October 11, 2010

Markets may open with a positive note and is expected to trade higher. Minor profit booking can be seen by noon.

sensex (20250)
Sensex has resistance at 20278, 20322 and 20538. Support at 20161, 20106 and 20035.

NIFTY (6103)
Resistance at 6113, 6150 and 6170. Support at 6073, 6061 and 6035.

RECOMMENDATIONS

1) RANBAXY (586)

Resistance is there at 590 above it can test 599 and 622. Movements above this level can give further uptrend. Support at 582 and 576 (Buy at declines for delivery)

2) L&T (2043)

Support at 2028 and 2011 levels (Buy at declines). Resistance at 2047, 2060 above it can test 2085 and more.

3) DIVIS LAB (726)

. Support at 721 and 713. Resistance at 729 above it can test 733 if moves up with volumes then it can test 750 and 755. (Buy at declines)

4) SBI (3247)

Resistance at 3256 if moves up it can test 3261 above it can test 3278 and 3299. Support at 3233 and 3216 (Buy for short term).

5) GAIL (490.15)

Support at 487 above it can test 482. Resistance at 493.5 above 499, 501 and 517. (Buy at declines)

DERIVATIVE STRATEGIES

BUY L&T FUTURES AROUND 2025 LEVELS

BUY SBI FUTURES AT AROUND 3219

The markets had opened on a flat to positive note tracking mixed cues from the global front, but later we saw profit booking coming in the metals stocks with markets making ups and down all the day remaining in red most of the time. In the second part of the day we saw markets getting lower levels support and finally came to a closed in red. The markets in the Asian front fell as commodity prices showed some profit taking which lead to selling in commodity related stocks. However aluminum prices held strong as Alcoa Inc, which posted good profit beating estimates, that the Chinese auto demand is believed to the driving force behind the surge in aluminum demand. In the European space, German exports declined for a second straight month in August on slowing demand. Also adding to the negative sentiment, the UK economy’s growth pace dropped with GDP increasing 0.5% this quarter compared to 1.2% in the last quarter. The US index futures too were trading down ahead of the jobs data which will come out later in the global day. On the domestic side, the NSE and BSE have decided to implement ‘pre-market call auctions’ aiming at enabling better price discovery in the market during the opening session. The FIIs were buying in our markets for some time now and yesterday was no exception. Finally our markets came to a close with Sensex and Nifty recovering from the lows but closed in red with Sensex down 0.32% and Nifty down 0.28%. Minor profit taking was seen in gold from the highest level it reached the other day on increasing demand and weakening dollar. In the base metal side, aluminum gained leaving most of the other in red on comments from Alcoa Inc that the rise in demand from Chinese auto industry is the major driving force behind the rise in the metal price. In the currency space, dollar gained after a long dip which was one reason which made metal prices to slip. Tea prices are expected to climb up the ladder as major rain and pest attack have affected the output this time. Rise in wages at the tea plantations also is expected to make the companies to raise the product prices. As we are nearing the quarterly numbers, we may see some of the FIIs churning their portfolios which can cause volatility in the market. Nifty has immediate major support at 6096 and 6054. Movements below these levels can cause further decline. Resistance would be at 6175 and 6220 levels.

· The Rs 12,000-crore detergent industry, teeming with as many as 1,000 brands, is in a bit of a quandary. Even while prices of soda ash are on the rise, there is a move to impose an anti-dumping duty on the detergent raw material, leading to fears of an increase in detergent prices.

· The power generation in India seems to be on track in the first half this fiscal (April- September), as the electricity production remained 97.15 per cent of the planned 409.04 billion units of electricity.

· US-based energy firm Bergamo Acquisition Corp on Friday said it has entered into a joint venture with an Indian company to construct six solar thermal power plants of 100 MW capacity each with an investment of $400 million for every plant.

· Engineering and construction firm Punj LLoyd said on Friday it has won a contract worth 5.39 billion rupees ($121.4 million) for setting up a gas pipeline and terminal for state-run GAIL India.

· The Infotel Broadband Services arm of Indian conglomerate Reliance Industries has given a “working mandate” to 13 banks for its debut offshore loan, worth $1 billion, Basis Point reported on Friday.

· IVRCL Infrastructures & Projects Ltd. (IVRC IN): The construction company plans to raise 10 billion rupees by selling shares to large investors.

· Mahindra & Mahindra Ltd. (MM IN): Country’s biggest sport- utility vehicle maker may sign an agreement by December or January to buy Ssangyong Motor Co.

· Rural Electrification Corp. (RECL IN): India’s state- controlled lender to power projects hired Royal Bank of Scotland Group Plc, Credit Agricole CIB and Standard Chartered Plc to help sell $500 million of bonds, Finance Director Hari Das Khunteta said in a phone interview Oct. 8.

· Ambuja Cements Ltd. (ACEM IN): The company will spend 22 billion rupees ($495 million) to set up a 2.2 million metric ton factory in the northern Indian state of Rajasthan.

FUTURES OPTIONS STATUS

Markets opened on negative note and traded lower.Profit booking was seen throughout the day.Selling was seen in the financial, metal and auto sector.Buiyng was seen in Reliance, Wipro, Infosys and L&T.

The Advances to declines ratio was to 1250 2011.Total F&O Turnover in the NSE was 1.75 lakh crores.

The October futures saw selling with addition of 18.25 lakh shares added in open interest. Nifty futures touched a high of 6229 and a low of 6134.

Among sectorial indices,BankNifty oct series declined with addition of 25000 shares in open interest. While the CNXIT October series also saw selling with 1250 shares added in open interest.

On the most active stock futures for october,Adani Enterprise gained by adding 3.55 lakh shares in open interest.Tata Global gained by adding 12.7 lakh shares in open interest. Biocon gained by adding 2.6 lakh shares in open interes.Areva T&D saw buying with 1.83 lakh shares added in open interest.India Infoline gained by shedding 78000 shares.Tata steel declined by adding 13.1 lakh shares.Ibreal estate declined by adding 1.88 lakh shares in open interest.Orbit corp declined by shedding 1.64 lakh shares.Tulip declined by adding only 13750 in open interest.

Small and midcap gainers were Jubilant foodwork,Indiabulls,Binaniindustries,lgsglobal,Mandhana industires

Tata steel was the most active counter on the NSE with a turnover of 990 crores followed by Reliance and IFCI.

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