Saturday, April 10, 2010

Weekly Outlook Indian Stock Market (12 Mar – 16 April)

High: 5399.65
Low: 5290.25
Close: 5361.75
Change: +71.25
RSI (14 Days): 65.65
Pivot: 5351
Support: 5301, 5241
Resistance: 5411, 5460

  • Nifty April future closed at 5366.1, premium of 4.35 points.
  • The PCR-OI has again surged from 1.11% to 1.24% and it closed to 1.13%.
  • The Volatility Index (VIX) tried to rebound and closed at 18.44%.
  • FIIs were net buyer in index futures to the tune of Rs 380.64 crore along with incline in OI by 5%, indicating minor upward movement.
Looking at the data, Nifty is expected to trade in the range of 5,435 and 5,280. Net buying by the FIIs in the last few days of the week coupled with decrease in volatility showing an upturn in market.

During the week, most of the open interest accretion witnessed in the range of 5,200 to 5,300 put, while, on the flip side, highest open interest was build up in 5,400 Calls. The 5,300 and 5,200 strike puts added 18.47 lakh shares and 8.77 lakh shares in OI respectively and on the Call front 5,400 strike calls witnessed erosion of 3.33 lakh shares in OI on Friday indicating downturn is likely in market.

Nifty is likely to move upwards
Nifty initiated the week on an encouraging note, as it succeeded in breaching and moving past the crucial resistance at 5,300 levels. However, it was confined within a range of 5,300 on the lower side and 5,400 on the higher side, for the entire week. Though, Nifty tested 5,300 support level on the back of negative global cues during the week, it managed to end the week slightly above 5,360 mark. As some of the key announcements like earnings, IIP data, and Inflation data are lined up for the coming week, Nifty is expected to move within 5,300-5,400 range ahead of these announcements. Post these announcements it is expected to move past the 5,400 resistance level. As far as the technical indicators are concerned, they are supporting a downward move as they are in the overbought zone. But, the probability of Nifty breaching the lower level is low. If Nifty manages to breach 5,400 resistance level, an upward move until 5,500 can be expected and a downside move until 5,200 can be expected if 5,300 is breached.

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S&P Wealth Creators

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