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India Alternative Research

DAILY MARKET OUTLOOK

June 24, 2009

Market Snapshot
The market extended its Monday session’s losses and opened on a dull note
Yogesh Radke
tracking global cues on Tuesday. The bourses recovered sharply from the
+91-22-6620 3199
day’s lows on account of sustained buying in key stocks. Sensex finally ended
the day on a flat note at 14,324 (down 2 points), while Nifty closed at 4,247 yogesh.radke@edelcap.com
(up 12 points).

Sentiment Indicators
The Implied Volatility (IV) across Nifty strikes remained flat at 41-45% levels Market Snapshot

when compared to Monday’s levels of 41-46%. The WPCR of Nifty Options 23-Jun 22-Jun % Chg
decreased to 1.04 while the 5 day average is 1.14 Nifty 4247.0 4235.3 0.3
Sensex 14324.0 14326.2 0.0
Outlook BSE MidCap 4942.3 4930.5 0.2
Nifty is expected to open flat around 4250 levels and exhibit range bound BSE SmallCap 5592.4 5599.6 -0.1
movement through the day. Yesterday the Nifty opened with a strong gap
down and tested low of 4143, from where it rallied to erase the intraday loss. Jul Futures

The index tested the higher resistance of 4265 and reverted from there. On Average ICC (p.a.)** 4.0% 3.9% 3.9

closing basis there was formation of a doji with a bit longer shadow. This
Volume (INR mn)
again indicates indecision in short term trade and any move above or below Futures 502,812 415,208 21.1
yesterday’s range should have directional impact. Overall market breadth Call 193,530 156,773 23.4
remained negative throughout the day and closed at 5:7 ratios. For Nifty Put 157,819 130,722 20.7
stocks the ratio was 2:3. Total 854,162 702,703 21.6
NSE Cash Vol. 188,233 165,603 13.7
BSE Cash Vol. 56,843 51,438 10.5
Since last few days we have been looking at 4100 as the price objective of
Open Interest (INR mn)
current decline. Yesterday the index made a low close to our price objective
Futures 420,960 406,628 3.5
and rallied from there. The Nifty is confined in declining channel where the Call 279,076 270,217 3.3
lower supports are placed at 4050 and resistance is at 4275. Nifty 55 DEMA Put 210,103 206,310 1.8
support is placed at 3977 which would be a good support while previous Total 910,139 883,155 3.1

week’s low of 4356 would be key resistance to watch out. This tentatively Put Call Ratios

gives us a new short term trading band of 4350-3950 to watch out for (Shift PCR 0.87 0.88 -2.0
WPCR 0.92 1.03 -10.4
from 4650-4100), which would compress further to give a directional
OI PCR 0.79 0.80 -1.2
breakout. Total OI/ Volume 1.07 1.26 -15.2
Nifty IVs at 41 - 45% levels.
Nifty Resistance: 4280 / 4345 ; Support : 4165/ 4095 FII Activity* (INR Mn) (22-Jun)

Nifty witnessed 29% rollovers, which is much lower than the average of 47% Volume Buy Sell Net

rolls as seen on D-2 of previous expiries. The current Nifty OI stands at Cash 16,172 18,142 (1,970)
Index Futures 22,962 20,976 1,986
~696,000 contracts (INR 148 bn) compared to ~787,000 contracts on D-2 of
Stock Futures 36,316 33,614 2,702
May, which is a fall of ~12%. Total 75,450 72,732 2,718

Market wide rollovers were seen at ~32% of the total positions (in contract Open Interest 22-Jun 19-Jun % Chg
terms), which is significantly weaker than the 40-45% positions rolled by the Index Futures 143,810 147,080 (2.2)

