The markets opened on a strong footing, mainly in the backdrop of the resolution passed last night by the German parliament for increasing their contribution to the EFSF. Nifty futures closed the day at 5441, 65 points premium to the spot with a considerable addition in open interest. The rise was mainly led by the banking sector, which covered all its losses and Bank Nifty shed open interest on large volumes, which is a very healthy sign. The overall market breath was extremely positive with 1263 advances to 246 declines. On the options side the PCR increased to 1.08, and the 5500 call added the maximum open interest followed by the, 5300 call, while on the put side 5200 put added the maximum open interest followed by the 5400 put, which shows that the markets are still not clearly out of the woods. FIIs were net buyers to the tune of 727 crores and DIIs were net sellers to the tune of 587 crores. While Nifty managed to close above the crucial mark of 5366 the other technical indicators are still in sell mode. The crucial levels to watch for tomorrow will be 5408 and 5457 on the upside and 5323 and 5290 on the downside. Most of the asian markets closed in the green, while europe and U.S. still trading in the green on the back of mixed data, like rise in consumer confidence and fall in home prices, the markets may open on a flattish note, taking cue from the quantum of LTRO to be announced by the ECB very soon as well as the possible domestic political ramifications and RBI's policy in the day's to come.
Tuesday, February 28, 2012
WHAT LIES AHEAD
The Nifty Future closed at 5338, 57 points premium to the spot nifty. The markets opened with a negative bias and the selling became aggressive as the day progressed, marked by unwinding on the future's side and massive call writing from 5200 to 5600 calls and considerable addition of open interest from 5000 to 5300 puts, which was clearly indicated in the PCR which fell to 1.07. The other highlight of the day was that FII's were net buyers to the tune of 329 crores while the DII's were net sellers to the tune of 629 crores. The spot Nifty closed for the day at a crucial point of 5281 which is just below its 30-day moving average. The next crucial levels to watch out for will be 5216, 5182, 5120. On the international markets side there are mixed reactions with good U.S. Home sales data , while on the other side German parliament is voting on whether to increase their share to the Greece bailout fund. With no signs of reversal right now, every rise should be used as a opportunity to short the market, while fresh longs can only be initiated only when there are signs of some amount of consolidation.
Stock Picks
Axis Bank - Short - 1145, 1165, SL 1186. Target 1083, 1069, 1055
LT - Short - 1335, 1360 SL 1390. Target 1276, 1251
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