MARKET OUTLOOK
It was a dull day as far as the Nifty movement was concerned as after three hectic days post budget market
was in pause mode. Nifty struggled to move past 5085 and traded in the negative territory for whole session.
Some profit taking was seen in IT heavyweights as well as RIL. Metals too were under pressure but some
late buying lifted Steel counters to the positive territory. SAIL was particularly strong as it surge upwards by
almost 5% on good volumes. Sesa Goa hit a new all time high and was up more than 5%. Private Banks
witnessed some profit taking as stocks like Axis, ICICI and Indusind Bank lost ground. SBI however
remained strong throughout the day. Other big gainers for the day were Apollo Tyre, Hind Zinc, Moser, LIC
Hsg, Sintex, Suzlon, Polaris, Ashok Leyland and Can bank. Losers included Zee, OBC, Punj Lloyd, Cairns
and Mphasis.
Nifty closed almost around 5080, which is a significant short-term resistance. Markets could pause a bit and
drift lower to possibly around 5015-5025. But the trend continues to be positive and such short term
corrections could be bought into. RIL retreated from around 1035 again but here also it seems to be a pause
only as stock continues to show positive bias and might move higher to around 1065-1070 in coming days.
SBI too seems to be gearing for a bigger move and might target 2120-40. JSW steel and JSPL are also
looking positive. JSW Steel could move to new highs if it sustains above 1130 while JSPL is likely to target
730-735. A tradeable rebound is likely in Sugar counters like Renuka, Balrampur Chini and Bajaj Hind.
Amongst others positive bias is seen in IVRCL Infra, HCC, Videocon, Aban and HDIL (above 319).
Nifty has immediate support around 5040 and then around 5010-15 while above 5085 it could target 5125-
30.
DERIVATIVE PICK
JINDAL STEEL & POWER (CASH – Rs.678.50) : The stock has in the past two days showed a lot of
positive momentum and is likely to move up further. Buying is advised above Rs.681 for a target of Rs.692
and Rs.710. Higher target of Rs.725-728 is also possible. Stop Loss of Rs.664 should be kept.
After a rally, expect consolidation
The Nifty found little buying today, as traders were careful of adding to long positions. A dip, if it comes
about can bring the Nifty down to 4950 support. Of course, it does not have to be like this, but t is a
possibility.
On the upside, a rally is likely to face resistance around 5150, therefore it does appear that for short term
traders, the upside is limited while a process of consolidation can cause a lot of choppiness.
The Trend is clearly up. Therefore search for dips on intraday charts, and, look to go long.
Opportunities in Nifty Options?
If the Markets are likely to consolidate, are there any opportunities in Nifty Options? Perhaps, traders could
sell options and wait for time decay to kick in, thereby making some profits?
My Notes: Implied Volatility for Options has come down significntly. Therefore, if you sell them now, and
the Market makes even a minor move in any direction, you could find the value of options going up
suddenly.
It is possible to BUY options since volatility is Low. As we have a weekend coming, perhaps buying on
Monday may be a better option. A trader can buy 5000 CALL and 5000 PUT and expect some volatilityin
the next three weeks.