D-2 of the previous expiries. Current OI stands at INR 421 bn which, in value Stock Futures 211,397 218,868 (3.4)

terms, is around 4% less than the D-2 of the May expiry Total F&O OI 633,373 639,236 (0.9)
Mutual Fund Activity* (INR Mn) (22-Jun)
Volume Buy Sell Net
Derivatives Daily Equity 6,476 5,268 1,208
Nifty June futures rose by 0.3% with a 3% increase in OI. Nifty July futures *FII & MF Data is reported a day late
were trading in a range of 10-15 points premium to spot for most part of the ** Avg of positive ICC's
session. In current month Nifty options, 4700 CE holds the highest OI at 3.9
mn shs, while in PE 4300 holds the highest OI at 2.6 mn shs. In July option
series 4800 CE holds the highest OI at 873 k shs, while 3800 PE holds the
highest OI at 1.5 mn shs.

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 Daily Market Outlook

New Calls

There are no new calls for today.

Open Calls

Date of Market
Scrip Action Returns Rationale
Recommendation Price

The scrip has corrected sharply from above 145 levels to 100 in matter of
few trading days. As of now it has reached a strong weekly support which
should provide technical bounce in the stock. The scrip is now oversold on
Suzlon Buy 19-Jun-09 107.0 6.5%
intraday charts which provides trading opportunity. Long positions can be
initiated in the scrip in range of 98-100 for target of 116 with stop loss placed
at 94.5
The scrip has given a breakdown on daily charts and is expected to decline
from these levels. Directional indicators have been in sell mode for some
JPASSOCIAT Sell 18-Jun-09 201.3 1.9% time now. Yesterday 13 DEMA of 210 was broken on downside. Short
positions may be initiated in the scrip for target of180 /172 with a stop loss
placed above 216
The scrip took support at its 13 EMA and bounced back sharply. There is a
good pattern development which should lead to directional upmove in days
ITC Buy 17-Jun-09 196.5 -1.1% ahead. Accumulation in range of 194-198 should be done for target of 224
with stop loss placed below 186. Daily and weekly RSI as well as MACD are
firmly in bullish mode

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%

HINDPETRO Sell 9-Jun-09 328.5 22-Jun-09 301.9 8.8%

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%

BHARTIArtl Buy 12-Jun-09 854.6 17-Jun-09 807.9 -5.5%

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 1496.1 -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%

Edelweiss Securities Limited

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 Daily Market Outlook

Nifty OI Distribution
Call Put

28000.00
• Maximum OI has increased in 4200
call [increase of 865%] and increase
OI (No. of Contracts)

in 3800 put [increase of 425%]

19000.00
• Maximum Volumes were witnessed by
4200 and 4700 Call and 3800 and
4200 Put.
10000.00
*Note: The above data pertains to Jul
Expiry.

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

Volatility Scanner
85

80 NIFTY
75 Tata Motors

70 Hindalco
ITC Nifty IVs at 41-45% levels
65
MTNL
60 Satyam
1. Hindalco IVs at 79 are higher
Historical Volatility

55 IDBI
Hindustan Unilever
50
Reliance than the HVs of 71
45 SBI
40 SATYAM RPL 2. RCOM IVs at 72 are higher than
35 RCOM
TATASTEEL the HVs of 68
30
Idea Cellular
25 IDFC 3. SBI IVs at 56 are higher than the
20 Infosys

15 HVs of 46
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
Banking & Fin Serv 86841 81161 7.00% 0.9% • Amongst all the sectors Sugar
FMCG 27805 26418 5.25% -0.8% Sector lost the most, Bajaj Hind
Construction 32393 30878 4.91% 0.6% decreased by 9% on price with 7%
rise in OI.
Engineering & Capital Goods 34816 33253 4.70% -0.2%
Metals & Mining 31379 30012 4.55% -2.4% • In Metals & Mining Sector, JSW
Sugar 4745 4551 4.26% -3.5% Steel decreased by 4% on price
Power 61410 59363 3.45% 0.8% with an OI increase of 15%
IT 57937 56078 3.32% -0.3%
• In Auto Sector, Hero Honda lost 3%
Oil & Gas 87048 84319 3.24% 0.8%
on price with 3% fall in OI.
Cement 10947 10726 2.06% -0.3%
Textile 4220 4161 1.42% 0.3%
Auto 16814 16677 0.82% -1.3%
Chemicals 4218 4201 0.40% -0.3%

