Market Snapshot
Following the robust performance of last week, the Sensex opened with a positive gap of 95 points at 13,479, and moved higher as the day progressed touching a high of 13,708 before settling with a significant gain of 312 points (2.3%) at 13,696. Nifty Settled at 4,013 (up 96 points).
The NSE and BSE cash volumes were lower compared to the previous day at INR 89 bn and INR 41 bn respectively. The F&O volumes were also lower at INR 297 bn.
Sentiment Indicators
The Implied Volatility (IV) across Nifty strikes has increased to 24-27% levels. The WPCR of Nifty Options has increased to 1.25 while the 5 day average is 1.06.
Outlook
The markets will open on a positive note taking cues from strong US markets. The positive run will continue as the TCS results were good and in line with the street expectations. After consolidating seen during the last few weeks, the Nifty has inched upwards in a new trading territory breaking some strong resistance levels. This is a good signal for the bulls taking over bears for a long run.
The Rupee appreciation will bring IT sector under some pressure even when the major players have considerable hedges against the dollar fall. Textile might face some continued pressure due to their low margins and high forex exposure. Cement counters can have some buying opportunities at current levels after recent fall. ACC is our top buy pick which saw a 6% OI increase with 5% price rise in the cement stocks.
FII’s were net buyers of INR 1472 cr Index futures and INR 31 cr in single stock futures. This buying, along with OI build seen for FII numbers signals new interest in the broader market.
Nifty built on the bullish momentum after breaking the 3901 level on Friday. The market breadth was clearly on the side of the bulls and this adds to the intermediate bullishness of the market. The market has retraced 67% of the February fall and we expect the market to consolidate and move northwards from the current levels. The intermediate support is now at 3984 followed by 3962, while the resistance is at 4057 followed by 4099.
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Edelweiss - Daily Market Outlook 17th April, 07