Search Now

Recommendations

Friday, March 09, 2007

Edelweiss - Daily Market Outlook 9th March, 07


Market Snapshot

The Sensex opened with a positive gap of 70 points at 12,650. The buying gained momentum in late noon trades and the index soared to a high of 13,100 - up 520 points from the previous close. The Sensex finally settled with a smart gain of 470 points (3.7%) at 13,049. Nifty gained 135(3.7%) points to close at 3761.

The NSE & BSE cash volumes were significantly lower compared to the previous day at INR 79 bn and INR 37 bn. The F&O volumes were a touch lower at INR 327 bn.

Sentiment Indicators

The Implied Volatility (IV) across Nifty strikes has slightly decreased to 29-31% levels. The WPCR of Nifty Options increased to 0.95 compared to the previous day while the 5 day average is 0.93.

Outlook

We expect the market to continue its uptrend as the Nifty may open with a bull gap. With marginally positive global markets and no negative triggers on the domestic front, the markets can touch the levels of 3820 where some selling can come in. US Payroll data will be coming out later tonight which can provide some trigger for the next week.

The FII’s continued to buy Index futures and continue to prefer position taking in Nifty over single stock positions. We might see some profit booking on Nifty to start as it inches above 3800 levels.

With the listing of Idea cellular today, the Telecom sector may see some gains even as heavyweights RCOM, Bharti Telecom and especially MTNL are showing strength over subscriber numbers. One could look at shorting Idea Cellular at levels above 90 and book some early profits. As the news of RIL- IPCL merger ratio comes out later today, the stocks may see some action.

The market breadth has been extremely positive indicating a secular participation of the stocks on the rise. The support side has not only stabilized from its 200 DMA but also bounced back smartly. The bull momentum seems to be picking up again and our revised resistance level for Nifty are at 3818 and 3856. On the bear side the support levels are at 3738 followed by 3692.

Download here