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India Alternative Research V

DAILY MARKET OUTLOOK

June 15, 2009

Market Snapshot
Despite a firm start triggered by positive global cues, market came off the
Yogesh Radke
higher level after hitting its highest level in the past one year in mid-morning
+91-22-6620 3199
trade and slipped deep in the red inspite of positive IIP numbers in April
2009. Sensex finally ended the day at 15,238 (down 173 points), while Nifty yogesh.radke@edelcap.com
closed at 4583 (down 55 points).

Sentiment Indicators
Market Snapshot
The Implied Volatility (IV) across Nifty strikes decreased to 37-39% levels
when compared to Thursday’s levels of 38-40%. The WPCR of Nifty Options 12-Jun 11-Jun % Chg

increased to 0.80 while the 5 day average is 0.80 Nifty 4583.4 4637.7 -1.2
Sensex 15237.9 15411.5 -1.1
Outlook BSE MidCap 5235.0 5347.6 -2.1
Nifty is expected to open marginally negative around 4560 levels, from where BSE SmallCap 6150.4 6150.4 0.0
it should see a move up before witnessing selling pressure around 4620. On
Friday, Nifty opened on a flat note and once again attempted to move past Jun Futures

the critical resistance of 4700 but failed to do so. Nifty made a new high at Average ICC (p.a.)** 11.5% 13.1% -12.4

4693 (futures made high of 4703) but met with severe supply which saw it
Volume (INR mn)
close below 4600. The advance decline was negative for most part of the day.
Futures 450,285 409,810 9.9
After 13 straight positive weekly closing, Nifty registered its first negative Call 157,216 119,426 31.6
close. The overall momentum is now losing steam and another test of 13 Put 134,528 105,466 27.6
DEMA at 4480 is likely in near term Total 742,029 634,702 16.9
NSE Cash Vol. 237,066 238,925 -0.8
We continue to maintain the same view going further. Since we are now BSE Cash Vol. 78,975 76,186 3.7
reverting from the upper band of the trading range, we may witness more Open Interest (INR mn)
correction going further. While the broader range of 4000-4650 remains Futures 414,628 428,119 -3.2

intact, the immediate outlook is bearish. It is expected that index would Call 222,639 213,420 4.3
Put 220,876 226,643 -2.5
decline to test support if 4450, below which selling may aggravate further. On
Total 858,144 868,183 -1.2
the upside break above 4700 would open up resistance of 4790 which is
Put Call Ratios
61.8% retracement of the entire correction witnessed in 2008.
PCR 0.92 0.97 -4.7
WPCR 0.62 0.57 9.1
Nifty Resistance: 4660 / 4711 ; Support : 4535 / 4487 OI PCR 1.04 1.12 -6.9
Total OI/ Volume 1.16 1.37 -15.5
Market News Nifty IVs at 37 - 39% levels.
FII Activity* (INR Mn) (11-Jun)
n The Index of Industrial Production (IIP), during April 2009, rose 1.4% Y-
o-Y, above expectations (Consensus: -0.1%). This increase has come Volume Buy Sell Net
Cash 35,818 25,887 9,931
after two consecutive months of negative growth.
Index Futures 7,365 13,178 (5,813)
n Suzlon is exploring the option of selling a large portion of its stake in Stock Futures 12,837 11,274 1,563
Total 56,020 50,339 5,681
Belgian company Hansen Transmissions, to raise money for retiring part
of its INR 120 bn debt. Open Interest 11-Jun 10-Jun % Chg
Index Futures 145,289 137,481 5.7

Derivatives Diary Stock Futures 221,497 216,270 2.4

Total F&O OI 641,715 607,654 5.6
Nifty June futures saw price decrease by 1% and OI fall by 0.5%. Nifty June Mutual Fund Activity* (INR Mn) (11-Jun)
futures were trading in a range of 5-10 points to spot throughout the session. Volume Buy Sell Net
In CE, 4700 strike continues to hold the highest OI at 3.8 mn shs. In puts, Equity 14,353 11,366 2,987
4500 PE holds the highest OI at 3.3 mn shs. *FII & MF Data is reported a day late
OI Price Nifty
** Avg of positive ICC's
50.0

4,591 45.0

40.0
4,391
35.0
(MnShares)

4,191
30.0
3,991 25.0

3,791 20.0

15.0
3,591
10.0
3,391
5.0

3,191 0.0
1-Jun-09

8-Jun-09
6-Apr-09

4-May-09

11-May-09

18-May-09

25-May-09
13-Apr-09

20-Apr-09

27-Apr-09

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1
 Daily Market Outlook

New Calls

There are no new calls today.

