Fibonacci Power

Are the bulls back in action??? All the weak bears must be wondering as Nifty covered up its lost ground till 4700. The rally was strong enough to give short sellers shivers, however the overall signal continues to be weak as the index has just manged to take support at 50% retracement area (3906-5168). The strength of the pullback is yet to be seen.

• NIfty50-There was a minor reduction in OI of CA between 4500-4700 but at major increase in OI of PA between 4400-4600.
• The outstanding contracts of options are still tilted towards the Puts.
• Watch out for 4600 PA and 4700 CA for clues during the market.
• Only Auto and Pharma are the bullish sectors, rest all are indicating weakness hence a sell on rise.
• Banking, Metal and Oil sector will provide good opportunity to sell on rise.
• Nifty 50 resistance above 4725 seen at 4800-4850.

Log on at 10.40 a.m. for further updates.....

Futures Activity ( 11th September )

Let’s look at the activity witnessed in some of the most active future counters during the day.

Starting with the Nifty Index which closed down by 2.5 %. The September contract OI remained flat but the Oct month OI showed an increase of 10.82 %. This is indicative of short positions being created for medium term. While support is seen at 4260 strong resistance is seen towards 4400. Sell on rally towards 4400.

Reliance one of the index heavy weight ended negative by 4.16 %. While September month contract showed a rise of 7.73%, the Oct month showed an increase of 78.97 %.

Long term continues to be negative, short term has also turned bearish below 2050. Likely targets are 1885 and 1750.

Bharti another heavyweight took a plunge of 4.3 % and its OI shot up by 26.18 %. The stock has consistently failed to sustain above its long term averages and the latest breakdown from the bear flag (at 815) can take it down to 700 levels.

After the heavyweight let’s shift our focus to the banking sector. Bank Nifty fell by 1.43 % and the OI went up by 27.93 %. Stocks to watch out for in this sector are Bank India down 1.14 % and OI up by 12.06 %, Bank Baroda closed flat and OI is up by 10 %, PNB also closed flat with OI up by 6.8 %. All the three stocks has risen up by considerable volume in the recent past from lower levels and are facing problem crossing above its long term averages. Bank of Baroda looks the most positive technically.

DERIVATIVE CLUES…..10th September

Banking took the worst hit today, followed by Realty, Metals, and Power. The best performing sector was Sugar.

Metals:
Sterlite saw the largest fall with a large increase in OI and Volume, This was followed by Hind zinc and Welspun Guj. While Hind Zinc also added on to OI. Welspun Guj showed a moderate increase.

Stock to watch out for is Sterlite to short.

After moving in a channel for past couple of days it has broken below its 1st support of 591 on huge volume and is also trading marginally below its multiple support area at 580.

Short sellers can look for a target of 545 with stop loss above 591.

This is an intraday chart of STERLITE INDS Future (1 month).

Banking:

The sector witnessed negative trend across the board. The leaders in the fall were PNB, IOB and Canbank.While PNB added 12.6 per to its OI with a huge increase in volume, Canbank and IOB showed a moderate increase in OI.

Along with PNB the stock to watch out for would be AXIS BANK which closed flat but added 15.1 % to its OI.

The stock is trading at a very precarious level just managing to hold on to its support line at 705. Further positive move above 725 can be taken as an entry signal with stop loss below 705.

This is an intraday chart of AXISBANK Future (1 month)

Sugar:
Balrampur and Triveni were the leader of the pack with gains of 3.1% and 2.7 % respectively. There was no major increase in OI and the volume was also low indicating that the upmove is unlikely to sustain.

Realty:

While the fall was moderate in the sector, with Orbitcorp posting a 2.8 % gain, The stock which took excessive beating was Purva ( -8.4 %) . It also showed a huge increase in volume and simultaneous increase in OI by 52.2 %.

Power:
The fall was widespread with stocks like Bhel, Cesc, KSK and Neyvelli Lignite topping the list. Bhel showed 10.5 % increase in OI and Neyvelli showed 14.4 % increase in OI.

However the stock to watch out for in this sector is RPOWER which closed flat but witnessed a 49.4 % increase in OI.

Currently it has given a spike up from the level of 165 on huge volume. Taking in a broader view the stock is making an “Inverted Head & Shoulder” formation with breakout coming at 175. One can go long on this stock above 175 or at current levels with a strict stop loss at 165.




This is an intraday chart of RPOWER Future (1 month).

RNRL AT 94.7 ( TIME 11.35)

RNRL ( 94.7) : This is an hourly chart of RNRL showing breakout level . Watch for support of high volume and you can have a winner in your hand for today with a minimum stop loss

GOLD SPOT: Downside Left

GOLD ( 834) : The current rally from 800 levels after the massive breakdown is likely to be a short term corrective uptick in the downtrend.
The level of 860 should prove as a stop loss area to short, and on the downside 740 can be taken as target and support area.

Technically speaking 800 levels has proved to be a good support in the past , but at the same time 860 is likely to act as a stronger resistance

Index Trekking Down but we are tracking it for you

Nifty Futures ( 4218): The steady fall witnessed from the level of 4650 maybe coming to and end or we are about to see a short term break to the dumping.

For confirmation we have to see if the level of 4200 which provides support from multiple angles holds towards the close.

If the view proves wrong we might see continuation of the existing bearish trend and therefore re-testing of the 3850 levels.