Technical Picks | March 30, 2013

Bulls successfully defend 5600 mark - Bounce on cards
Sensex (18836) / Nifty (5683)
The opening session of the expiry week started off on a quiet note in-line with mixed global cues. Indices then showed some early signs of bounce back but strong selling pressure resulted in sizeable intraday correction of nearly one-and-half percent from the day's high. However, indices managed to hold their strong support zone of '200-day SMA' and 'Downward Sloping Trend Line' for the day and the rest of the week as well. On Thursday, the volatility was seen on the back of Derivative expiry. In this process, indices soared during the latter part of the session to end the week well above the mentioned support levels. During the week, Consumer Durable, Banking and Metal sectors defended our benchmark indices; whereas Capital Goods, Auto and Oil & Banking counters remained under pressure throughout the week. The Sensex and the Nifty ended the week with a very nominal gain of 0.53% and 0.55%, respectively.
Source: Falcon

Exhibit 1: Nifty weekly chart

Exhibit 2: Nifty Daily chart

Pattern Formation
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The '20-day EMA' and the '20-week EMA' are placed at 19094 / 5766 and 19161 / 5801 levels, respectively. The '200 Day SMA' is placed at 18556 / 5627 5627. The 'Lower Top Lower Bottom' formation on weekly chart is still intact. We are witnessing a 'Downward Sloping' trend line support drawn by joining the lows of December 18, 2011 and March 04, 2013.
Source: Falcon

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strong support level of 18525 / 5600 5600. In fact, indices managed to bounce sharply during the last hour of the week to register a weekly close marginally in the positive territory. We are now observing that the daily 'RSI' and 'Stochastic' oscillators have signaled a positive crossover. Hence, a move beyond Thursday's high of 18883 / 5693 may push indices higher to test next resistance levels of 19094 - 19210 / 5766 - 5820 5820. On the flipside, we maintain our view that only a sustainable move below 18525 / 5600 would justify a bear case scenario and may drag indices lower to test 18255 - 17800 / 5548 - 5441 levels.

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The daily momentum oscillators viz, the 'RSI' and 'Stochastic' are signaling a positive crossover.

Future Outlook
This week, we witnessed a very narrow trading range for the benchmark indices. As mentioned in our earlier report, the 'Downward Sloping Trend Line' and '200-day SMA' provided decent support to our benchmark indices. Despite a couple of decent attempts, the bears were unsuccessful in violating the

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Technical Picks | March 30, 2013

Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
SENSEX NIFTY BANKNIFTY ACC AMBUJACEM ASIANPAINT AXISBANK BAJAJ-AUTO BANKBARODA BHARTIARTL BHEL BPCL CAIRN CIPLA COALINDIA DLF DRREDDY GAIL GRASIM HCLTECH HDFC HDFCBANK HEROMOTOCO HINDALCO HINDUNILVR ICICIBANK IDFC INFOSYSTCH ITC JINDALSTEL JPASSOCIAT KOTAKBANK LT LUPIN M&M MARUTI NTPC ONGC PNB POWERGRID RANBAXY RELIANCE RELINFRA SBIN SESAGOA SIEMENS SUNPHARMA TATAMOTORS TATAPOWER TATASTEEL TCS ULTRACEMCO WIPRO R2 19,167 5,782 11,639 1,186 187 5,076 1,361 1,882 708 304 188 392 293 390 320 256 1,829 343 2,967 832 848 648 1,724 96 484 1,089 152 2,937 316 374 68 680 1,461 652 900 1,356 147 323 763 108 466 846 373 2,173 162 592 837 283 100 342 1,618 1,937 451 R1 19,001 5,732 11,501 1,172 181 4,997 1,331 1,841 692 298 182 385 283 385 315 245 1,798 331 2,890 813 837 637 1,633 94 476 1,067 148 2,913 313 361 67 666 1,414 640 881 1,319 144 317 740 107 452 809 349 2,123 159 570 828 276 98 327 1,597 1,903 444 PIV OT PIVO 18,785 5,669 11,275 1,157 173 4,922 1,304 1,798 672 292 178 377 275 381 304 237 1,765 316 2,845 787 819 620 1,575 90 467 1,035 142 2,873 307 350 65 646 1,374 628 860 1,292 142 308 722 105 437 787 332 2,075 154 542 821 271 96 314 1,563 1,860 435 S1 18,619 5,619 11,136 1,144 167 4,842 1,274 1,756 655 285 173 369 265 375 299 226 1,733 303 2,768 768 808 608 1,483 88 458 1,013 138 2,849 304 337 63 633 1,326 616 841 1,255 140 302 700 104 424 750 308 2,025 151 521 812 264 94 300 1,542 1,826 428 S2 18,403 5,555 10,910 1,128 159 4,768 1,247 1,713 635 279 169 361 257 371 288 218 1,700 288 2,723 742 790 591 1,425 85 450 980 133 2,809 298 326 61 613 1,286 604 821 1,229 138 293 682 102 409 728 291 1,977 147 493 806 260 92 286 1,508 1,783 420

