This is list of 10 strong futures:
Nifty is in Up Trend.
The mood towards the end of last week was the exact reverse of that prevailing at the end of the Budget week. While the Sensex was threatening to breakdown in to a major down-move then, it appears to be on the verge of another strong up-move now. Volumes were extremely low in the first two sessions but it perked up towards the end of the week as stock prices continued to move higher.
Institutional investors, both domestic and foreign were net buyers through last week.
The reversal last week has resulted in a strong piercing pattern in the weekly candlestick chart of Sensex. This surge has also helped the index close above the 50 and 21-day moving averages. These are signals that that the recovery could continue. However, the daily oscillators are still trading in the neutral zone.
The 10-day rate of change oscillator is in the negative zone just below the zero line, while the 14-day relative strength is at 58.
These readings imply that last week's surge has negated the bearish implications of the post-Budget decline but this short-term up-move has to progress a little more to instil confidence about its sustainability.
Weekly oscillators have also not turned unduly bullish though they continue in the bullish zone.
When Sensex recorded the low of 13,219 last week, it retraced 31.5 per cent of the rally from 8,047.
The correction from 15,600 peak also consumed one-third of the time taken by the rally from 8,047 to 15,600. This meets the minimum retracement requirement for the correction both in terms of magnitude as well as time. In other words, the correction from 15,600 could have ended at 13,219.
The question that arises now is what will be the medium term trajectory for the Sensex from here? As is usually the case when indices are in a range, we are faced with multiple counts.
It would be best to see the movement over the coming week to decide on the right count. These are few of the likely trajectories,
Strong move past 15,000 would take the index to the resistance zone between 15,600 and 15,800. Reversal from this zone will result in a range-bound move between 13,000 and 15,800 for a few more months.
Break-out above 15,800 would take Sensex to 16,200 or beyond.
Failure to move beyond 15,000 early next week will bring the bears out of their lairs and they would drag the index down to 13,300 or 12,730. This would imply that the correction would have legs.
The preferred view is the first one of a range-bound move over the next few weeks that continues to give traders a torrid time as the monsoon uncertainty and earnings season plays out.
Sensex is poised close to the key short-term resistance zone between 14,600 and 15,000. A reversal from here can take the index down to 13,830 or 13,200 over the short-term. A strong close above 15,000 will give the next target of 15,440 and 15,600 to the Sensex.
Nifty declined to the low of 3,918 before rebounding to the peak of 4,390. The index is testing the key short-term resistance at 4,390. A strong close above this level will take the index to 4,592 or 4,693 over the short-term.
But reversal on Monday will result in a decline to 4,100 or 3,920 once again.
Nifty has also retraced 36 per cent of the up-move from the March lows when it recorded the trough of 3,918 last week. Resumption of the intermediate-term uptrend will, however, be confirmed only on a close beyond 4,693 that will give the next medium-term targets of 4,741 and 5,100.
But a reversal from 4,693 will result in a sideways move between 3,900 and 4,700 for a few more months.
Asian indices were largely subdued last week. But since the correction over June had been relatively shallow in many Asian indices, some such as Jakarta Composite, Straits Times Index and KLSE Composite Index recorded new 2009 highs last week.
It was however the spectacular 7 per cent rally in the Dow that set the tone for the rest of the indices to follow.
The losses recorded in the last three weeks were wiped out in just one week indicating a strong bullish undercurrent in the market. This index completed 33 per cent retracement of the up-move from the March lows when it recorded the intra-week low of 8,087 on Monday.
That meets the minimum retracement criteria from the second leg. If the third leg of the move from March took off last week, it will have the minimum target of 9,575. But another pause around 8,878 will result in the index fluctuating in a range between 8,000 and 9,000 for a few more months.
It also needs to be watched if the Dow holds above the zone between 8,300 and 8,500 where the 21, 50 and 200 day moving averages are currently forming a compression. Corresponding upper target for the third leg in S&P 500 is 1,045.
