LACKLUSTURE

The markets opened on a flattish note, but maintained a positive bias throughout the day, except for an hour when both Nifty and Sensex entered the negative zone, but regained the positive momentum and closed for the day on sluggish volumes, up by 22 points and 75 points respectively. The star performers for the day were JP associate, Reliance infra and Reliance power. The market was extremely positive with 1105 advances to 405 declines. The FIIs were net buyers to the the tune of 245 crores, while DIIs were net sellers to the tune of 73 crores in the spot market. On the derivatives side, FIIs were net buyers in Index futures to the tune of 192 crores and net sellers in Stock futures to the tune of 113 crores. Nifty futures closed at 5350, with 33 points premium, and considerable loss of open interest. On the options side PCR remained steady at 1.10. On the Call options side, there was shedding of open interest from 5000 to 5300 calls, along with a considerable addition of open interest from 5400 to 5600 calls, while on the Put options side there was sizeable buildup of open interest from 5100 to 5400 puts. The entire activity in the F&O space suggests short covering, along with participants hedging the portfolios, by adding puts at lower levels. The fall in India VIX by 6.70% also suggests that, markets may move higher from these levels. As suggested yesterday, the level of 5372 on Nifty proved crucial, and Nifty futures touched the overhead resistance of 5372. On the technical side, most of the indicators on the daily charts are trending upwards on the back of two positive sessions, but on the weekly charts they are still in sell mode. In order to confirm the hanging man, that was formed on the candlestick charts on Friday, the markets must continue the positive momentum for a few more sessions. The levels to watch out for Nifty, tomorrow will be 5339, 5361, 5373 on the upside and 5287, 5253 on the downside. The European markets closed on a strong note on the back of better than expected manufacturing data, from Germany and U.K., while the U.S. markets are trading on a flattish note, on the back of mixed data which shows a unexpected fall in construction spending and better than expected PMI manufacturing data.

STOCK PICKS

LT - BUY 1295-1306, SL - 1275. TGT - 1346, 1361.

AXIS BANK - 1115 - 1125, SL - 1095. TGT - 1168, 1182.