DAILY REPORT FOR 21 MAY, 2008
NIFTY (5105 -53 pts)
Supp 5050/5020/4970 Res 5125/5160/5260
SENSEX (17230 -204 pts)
Supp 17080/17000/16845 Res 17360/17430/17630
Any gap-down opening at this juncture is really bearish for the Sensex and one should avoid long positions as long as the gap is not closed.
Review of the previous session:-
· Indices opened lower after Asian market weakness in the morning but realty and banking stocks saw continuous selling through the day. Nifty found some support in late trade around 5070 but that buying could not stop Sensex from losing more than 200 points.
· BSE Breadth 1431 Adv-1292 Dec NSE Breadth 644 Adv-554 Dec Upper Circuit - 228 Lower Circuit – 92
· BSE Vol Rs 5940 Cr NSE Vol Rs 13664 Cr F&O NSE Vol Rs 33290 Cr
· FIIs sold Rs 320 Cr in cash market and MFs bought 0.39 Cr. In F&O, FIIs sold Index Futures worth Rs 1326 Cr and bought Stock Futures worth Rs 260 Cr. Their Outstanding position in Futures is 42017 Cr and Options is 22103 Cr.
· Additional Data:- Gold $920.20/Oz Nymex Crude $129.07/bbl 1$ = Rs 42.64
F&O observations:-
· Bullish build-up – HDIL, CAIRN, JSW Steel, LITL, RPower, Skumar, Suzlon
· Bearish build-up – Voltas, TechMah, PFC, Nicolas Piramal, Corporation, ABB, BankNifty
· Indian Volatility Index 24.99 (+7.48%)
· OI 79286 Cr (+575 Cr) Nifty OI up 4% PCR 1.43 (previous 1.47)
· PCR declined slightly as put square-up and call build-up was seen. But Nifty futures saw some selling as OI increased and FII also sold Rs 1326 Cr of Index Futures. The PCR is still around 1.5 which means 50% more puts than calls. Still the position is in favour of bulls from that angle but we have to see if we can sustain supports around 5020-5030.
Outlook for 21 May, 2008:-
· Nifty has support at 5020 and 5050. Break below 5020 will be negative for the markets. Holding these supports will obviously be bullish but today’s strategy should be to wait and let an hour or so before deciding on any trade. It is better to remain in decent cash levels of 60-70% and make positions from the remaining part only.
· Liquidity from FIIs has been the key for the rally last year for our markets but this year there looks like a change in FII flows. From January to April this year, they have been net sellers whereas they have been net buyers in the same period for the last 6 years. They didn’t buy much last week and Dollar appreciation should not make them buy a lot either.
· CAIRN may remain bullish because of Crude Oil strength but now it seems like one should book profits in the stock. Sell when there are many buyers and buy when there are many sellers.
Results Today (21 May):- Gabriel, Gammon Infra, HDIL, Maha Scooters, Rain Commo, Sirpur Paper, Surya Roshni, Thermax
Disclaimer: These recommendations are based on the theory of technical analysis and personal observations. This does not claim for profit. I am not responsible for any losses made by traders. It is only the outlook of the market with reference to its previous performance. You are advised to take your position with your sense and judgment. I am trying to consider the fundamental validity of stocks as far as possible, but demand and supply affects it with vision variations.
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