Open Calls

Date of Market
Scrip Action Returns Rationale
Recommendation Price

After declining sharply the scrip formed a strong base in range of 770-
780 from where it has now started its fresh upmove. Volumes have
increased as the scrip moves above its 13 DEMA. RSI has already
BHARTIARTL Buy 12-Jun-09 830.5 -2.8% moved in buy mode whereas other indicators are turning positive.
Accumulation of the stock at cmp and on any decline till 830 is
recommended for an upside target of 925. Long positions should be
protected with a stop placed at 818

The scrip breached its 13 DEMA after heavy volume distribution witnessed
in previous week. The scrip is expected to decline to its support zone below
HINDPETRO Sell 9-Jun-09 303.7 8.2% around 285. Short positions can be initiated at cmp or any bounce till 334 for
target of 286. Short positions may be protected with a stop loss placed at
346.5

Closed Calls

Date of
Scrip Recomm Initiated Price Date of Closing Closing Price % Return
Recommendation

Unitech Buy 13-May-09 51.0 19-May-09 64.1 25.7%

SUZLON Buy 29-May-09 91.0 2-Jun-09 113.3 24.5%

LITL Buy 1-Apr-09 145.7 8-Apr-09 170.4 17.0%

TATAPOWER Buy 28-May-09 1087.9 11-Jun-09 1213.7 11.6%

DLF Buy 29-May-09 372.0 2-Jun-09 414.9 11.5%

TATAMOTORS Buy 3-Jun-09 349.2 8-Jun-09 369.5 5.8%

NATIONALUM Sell 22-May-09 363.0 1-Jun-09 354.4 2.4%

NTPC Buy 9-Apr-09 196.8 21-Apr-09 186.6 -5.2%

HCC Buy 6-May-09 64.2 14-May-09 60.7 -5.5%

LICHSGFIN Sell 8-May-09 376.1 13-May-09 399.2 -5.8%

LT Sell 21-May-09 1359.4 5-Jun-09 1633.7 -6.6%

BALRAMCHIN Buy 26-May-09 90.2 28-May-09 82.3 -8.8%

ONGC Sell 25-Mar-09 779.5 6-Apr-09 870.4 -10.4%

HDIL Buy 2-Jun-09 307.2 9-Jun-09 268.8 -12.5%

Edelweiss Securities Limited

2
 Daily Market Outlook

Nifty OI Distribution
Call Put

82000.00

• Maximum OI has increased in 4700

73000.00

64000.00 call [increase of 30%] and decrease in

4400 put [decrease of 16%]
55000.00
OI (No. of Contracts)

• Maximum Volumes were witnessed by

4700 and 4600 Call and 4600 and
46000.00

37000.00 4500 Put.

28000.00

19000.00

10000.00

1000.00
4000 4100 4200 4300 4400 4500 4600 4700 4800 4900
Strike Price

Volatility Scanner
85

80 NIFTY
75 Tata Motors
Hindalco
70
ITC
Nifty IVs at 37- 39% levels
65
MTNL
60 Satyam 1. IDEA IVs at 94 are higher than
Historical Volatility

55 IDBI

50
Hindustan Unilever the HVs of 72
Reliance
45
SBI 2. Hindalco IVs at 81 are higher
40 SATYAM RPL
35 RCOM than the HVs of 64
TATASTEEL
30
Idea Cellular 3. SBI IVs at 68 are higher than the
25 IDFC
20 Infosys HVs of 63
15

10
5
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80
Implied Volatility

Sectoral Open Interest Build Up (Contracts) for 1 days

Sector OI OI -D % OI Chg % Prc Chg
Textile 4272 4147 3.02% -3.6% • Amongst all the sectors, Telecom
Engineering & Capital Goods 31878 30949 3.00% -1.6% Sector has lost the most, MTNL
Telecom 6797 6644 2.30% -4.0% decreased by 6% on price with 2%
Banking & Fin Serv 80107 80303 -0.24% -2.5% rise in OI.

Cement 9632 9786 -1.57% -1.7% • In Textile Sector, AlokInd lost 6%

Metals & Mining 28593 29324 -2.49% 2.4% on price with an OI increase of 8%
Auto 16517 17011 -2.90% -3.2%
Oil & Gas 77087 79508 -3.04% -1.8% • In Chemicals Sector, Tata
Chemicals lost 6% on price with
Pharma 15784 16332 -3.36% -1.9%
10% rise in OI.
FMCG 27169 28186 -3.61% -1.7%
Construction 31049 32338 -3.99% -1.6%
IT 45682 47830 -4.49% -2.3%
Power 55870 58619 -4.69% -2.0%
Chemicals 4458 4705 -5.25% -3.4%