Reliance (Rs 1,933.4) 
RIL reversed from the low of Rs 1,718 to move to the short-term resistance at Rs 1,970 indicated last week. The stock is in a medium-term down-trend since May 19 and will face strong resistance at Rs 2,018 and Rs 2,200 in its quest to reverse this trend. The 50-day moving average at Rs 2,070 is also a resistance that short-term traders need to watch out for.
The short-term trend in RIL is however up. The stock is currently halting just below its key short-term resistance at Rs 1,960. If this level is crossed, the stock can rally to Rs 2,020 or Rs 2,070 over the short-term. Fresh long positions are advised only on a close above Rs 1,960. Short-term supports for the stock would be at Rs 1,875 and Rs 1,815.
State Bank of India (Rs 1,674.6) 
SBI moved in line with our expectation, reversing from the support at Rs 1,500 to move towards the second target at Rs 1,690. We stay with the view that Rs 1690 is a key trend-deciding level for this stock. A downward reversal from here can pull SBI lower to Rs 1,419 or Rs 1,300 while strong close above this level will mean that the up-trend from the March low of Rs 894 can resume to take the stock higher to Rs 1,900 again.
Short-term traders can hold the stock with a stop at Rs 1,570. Move above Rs 1,690 will take the stock to Rs 1,730 or Rs 1,780 in the near-term.
Tata Steel (Rs 392.7) 
Tata Steel too recorded strong gains in the last four sessions that helped it close well above its 200-day moving average at Rs 350. The stock completed 47 per cent retracement of the up-move from the March low when it formed the low of Rs 330 on Monday. It is, however, too soon to judge if the correction is complete. Strong close beyond Rs 435 is required to signal the resumption of the intermediate up trend.
The ongoing short-term up-trend will face resistance at Rs 396 and Rs 435. Fresh long positions are advised only if the stock closes above Rs 396 on Monday.
Infosys (Rs 1,867) 
It was a strong 8 per cent rally in Infosys last week that disproved our assumption of a medium term reversal in the stock. Close above the previous peak at Rs 1,854 implies that the stock can now move higher to the intermediate term resistance zone between Rs 1,900 and Rs 2,000. Short-term investors can hold the stock with a stop at Rs 1,785. Next short-term support is at Rs 1,728.
The medium-term trend will stay positive as long as Infosys trades above Rs 1,700.
ONGC (Rs 1,041.5)
ONGC reversed from the support at Rs 980 and is currently in a short-term uptrend. As explained last week, if this support holds, it would imply strength from a medium-term perspective with a possible move higher to Rs 1,200 or to the former peak at Rs 1,386 over the medium-term. Medium-term investors can hold the stock with a stop at Rs 960.
It closed at 4,381.5 against the previous week's close of 3,993.2, posting a 9.7 per cent weekly gain.
In the process, the future also moved into premium over the spot that ended Friday at 4,374.95 points. Importantly, the strong rally this time around was backed by high trading volumes. That said, a good part of the gains came on the back of a fall in open interest; as against an open interest of 2.25 crore shares last week, it was lower at 2.14 crore shares the current week.
As the market moved against our position, and also a bit too soon at that, these strategies may have backfired terribly.
The immediate support level appears at 4,065.
A move below this level could weaken the Nifty future to 3,650, the chances for which appears rather bleak now.
In between 3,850 could also act as a minor support level if Nifty future breaks 4,065 level.
As the Nifty future had a sharp run-up last week, we expect it to move sideways in the coming week.
Among the puts, the highest number of accumulation happened at 4,000-strike (71.14 lakh shares) and 3,800-strike (54.44 lakh shares), indicating that these could act as a strong support level for Nifty future.
In comparison, calls shed open interest, indicating that writers may have scampered for cover as the Nifty scaled gains.
