ROLLER COASTER WEEK – 29/04/2009.
Even though it was a truncated week, the market had more then its share of ups and downs leaving both Bulls & Bears guessing. This week started with the Swine Flu scare affecting Asian markets. The fear about the extent of spread of Swine Flu and its effects on the global economy brought down our markets in tandem with the global markets. Thus on Tuesday, both Sensex and Nifty breached the 200 DMA and closed just below it, adding a tint of disappointment for the Bulls. But the Bulls fought back on Wednesday, which was the expiry. The Rollover picked up and market once again managed to close above the 200 DMA. CRITICAL SUPPORT SENSEX-10715, NIFTY-3296.
The Sensex is in a short term uptrend and for the past three weeks it is consistently finding supports around 10715 level and Nifty at 3296 level. Both the indices tested their respective supports on three occasions in past three weeks and managed to bounce back from there. Thus the support level Sensex-10715 and Nifty-3296 should not be breached for the intermediate uptrend to be alive.
ROLL OVER ANALYSIS.
The Rollover picked up on the last day of the series and posted decent market-wide roll over of around 68%. Sectors like I.T., Telecom and Sugar saw strong Rollovers. Rollover Cost started to increase as the expiry became closer. Strong Rollovers were seen in stocks like Dish TV, Bajaj Hindustan and Balrampur Chini. Tata Steel and Bank of India saw short Rollovers. Overall the April series was extremely Bullish for the Market. The star being J.P. Associates, which gained by more than 60% during the series.
Sensex opened the week at 11237, made a high of 11492, made a low of 10961, and closed on Thursday at 11403, thus registering a weekly gain of 74 points.The Sensex has formed Bullish White Opening Marubuzo in the daily charts on Wednesday i.e. the last day of the week. The Bullish Opening Marubuzo somewhat offset the bearishness of the previous day’s i.e. Tuesday’s Big Black candle and once again helped the Sensex to close above the 200 DMA. The Sensex has formed a small white candle on the weekly charts resembling a ‘Spinning Top’, which is a neutral formation.The Sensex is now testing the resistance at the 50 Week M.A. which is falling at 11552. On breakout above 11552, Sensex will have an immediate target of 12019.The Sensex had given Bullish Flag breakout and the target for which are 11911-12536. These targets will be achieved as long as Sensex does not break support of 10715.The Sensex once again went down up to 10961 and rebounded from there. Thus there exists strong support between 10961-10715. This support should hold for any upmove to sustain.The Trendline Resistance is at 11678 and Trendline Support is at 11102-10518.
For the week ahead the Resistance is at 11581-11870-12316. Support is at 10961-10715-10239.
Nifty opened the week at 3481, made a high of 3517, low of 3351, and closed on Thursday at 3473. Thus the weekly loss was 7 points.Nifty has formed a Bullish Opening White Marubuzo on Wednesday, which happened to be the last day of this truncated week. The Bullish Opening White Marubuzo offset the bearishness of the previous day’s Black candle and helped the Nifty to close above the 200 DMA. On the weekly charts, Nifty has formed a Doji which indicates that the Nifty is undecided about the uptrend.Nifty is fighting the resistance given by the 50 Week’s M.A. which is falling at 3499. On breakout and close above that the Nifty will head towards 3683-3726.The Nifty had given Bullish Flag breakout and the target for which are 3658-3842. These targets will be achieved as long as Nifty does not break support of 3296.The Nifty once again went down up to 3351 and rebounded from there. Thus there exists a strong support between 3351-3296. This support should hold for any upmove to sustain.The Nifty has Trendline Support at 3282-3237.
For the week ahead, the Resistance is at 3554-3648-3715. Support is at 3351-3296-3198.
We recommend a Bull Call Spread for Ril Closed at 1806. Buy 1800 CA at Rs. 95 and Sell 1860 CA at Rs. 70. Total cost of constructing the Spread is Rs 25 (Rs 7500), which will be the maximum loss and maximum profit will be Rs 35 (Rs 10500).
LAST WEEK’S RECOMMENDATIONS:
It was very short and truncated week of just three days and so many stocks could not reach their targets. Early RIIL & LIC Hsg. put up a stunning display.
Buy Rel. Capital 557 Tgt was 596 Reached 568.
Buy Grasim 1802 Tgt was 1867 Reached 1855.
Buy RIIL 786 Tgt was 834 Reached 884.
Buy KFA 41 Tgt was 44 Reached 42.45.
Buy RCOM 232 Tgt was 245 Reached 236.
Buy LIC HSG. 344 Tgt was 359 Reached 373.
THIS WEEK’S RECOMMENDATIONS:
|Buy ICICI ||479||460||492||513|