Market outlook for 05/04/10

The key benchmark indices closed the session on an upbeat note on the first day of the financial year 2010-11 backed by heavy support across the sectoral indices. The market opened high on back of positive Asian market which opened higher on the back of rising commodity prices and cheering economic data from Japan and China. On the other hand the European market also opened on high note and was seen hitting fresh 18-month highs as upbeat manufacturing data from Europe and China fuelled optimism about the global economic recovery. Back home the market breadth was strong on back of firm global market which boosted the investor's sentiments and made the market rise for most of the day. Buying interest emerged across the counters with IT stocks leading the sectoral indices followed by CD, Metal and CG. While Auto and FMCG were the only two stocks which ended on the negative note.
Nifty closed the day at 5290.50 up by 41.40 points. Nifty April future closed at 5307.8, premium of 16.3 points.

• FII bought in Cash (Net buy 106.4 Crore)
• FII bought in index options and index futures but sold in stock futures (Net buy 1051.59 Crore)
• DII bought in Cash (Net buy 452.33 Crore)
• US market ended in Green.
• Global cues are flat to Positive.
• SGX nifty is Positive as of now.
• Most Active April Nifty Call Option: 5400 and 5300.
• Most Active March Nifty Put Options: 5200 and 5300.
• Put Call ratio stands at 1.19
• Advance Decline for the day was 1068:242

Over all view
Nifty managed to claw back 40 points as anticipated on very good breadth, but on low volumes. Half hourly charts have given a breakout from the falling wedge and the falling channel too which appeared after redrawing the upper trend line. Oscillators too have started showing strength once again. A test of the recent top of 5330 is possible due to improving technical’s in the very short term. Breadth improved considerably on the last trading day. Crossing 5330 could lead to further upside.
Daily, weekly and monthly oscillators continue to show negative divergence. Quarterly charts show stochastic having reached overbought levels. Volumes are falling on all time frames. Breadth too has been on the decline. All this points to remaining cautious on longs, Stop loss should be a close below 5187.

NIFTY Technical
Current Spot: 5290.50
Pivot: 5285
3DEMA: 5276
7DEMA: 5263
20DEMA: 5189
RSI (7 days): 67.2
Supports: 5272 - 5253
Resistance: 5304 - 5317

Target Nifty
Buy Nifty above 5311 - 5323 - 5342 - 5367 SL - 5298
Sell Nifty below 5293 - 5285 - 5260 - 5241 SL - 5304

Option Open Interest

On Thursday there was a huge Open Interest buildup in 5200PE and 5400CE April Strike price indicating that Option writers are playing for 5200 – 5400 range for time being.

Option & Futures Call
Buy Nifty 5200PE above 62.2 for targets of 71.8, 88.1 SL – 58.1
Buy Nifty 5300CE above 96.2 for targets of 101.8, 108.1 SL - 91.8

Stock Ideas for the Day
Reliance Industries: Buy above 1095 for targets of 1099, 1108, 1120 SL of 1086
Reliance Industries: Sell below 1084 for targets of 1079, 1070, 1061 SL of 1092
MindTree: Buy above 590 for targets of 598, 614 SL of 580
Punj Lloyd: Buy above 177.05 for targets of 180, 186 SL of 173

Positional Call
Polaris Software: Buy above 168 for target of 176 SL of 164 (One Week)
Cairn India: Buy above 306.5 for target of 330 SL of 300 (One Month)

Use strict STOP LOSS in each and every trade in this kind of volatile market and Trade at your own risk.

Thanks and Regards

S&P Wealth Creators

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