Market outlook for 09/04/10

The domestic market today closed in deep red on the back of negative global market as well as higher food inflation data that rose by 17.70 per cent. The food price inflation revived fears of a hike in key policy rates when the Reserve Bank of India (RBI) will review its monetary policy on 20 April 2010. Also, the negative European market which opened on a weak note in line with Asian and U.S markets led the market to touch its day low in the afternoon session. The benchmark indices belled today's session with flat note with negative bias tracking weak global cues. The investors remained cautious during the early trade, as government was scheduled to announce some wholesale price indices for the year through 27 March 2010. Throughout, the day the market remained gloomy, mainly due the weaker Asian market and continued its south ward journey as the day progressed. The market tumbled to a fresh intraday low in afternoon trade, as higher than expected inflation figures dampened the sentiments of the investors. Despite a marginal surge during the final trading hours, cannot help the market to cut losses and finally closed the day's trade in a deep red zone.
Nifty closed the day at 5304.45 down by 70.20 points. Nifty April future closed at 5293, discount of 11.45 points.

• FII bought in Cash (Net buy 62.20 Crore)
• FII bought in index options, but sold in index futures and stock futures (Net sold 302.32 Crore)
• DII sold in Cash (Net sell 93.62 Crore)
• US market ended just Flat to Negative.
• Global cues are flat to Negative.
• SGX nifty is Flat 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 1.23
• Advance Decline for the day was 441:854

Over all view
As anticipated about the implication of “Doji”, market reacted exactly in same manner and closed below important support level of 5310. Nifty daily chart has formed “Long Black Candle” a bearish candlestick pattern after two consecutive doji days. Daily momentum indicators have given negative crossover to signal line after experiencing over bought zone in previous days. Over all scenario turned weak as long as nifty is trading below 5345 level.

NIFTY Technical
Current Spot: 5304.45
Pivot: 5322
3DEMA: 5332
7DEMA: 5320
20DEMA: 5242
RSI (7 days): 54.72
Supports: 5273 - 5241
Resistance: 5353 - 5402

Target Nifty
Buy Nifty above 5325 - 5348 - 5398 - 5428 SL - 5318
Sell Nifty below 5294 - 5274 - 5243 - 5194 SL - 5323

Option Open Interest

Yesterday there was a huge Open Interest buildup in 5300 and 5400CE and 5200PE April Strike price indicating that Option writers are playing for 5250 - 5350 range for time being.

Option & Futures Call
Buy Nifty 5300PE above 88.3 for targets of 104, 120 SL - 77.9
Buy Nifty 5400CE above 48.2 for targets of 55.8, 68.7 SL - 42.1

Swing Trade

Voltas (182.30)
Yesterday Stock has broken mid January downward slopping trend line with strong volume and formed “Long White Candle” a bullish candlestick pattern on daily chart. Daily momentum indicators hovering in bullish zone especially RSI has given positive cut to signal line. Short term moving averages showing upward movement in stock. Looking at all above technical parameters traders with moderate risk appetite can consider Buy above 183.40 with tight stop loss of 180 for a Target of 190.

Stock Ideas for the Day
Reliance Industries: Buy above 1120 for targets of 1125, 1136, 1147 SL of 1112
Reliance Industries: Sell below 1101 for targets of 1096, 1083, 1071 SL of 1118
Vijaya Bank: Buy above 49.20 for targets of 50.2, 51.6 SL of 48.4
Dena Bank: Buy above 80.80 for targets of 82.2, 84.6 SL of 79.2
IFCI: Buy above 53.5 for targets of 54, 55 SL of 52.6

Positional Call
Ballarpur Industries: Buy above 31.6 for target of 34.8 SL of 31.1 (One Month)
Indraprastha Medical: Buy above 48.3 for target of 51 SL of 47.5 (One Week)

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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