Anagram's Weekly Watch : 14/02/2009
WHEN THE BULL MEETS THE BEAR
The battle of the titans is on the cards. On Monday we will have the vote-on-account and the market's reaction to this interim exercise will determine whether the bulls or the bears will have the final say.
At this point of time the bulls have the ball. If you were to take stock of the open interest (OI) added in stock futures after the January expiry, you will find that it has reached 30.7%. In order to compare like against like, we looked at OI addition up to expiry plus 11 sessions and found that this addition is the highest in percentage terms since September 2006, when it was 32.6%.
This piece of data tells us that the markets have never added OI with so much of gusto in the past 29 months. If the markets continue to be bullish even after the VOA, then there is no looking back and we will have a rocking rally. But should for any reason, the rally engine sputters and it starts going down then the positions built will ensure that we fall with equal aplomb.
Now this rally in our domestic markets comes about amidst a week of discontent in global markets. Our Sensex has risen 3.7% in contrast to a 5.20% slide in the Dow. This kind of an outperformance is rather abnormal. Another theory going in the street is that the powers that be have muzzled up the most vociferous bear on the street on Friday evening and have winked at the bulls to take the ball and run till the elections.
Since Government action can continue in the form of RBI policy initiatives or other steps in the name of warming up a cooling economy, the Government may continue providing the covering fire for enterprising bulls. So the assumption that how the market moves on Monday will decide the direction for the rest of the week, is fraught with the aforesaid dangers.
The only way to judge is technically. A close below 9440 would be the first sign and a close below the 9000 mark, will be a convincing signal for the bears to move in.
Going by the past, however, selling on news has always paid off. So it might be a good idea to atleast book your trading profits after the VOA on Monday, where as a bearish call can be taken only if the indices tumble below the trigger levels mentioned.
The battle of the titans is on the cards. On Monday we will have the vote-on-account and the market's reaction to this interim exercise will determine whether the bulls or the bears will have the final say.
At this point of time the bulls have the ball. If you were to take stock of the open interest (OI) added in stock futures after the January expiry, you will find that it has reached 30.7%. In order to compare like against like, we looked at OI addition up to expiry plus 11 sessions and found that this addition is the highest in percentage terms since September 2006, when it was 32.6%.
This piece of data tells us that the markets have never added OI with so much of gusto in the past 29 months. If the markets continue to be bullish even after the VOA, then there is no looking back and we will have a rocking rally. But should for any reason, the rally engine sputters and it starts going down then the positions built will ensure that we fall with equal aplomb.
Now this rally in our domestic markets comes about amidst a week of discontent in global markets. Our Sensex has risen 3.7% in contrast to a 5.20% slide in the Dow. This kind of an outperformance is rather abnormal. Another theory going in the street is that the powers that be have muzzled up the most vociferous bear on the street on Friday evening and have winked at the bulls to take the ball and run till the elections.
Since Government action can continue in the form of RBI policy initiatives or other steps in the name of warming up a cooling economy, the Government may continue providing the covering fire for enterprising bulls. So the assumption that how the market moves on Monday will decide the direction for the rest of the week, is fraught with the aforesaid dangers.
The only way to judge is technically. A close below 9440 would be the first sign and a close below the 9000 mark, will be a convincing signal for the bears to move in.
Going by the past, however, selling on news has always paid off. So it might be a good idea to atleast book your trading profits after the VOA on Monday, where as a bearish call can be taken only if the indices tumble below the trigger levels mentioned.
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| STOCK | RECOMMENDATION | CMP | STOP LOSS (Rs) | TARGETS (Rs) | |||
| ORACLE FINANCIAL | BUY | 681 | 648 | 735 | |||
| FUNDAMENTAL CHECK |
| Company | Price | Report Type | Recommendation |
| 13.02.09 | & Target (Rs) | ||
| (Rs) | | ||
| MARKET STRATEGY | ~ | RESEARCH REPORT | ~ |
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