This week market will volatile due to F&O expiry
Sensex lost 716 points or 4.70% to 14521 and Nifty lost 270 points or 5.89% to 4313 in the week ended 19-6-2009. Last week market stopped its fourteen week bull rally. Consolidation is likely to continue after profit booking halted a stupendous fourteen weeks unabated rally on the bourses. Hopes for economic reforms by the Congress-led government send stocks surging. The BSE Sensex is up 4874.58 points or 50.52% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9-3-2009, the Sensex is up 6361.49 points or 77.95%.
Foreign institutional investors (FII) were the key drivers of the recent solid surge. After being heavy net sellers of Rs 4250.30 crore in January 2009 and to the tune of Rs 2707 crore in February 2009, foreign fund selling eased in March 2009, when they tuned net sellers of only Rs 1.1 crore. Their buying gathered steam in April 2009 when they pumped Rs 7384.50 crore. They continued their buying spree in May 2009 pouring Rs 20,606.80 in equities. FII inflow in June 2009 totaled Rs 4,962.40 crore (till 17 June 2009) with their inflow in calendar year 2009 at Rs 26,281.80 crore.
Volatility may rise in the coming week as derivatives contracts for June 2009 series expire on Thursday, 25 June 2009.
Meanwhile, the National Stock Exchange (NSE) will adopt the free-float market capitalisation method to calculate its benchmark indices from 26-6-2009 from the existing full-float method. As a result, volatility may swell, as fund managers will realign their index funds portfolios to mirror changes in the benchmark. Weights of public sector undertakings – ONGC, NTPC, Sail, Power Grid Corporation and National Aluminum Company will come down by at least 50% with the index going free float. Other stocks that will see a drop in weightage to this change in methodology include Bharti Airtel, Reliance Communications, Tata Consultancy Services, DLF and Wipro. However, Infosys Technologies, ICICI Bank, Larsen and Toubro, HDFC and HDFC Bank will stand to gain from this change as their weights will almost double from their current levels. Under the free-float market capitalisation method, weights are assigned on the basis of floating stocks or open market shares of a company. On the other hand, under the full-float method, weights are decided on the total market capitalisation of the company.
The US Federal Reserve’s two-day monetary policy meeting on Tuesday, 23-6-2009 and Wednesday, 24-6-2009 is the global event to watch out for in the forthcoming week. While the Fed meet not expected to result in any immediate changes to its loose monetary policy the market will examine the post-meeting statement for clues as to how long the interest rates will remain at the current near zero.
Use Stop loss strictly in your every trade, because market is heavily volatile with narrow trading range.
| INDEX (WEEKLY) | THIS WEEK CLOSE | PREVIOUS WEEK CLOSE 12-6-09 | PERCENTAGE CHANGE (%) |
| SENSEX | 14521.89 | 15237.94 | -4.70% |
| NIFTY | 4313.60 | 4583.40 | -5.89% |
NIFTY CHARTS
NIFTY FUT. (4324)
Technically market is expecting correction, which came on last week. now still nifty is close on border. if close below 4202 exit from all long positions. Nifty is having strong support at 4202. Buy Nifty only above 4394 for target of 4453-4512-4585, if nifty breaks 4202 the sell nifty below 4197 for target of 4101-4056-3959.
BATA(148.15)
Buy above 151 for target of 156-161-165. Keep stop loss of 145.
BHEL(2089)
buy above 2099 for target of 2149-2195. Keep stop loss of 2082.
IBREAL(198.70)
buy above 201 for target of 212-225. keep stop loss of 191.
Rupesh Yatesh Dalal
http://marketcalls-stock.blogspot.com
