Saturday, September 19, 2009

Weekly Technical View by Tanmay G Purohit:
Nifty (4976) rose 3.03% week-on-week but shows little exhausting signs with volumes rising at fast pace and breadth deteriorating. Monsoon worries are on backburner now as the Met Dept has clarified regarding rains not being a problem. Advance Tax figures are very healthy for corporate India with 18% rise and global market rally is helping indices here travel at fast speed but F&O data suggests otherwise. Total F&O Open Interest at Rs 116,551Cr is one of the highest in many recent months and Put Call Ratio at 1.70 is alarmingly high. It is a long weekend and next week we will have just 4 sessions including F&O expiry may be a roller-coaster. The rollover is one of the lowest so far and for such a high overall OI this suggests top is near. Nifty P/e 22.41 gives a feeling the best is already priced in and the top may be near though no sign of weakness is visible yet.  Nifty has completed 46 weeks from panic lows of last October and 28 weeks from March lows, but day-wise we are approaching important turn dates where a major top might be formed. The correction never happens when we want it, but it will be sudden strike and many can get stuck at higher levels so caution is advised and a very selective approach should be adopted.

Nifty View:- Given current strength of Nifty and as shown in below daily graph, it trades in a rising wedge which indicates tiring out of the trend. But here too Nifty may overshoot and test around 5200 levels before starting a correction, the probable move is shown in graph. Going by this there is still 200-300 point upside left in Nifty to play with, but if Nifty is to break down of the wedge and cut 4700 comfortably, the up-trend may get over in my view and a healthy correction can start.

Nifty Weekly graph:-

Supp 4887/4773/4700 Res 5048/5160/5225


Last Week Recap Of Technical View:
Nifty (4829) rose on all days of the last week as it gained 3.19% week on week after it broke out above 4730-mark and touched 4889 as high of the week and new 2009-yearly high. Nifty shows no sign of weakness yet but being selective is the need of the hour as the participation is spreading fast to mid and small cap stocks but all may not be having so strong fundamentals as they show from price movement. One has to avoid euphoria and stay in only such scrips that can be long-term value buys. 
The index for industrial production expanded 6.8% from a year earlier in July, after a revised 8.2% increase in June, data from the Central Statistical Organisation showed Friday. RELINFRA being investigated about  power purchase transactions, accuracy of meters and steep increase in capex and operating expenses and the stock may remain soft on this news. HDIL premises raided by IT officials on accusations that the company earned additional income of Rs 350-400 Cr on which no tax was paid and the company has been asked to pay tax of Rs 100Cr and even after bad performance from the company, the management has seen salary increase by nearly 10times which doesn't go well on corporate governance front. 
Nifty is showing a lot of strength but all heavyweight index stocks are not showing gains, only RELIANCE moving up while other heavyweights being silent won't help in the long run and Adv/Dec ratio on weekly basis is bad, so aggressive players may wait for a dip towards 4600 to take positions. 

Supp 4768/4670/4600 Res 4908/4998/5048


1 comment:

zain khan said...

i observed many times nifty rally whole month as to digest all puts and shorts. after 4650 many traders purchase put and short niftty.