs 1450 since the 200-day moving average is poised here and it is also the upper boundary of our medium-term trading range. A reversal from here can pull Infosys lower towards Rs 1100 over the medium term.
The stock can continue to face resistance at Rs 1450 over the near-term. If it reverses lower from current levels, a decline to Rs 1300 and Rs 1256 would be on the cards. Target on a break above Rs 1450 is Rs 1492.
Reliance
RIL rallied slightly above our medium-term target of Rs 1825 but it turned hesitant at those levels.
The shooting star pattern in the weekly candlestick chart too denotes that the stock is experiencing selling pressure in the band between Rs 1800 and Rs 1850. Since this is 38.2 per cent retracement of the downtrend from the January 2008 peak, the current rally can halt here. Medium-term investors can hold the stock as long as it trades above Rs 1500.
Immediate support will be provided by the 200-day moving average positioned at Rs 1600. Short-term investors can book some profits at current levels. Short-term resistances are Rs 1844 and Rs 1920.
Crucial week on the cards for Nifty future
The coming week appears to be crucial for Nifty future. Despite the many attempts to scale higher levels, the Nifty future failed to move above 3515.
After opening a promising opening last week, the Nifty future struggled at higher levels. It closed at 3381.3 points, at a marginal gain of 0.7 per cent over its previous week's close. Nifty April futures, which closed last week at a premium of 13 points closed at a discount this time around. Open interest also declined to 4.09 crore shares, suggesting that there may have been profit booking at higher levels.
Follow-up
We had advised traders the following two strategies: 1) Considering long on Nifty future with a stop loss at 3250; and 2) buying 3300 put. Both the strategies provided handsome profit opportunities over the week.
Outlook
The coming week appears to be crucial for Nifty future. Despite the many attempts to scale higher levels, the Nifty future failed to move above 3515. If it manages to breach this level in the coming week, then it may have the next resistance at 3660. On the other hand, if it fails to sustain at current levels, it will find an immediate support at 3250 and then at 2800 levels.
Option monitor
As far as Nifty call options are concerned, the bulk of activity appeared to be centered on the strikes 3300-3900. The wee also saw 3500 and 3700 strikes in the May series enter the active zone. On the other hand, puts between 2700 and 3500 strikes were in the active zone. Among May contracts, 3200 put was the most active. Puts saw steady accumulation on the long side while calls saw writing activity, indicating traders are expecting a sharp fall in the Nifty.
Volatility Index
Volatility index continues to give out cautious signals. The index, which measures the immediate expected volatility of Nifty future, has been adding value quite consistently. It closed above 50-point mark at 50.8 against the previous week close of 43.54. It is worth noting that on previous occasions whenever India VIX, the fear gauge as popularly christened climbed to about the 50-point mark, the Nifty future had tumbled sharply.
Recommendations
Traders can consider the following two strategies.
1) Go short on Nifty future if it dips below 3325. In that event, the stop loss could be at 3515. This strategy however may be best suited only for traders with a higher penchant for risk. Traders can book profits at 3250 and 2800 levels depending on their individual risk profile.
2) Buy 3300 put, which closed on Friday at 70.
Stock futures
HDIL (129.2)
Traders can consider going short on HDIL futures. The stock may find resistance at 150 and support at 120. Any dip below 120 could weaken it to 105 and then to 82. On the other hand, if it breaches the resistance zone, it can move up to 180. This strategy again may be best suited only for traders with a higher appetite for risk.
FII trend
The cumulative FII positions as percentage of the total gross market position on the derivative segment as on April 16 stood at 35.10 per cent. While they were net buyers in index futures, FIIs offloaded stock futures. They now hold index futures worth Rs 12,743.48 crore (Rs 12,540.03 crore) and stock futures Rs 16,370.08 crore (Rs 15,872.01 crore).Their exposure to index options was quite high at Rs 27,150.9 crore (Rs 26,308.55 crore).
--
Arvind Parekh
+ 91 98432 32381
