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.

The markets opened with a positive bias, on the expectation of a favorable outcome on the P- notes taxation aspect, and as expected responded aptly with both Nifty and Sensex closing for the week, up by 116 points and 345 points respectively. The star performers of the day were Kotak Bank, IDFC & SAIL.The market breadth was extremely positive with 1163 advances to 343 declines and the FIIs and DIIs were net buyers to the tune of 962 and 116 crores respectively in the cash market, but on the derivatives side the FIIs were net sellers in Index futures to the tune of 500 crores and net buyers in Stock futures to the tune of 111 crores. Nifty futures closed at 5333, with premium down to 38 points, with a moderate loss in open interest. On the options side the PCR increased to 1.10. On the call side there was considerable addition of open interest from 5000 to 5600 calls, with a exception of the 5100 & 5200 calls, on  the put side the scenario was almost same, with a exception of 5000 and 5500 puts, all the puts from 5100 to 5600 added considerable open interest. The entire activity on the F&O side indicates that there was some short covering, which pulled the markets higher. Although the markets staged a smart recovery, they are still not out of the woods, until Nifty makes a close above 5372. On the technical side, a hammer formation has taken place on the weekly candlestick chart, indicating a trend reversal, but its too early to presume, until Nifty closes above the crucial level mentioned above. The levels to watch out for Nifty, will be 5333, 5372 on the upside and 5229,5193 on the downside.

Stock Picks

Axis bank - BUY 1120-1133, SL 1105. TGT - 1161, 1173

LT -  BUY 1290 -1300, SL 1260. TGT - 1322, 1335