Technical Research Team
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Derivatives Review | March 30, 2013

5750-5800 is strong resistance. Sell on rise
Nifty spot closed at 5682.55 this week, against a close of 5651.35 last week. The Put-Call Ratio has increased from 0.82 to 0.98 levels and the annualized Cost of Carry is positive 7.27% 7.27%. The Open Interest of Nifty Futures decreased by 33.44% 33.44%.

Put-Call Ratio Analysis
PCR OI has increased from 0.82 to 0.98 levels. In the new series we have observed good amount of buildup in 5600-6000 call option, while in put option 5200-5700 strikes has seen significant amount of buildup in open interest on week on week basis. Highest buildup in open interest for this series is in 5600 put option, while in call option the buildup is quite scattered between 5700, 5900 and 6000 strike price however 5700 call option has the maximum open positions as of now.

Implied Volatility Analysis
Implied Volatility (IV) for NIFTY has decreased from 14.39% to 13.93%. Historical volatility (HV) is at 16.06% and that for BANKNIFTY is trading at 26.06%. Liquid counters having very high HV are HDIL, PUNJLLOYD, OPTOCIRCUI, IVRCLINFRA and NHPC. Stocks where HV are on lower side are ITC, DRREDDY, SUNPHARMA, LUPIN and TCS.

Open Interest Analysis
Total open interest of market has decreased from Rs.1,54,863/- cr. to Rs.88,455/- cr. Stock futures open interest has decreased from Rs.28,714/- cr. to Rs.22,008/- cr. Some of the liquid counters which added open interest are RELINFRA and CAIRN. Open interest was shed in large cap names like AMBUJACEM, SAIL , ACC, HCLTECH and TATAMOTORS.

Cost-of-Carry Analysis
Nifty futures closed at a premium of 31.70 points against the premium of 55.25 points to its spot. Next month future is trading with premium of 50.30 points. Liquid counters where CoC is high are RENUKA, WELCORP, NHPC, ASHOKLEY and CHAMBALFERT. Stocks with negative CoC are OPTOCIRCUI, HAVELLS, HDIL, PUNJLLOYD, and ULTRACEMCO.

Derivative Strategy
Scrip : HDFCBANK View: Mildly Bearish Buy/Sell BUY SELL
BEP - `615

CMP : `627.90

Lot Size : 500

Exercise Date (F & O) : 25th. Apr. 2013 Expected Payoff
Closing P rice Price (`) Expected Profit/L oss rofit/Loss

Strategy: Bear Put Spread Scrip HDFCBANK HDFCBANK Strike Price 620 600 Series APR APR Option Type PE PE Buy/Sell Rate (`) 10.00 5.00

Qty 500 500

580 590 600

`15.00 `15.00 `15.00 `5.00 (`5.00) (`5.00)

Max. Risk: `2500
If HDFCBANK closes on or above 620 on expiry.

Max. P rofit: `7500 Profit:
If HDFCBANK closes on or below 600 on expiry.

610 620 630

NO TE : Profit can be booked before expiry if HDFCBANK moves in favorable direction. NOTE TE:

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Weekly

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Ratings (Returns) :

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

Weekly

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