1) Consider going long on Nifty future keeping the stop-loss at 4,065. The stop-loss has been given lower intentionally as the Nifty may also see sharp volatility during the week. If the Nifty future opens on a strong note, traders may have to adjust the stop-loss suitably so as to protect profit. Exit can be made at 4,550, 4,635 and at 4,800 levels.
2) Traders can also consider a short straddle strategy using 4,400-strike. The maximum profit in this strategy is limited to the amount of premium collected by writing the options. The premium of Nifty 4,400 call closed at Rs 92 while that of put stood at Rs 112. The short straddle, however, is a risky strategy since it involves writing options.
| FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| FII | 17-Jul-2009 | 2786.83 | 2644.68 | +142.15 |
| DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| DII | 17-Jul-2009 | 1709.76 | 1174.4 | +535.36 |
 | 4374.95 | ( 3.39 %) | 143.55 |  |
| 1 | 2 | 3 | ||
| Resistance | 4433.52 | 4492.08 | 4593.77 | |
| Support | 4273.27 | 4171.58 | 4113.02 | |
 | 14744.92 | ( 3.47 %) | 494.67 | | |
| 1 | 2 | 3 | |||
| Resistance | 14921.89 | 15098.85 | 15397.01 | ||
| Support | 14446.77 | 14148.61 | 13971.65 | ||
"We are just making our beginning. We have kept our options open for raising funds and will evaluate them as we go along," he said in a conference call from New York.
"This will include $325 million through equity placement, $150 million through Disney and the remaining through debt financing from a syndication of banks," said Mr Ambani.
As part of the deal, DreamWorks will make five-six films a year for global audiences with the first to begin production this year.
Walt Disney will handle the marketing and distribution of the studio's films globally, while Reliance BIG Entertainment will be the India distributor.
Mr Amitabh Jhunjhunwala, Mr Steven Spielberg and Ms Stacey Snider will also be part of the Reliance ADAG board.
"Considering the business situation, this is one of the largest outlays in film production in recent times. Revenues from Indian films account for only one per cent of the US market and this will change," said Mr Ambani.
Mr Spielberg, who has produced and directed movies like Jurassic Park and ET , said, "Initially, the new venture will focus on commercial and action movies before experimenting with art films."
It had acquired a whole lot of projects from Paramount during the separation. An announcement of the initial films to go before cameras will be made at a later date, said Mr Spielberg.
This is not Mr Ambani's sole venture in Hollywood.
BIG Pictures, owned by Reliance BIG Entertainment, plans to produce movies with Nicolas Cage's Saturn Productions, Jim Carrey's JC 23 Entertainment, George Clooney's Smokehouse Productions, Chris Columbus' 1492 Pictures, Tom Hank's Playtone Productions, Brad Pitt's Plan B Entertainment, Jay Roach's Everyman Pictures, Brett Ratner's Rat Entertainment and Julia Roberts' Red Om Films.
MACD = EMA (12) of price - EMA (26) of price
A signal line or trigger line is plotted on the MACD chart to give buy and sell signals. This signal line is formed by smoothing MACD with another exponential moving average line. The standard period for signal line is nine days.
Signal = EMA (9) of MACD. The MACD and its signal lines fluctuates above and below a zero line, that is from the positive to the negative territory, similar to the price rate of change (ROC) indicator.
The daily chart of Andhra Bank illustrates moving average convergence and divergence oscillator that is plotted below the price. In the MACD plot, the thick red line is the MACD line and red dotted line is the signal line. When the MACD line rises above the signal line, the indicator provides a bullish signal, which implies that the price of the stock is on the verge of experiencing an upward momentum. In June 2008, November 2008 and March 2009, MACD indicator in Andhra bank signalled buy. On the other hand, the MACD declining below the signal line that is a negative signal, which indicates that it is time to take profit or to initiate sell. In May 2008, September 2008 and January 2009 the MACD signalled sell. It would be prudent to wait for an established cross above the signal line before initiating a position.
Arvind Parekh
+ 91 98432 32381