Edelweiss Securities Limited

3
 Daily Market Outlook

Futures Snapshot
Top OI Rises Top OI Falls

% Price % Future % Future

Scrip % OI Chg OI Scrip % OI Chg OI % Price Chg
Chg Vol Chg Vol Chg

Hindustan Zinc Ltd 48 196 7.6 1071 Sesa Goa (30) 9,204 5.6 74
JSW Steel 45 1,893 11.0 60 Bajaj Holdings (24) 41 (2.0) (44)
Union Bank 42 1,317 4.1 48 Crompton Greaves (22) 448 (1.4) (62)
Network 18 Fincap Ltd 32 674 (3.4) (41) Andhra Bank (21) 805 (6.5) 20
Maharashtra Seamless 23 168 0.8 117 MoserBaer (17) 3,143 (4.0) (11)
Jindal Steel & Power 22 527 5.3 148 Lanco Infra (17) 2,583 (7.4) (13)
Bank of Baroda 19 1,095 (2.4) (22) Hindalco (16) 15,782 (0.6) (10)

Top Price Change Top Volume Rises

% OI % Future % Future FutureV
Scrip % Price Chg OI Scrip % Price Chg % OI Chg
Chg Vol Chg Vol Chg ol
JSW Steel 11.0 45 1,893 60 Hindustan Zinc Ltd 1071 480 7.6 48
Hindustan Zinc Ltd 7.6 48 196 1071 HCL Infosystems Ltd 400 17 (0.7) (14)
Lanco Infra (7.4) (17) 2,583 (13) Wockhardt 376 1,963 2.9 16
Hindustan Construction (6.9) 15 6,233 118 Bombay Rayon Fashions 304 1,969 (5.0) (7)
Gitanjal Gems Ltd (6.9) (10) 892 (46) Strides Arcolab 280 194 (2.4) 1
Tech Mahindra (6.8) (12) 652 (30) Welspun Guj 198 19,427 3.6 2
Andhra Bank (6.5) (21) 805 20 Opto Circuits (I) Ltd. 184 869 (1.0) 1
Deccan Chronicle Hold Ltd(6.4) (9) 6,344 39 GMR Infrastructure 161 58,330 1.3 13

F&O C ROSSOVER: -
Focus Stocks.
o Positives: Infosys, NTPC, Reliance, Tata Steel, TCS.
o Negatives: Nifty, DLF, LT, SBI, HPCL, Maruti.

Portfolio Tracker
n Nifty moves into Sell No of
Scrip Reco 12-Jun 11-Jun Reco Reco Current Retn since Stop
mode due to its OI days
and PCR indicators 12-Jun-09 Score Score Date Price Price Reco Loss*
running
turning Negative. Nifty Sell (1) 1 12-Jun 4,583 4,583 4,813
Buy Reco made a BHARTI Neu** (3) (3) 11-Jun - 828
return of 11%. BHEL Neu** 3 3 12-Jun - 2,212
DLF Sell (5) 3 12-Jun 368 368 386
GAIL Sell (1) (1) 11-Jun 286 287 1 -0.5% 300
HLL Buy 1 1 21-May 230 256 22 11.0% 251
n Infosys moves into HPCL Sell (3) (3) 9-Jun 323 304 5.9% 319
3
Buy Mode due to its
ICICI Bank Buy 1 3 29-May 740 742 14 0.3% 717
OI and WPCR
Infosys Buy 3 3 12-Jun 1,728 1,728 1,642
indicator turning
Positive. LT Sell (1) (1) 11-Jun 1,629 1,582 1,661
Maruti Sell (1) (1) 10-Jun 1,109 1,085 2 2.2% 1,139
NTPC Buy 5 1 11-Jun 226 222 1 -1.9% 214
n ONGC moves into ONGC Sell (1) 1 12-Jun 1,127 1,127 1,183
Sell mode due to its RCOM Buy 3 5 11-Jun 347 332 1 -4.3% 330
OI, WPCR and Price Reliance Buy 3 5 22-May 2,186 2,362 21 8.1% 2,244
indicators turning RPL Buy 3 1 26-May 134 147 17 9.8% 140
Negative. SBI Sell (3) (1) 11-Jun 1,694 1,635 1 3.5% 1,716
Tata Motors Buy 5 5 11-Jun 369 357 1 -3.2% 351
Tatasteel Buy 3 1 10-Jun 439 458 2 4.2% 435
TCS Buy 3 3 2-Jun 695 765 10 10.0% 743
Buy/ Sell/ Neutral = 10/8/2

Edelweiss Securities Limited

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Vikas Khemani Co-Head I nstitutional Equities vikas.khemani@edelcap.com +91 22 2286 4206

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