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

Indian Bank 58 1,186 3.9 97 Biocon (38) 1,278 (3.3) 203

Titan Industries 52 105 (3.2) 1154 Central Bank (35) 416 1.3 (76)
Indusind Bank 43 3,350 9.6 132 Alstom Projects (27) 208 6.4 182
Hotel Leela 33 4,320 (1.2) 186 Great Offshore Ltd (23) 679 8.0 198
IDBI 30 11,304 3.8 28 Bombay Dyeing (23) 320 (2.8) 91
Nagarjuna Construction 25 2,356 (0.8) 28 Gujarat Narmada Fert (16) 979 0.3 132
Sintex Industries Ltd 20 378 (3.5) 42
Patel Engineering 20 98 (2.0) 80

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
Gateway Distriparks 10.6 3 1,510 93 Titan Industries 1154 124 (3.2) 52
Indusind Bank 9.6 43 3,350 132 Pantaloon Retail 411 1,363 (1.2) 10
Bajaj Hindustan (9.2) 7 6,880 176 Financial Technologies 314 263 6.4 (1)
Great Offshore Ltd 8.0 (23) 679 198 LIC Housing Finance 306 5,811 5.5 4
Lanco Infra 7.1 6 2,514 28 Bombay Rayon Fashions 274 1,076 4.8 6
S Kumars 6.9 (23) 2,063 193
IDFC 6.8 5 14,685 56

F&O C ROSSOVER: -
Focus Stocks.
o Positives: HLL.
o Negatives: Nifty, Reliance, LT, Infosys, BHEL, DLF, ONGC, NTPC.

Portfolio Tracker
Scrip Reco 23-Jun 22-Jun No of
Reco Reco Current Retn since Stop
days
23-Jun-09 Score Score Date Price Price Reco Loss*
running
Nifty Sell (1) (3) 12-Jun 4,583 4,247 11 7.3% 4,447
BHARTI Sell (3) (3) 16-Jun 810 786 7 2.9% 826
n HLL moves into Buy BHEL Sell (1) (3) 17-Jun 2,092 2,132 6 -1.9% 2,132
mode due to its OI DLF Sell (1) (1) 12-Jun 368 316 11 14.1% 332
indicator turning GAIL Sell (5) 1 23-Jun 280 280 294
Positive. HLL Buy 1 (1) 23-Jun 260 260 247
HPCL Sell (3) (3) 19-Jun 302 308 4 -2.1% 317
ICICI Bank Sell (3) (5) 18-Jun 703 697 5 0.9% 732
Infosys Sell (1) 3 23-Jun 1,747 1,747 1,835
n LT moves into Sell
LT Sell (3) (3) 23-Jun 1,486 1,486 1,561
mode out of Neutral
Maruti Sell (3) (3) 10-Jun 1,109 1,053 13 5.0% 1,083
Mode.
NTPC Sell (5) (3) 22-Jun 191 196 1 -2.6% 201
ONGC Sell (1) (3) 12-Jun 1,127 1,027 11 8.9% 1,044
RCOM Sell (3) (3) 18-Jun 299 296 5 0.8% 311
Reliance Sell (1) (1) 18-Jun 2,025 2,015 5 0.5% 2,050
RPL Sell (5) (3) 18-Jun 126 125 5 0.9% 127
SBI Neu** (1) (3) 19-Jun - 1,708
Tata Motors Sell (1) (1) 18-Jun 330 342 5 -3.9% 346
Tatasteel Neu** (1) (1) 19-Jun - 400
TCS Neu** (1) 3 22-Jun - 367
Buy/ Sell/ Neutral = 1/16/3

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