Bullet Advisory Indian Stocks Weekly— Markets Soar Up From Oversold Territory on Short Covering

BSE Sensex (9424.24) and Nifty (2874.80) closed 8.6% and 7.3% up respectively last week.Nifty put-call ratio was 1.21.Support for Sensex is at 9000 and Nifty at 2740.Resistance for Sensex is at 9860 and Nifty at 3000.Inflation was at 5.64 v/s 5.60 last week. Crude oil was at 42$.Markets soar up from oversold territory on the news of $819 billion stimulus package being passed by U.S.House of Representatives. L&T expressed their interest to buy Satyam to Government of India. Fiedility bought 1.71 Cr. shares of Satyam from the open market. IMF reduced the growth forecast of India to 5.1% from 6.3% in 2009 .Government announced the price cut of petrol and diesel by five Rs and two Rs. respectively. Reliance Industries got interim order from Bombay high court to sell KG Basin gas till final  judgement which is expected by mid March. .Nifty 2700 put option added open interest. SAIL  and RPL  added open interest. SBI and HPCL shaded open interest. Huge position was build up at BHEL February put option strike price 1290 and L&T February call option strike price 680.

Tactics for Future Option players.

1)Hindalco(48.95) Lot Size-1759 Shares

   Buy one call option of February  strike price 50@3.85 Rs.

   Sell one call option of February strike price 55@2.00   Rs.

   Premium .Paid=3.85*1759=6772.15 Rs.

   Premium Received=2*1759=3518.00 Rs.

   Net Premium Paid=6772.15-3518=3254.15 Rs.

   Maximum Profit=55-50=5*1759=8795-3254.15=5540.85 Rs.

   Maximum Loss=3254.15 Rs.

   Break-even=51.85  Rs.

2)Petronet(37.35) February future-Lot Size 2200 shares.

    Buy one lot  February future @37.35

    Sell  one call option of  Februay strike price 40@1.90 Rs.

    Premium Received=1.90*2200=4180.00  Rs.

    Max Profit==40-37.35=2.65*2200=5830.00+4180.00=10010.00 Rs.

    Max loss=Unlimited.

Trading Idea

1)MARUTI(568.30)Buy this stock in decline and trade. 

2)BPCL(391.95)Buy this stock in decline and trade.                      

Trend of Major Stocks

STOCK TREND Days  WeeklyTrend  MonthlyTrend

BHEL.NS             Bearish        2          Falling  Rising              

ICICIBANK.NS  Bulllish         4          Rising   Rising              

INFOSYSTC.NS Bulllish         4          Rising   Falling             

ITC.NS                 Bulllish         4          Rising   Rising              

MARUTI.NS        Bulllish         2          Rising   Rising              

SBIN.NS              Bulllish         4          Rising   Rising              

TATASTEEL.NS Bulllish         3          Rising   Rising              

TCS.NS                Bulllish         4          Rising   Rising              

Technical indicators of major Stocks

MFI=Money Flow Index

RSI=Relative Strength Index

ADX=Directional Momentum Index

STOCK CLOSE  MFI-21  RSI-14  ADX-14 

BHEL.NS            1320.8         46.85   44.43   12.26

ICICIBANK.NS 416.25         46.88   50.06   17.28

INFOSYSTC.NS 1306.65      69.32   61.52   22.13

ITC.NS                 180.1          66.4     63.01   12.11

MARUTI.NS        568.30       75.86    55.16   20.07

SBIN.NS              1151           48.65   47.82   28.48

TATASTEEL.NS 184.6           57.04   43.03   21.96

TCS.NS                 511.6         54.13   52.31   10.09