Sell Hindalco as it reaches resistance zone - 11th July 2013

1) Hindalco is India's leading Metals company in India and the flag bearer of Birla group.

2) Today, the metal stocks including Hindalco have gained, as Fed Chairman gave a positive speech aiding stimulus for the next few months.

3) Though technically, the stock has reached a resistance zone where it is likely to face some resistance (See Chart below)

4) Hence, we are betting on this resistance zone to sell the stock on rise tomorrow. Hindalco can be sold around 103.5 Rs with stop-loss at 105.5 and target levels of 101 and 98.

Sell ONGC as derivatives indicate tremendous short positions - 11 July 2013

1) ONGC is India's leading Oil Exploration company and one of govt's "Maha-ratna" company.

Technical Analysis

2) It has corrected steeply by 10% in the last 10 days and has now trading below the short term (5 Day EMA) and long term (34 day EMA).

3) The stock has reached a minor support level from where it is expected to rebound by 2-3%. If it again resumes its downward journey, then we may see levels of 286 Rs. in this stock.

Derivative Analysis

4) The stock has added 8% in Open Interest today and is now standing at maximum Open Interest for the last one month.

5) It has added 6.7 Lacs shares in Open Interest in July futures. Besides, 1.4 Lacs shares have been added in 300 Rs call, 1.9 Lacs in 310 Rs call, 1.24 Lacs in 300 Rs. call. The premium for all three Options have declined by around 30% which indicates the levels of bearishness existing in the counter.

Considering all these factors, we may derive that we may sell ONGC on every rise. If the stock rebounds from the existing support of 296 and reaches 302-305, we may sell it for possible target levels of 286. On the up side, the stop-loss can be maintained around 312.

Buy Exide as volume, Open Interest and Price increases - 08th July 2013

1) Exide Industries is RPG group company, based out of Calcutta. The company is the leading manufacturer of Auto and Industrial batteries.

Price & Volume Analysis

2) On Friday, the trading volume in the stock has increased by 84%. It is also up by 58% from one week average. The increase in volumes have backed by increase in stock price by 1.5% which is a positive development for the stock.

3) Delivery Volumes have also increased by 85% which further make this rise in stock price more worth while.

Derivative Analysis

4) Open Interest in the stock has increased by 9.5%. 1.6 Lacs new shares have been added in Open Interest. Total Open Interest in the stock stands at 19 Lacs new shares.

Chart Analysis

5) On the charts, there exists a strong support around 121. It has bounced back three times from 20th June and has broken the intermediate top made post that. The support for a buy position can be placed below that.

6) On the upside, the first level of resistance comes at 126 where previous support levels exist. Once this level is breached, the next level of resistance arrives at 131 where intermediate top exists.

Trading Strategy

7) Most indicators above indicates short term uptrend in the coming days. One may buy Exide around 123 with stop-loss at 120 and target levels of 126 and 131.

Buy Cairn India as it takes support - 07th July 2013

1) Cairns India is India's leading private Oil Exploration company. The company has been recently acquired by Vedanta group.

2) The share has not performed as well as analysts all across the world expected it to. Though, it is still maintained on the Buy list of many brokerage houses.

Volume Analysis

3) On Friday, the stock has shown some decline (-0.82%). Though, the volumes were 50% of the weekly average volumes which indicate no major concern in the stock and indicates some kind of consolidation happening in the stock.

4) Delivery Volumes too have been 50% of the weekly average indicates the similar trend to trading volumes.

Derivatives Analysis

4) In the derivatives side, the futures have added 4% new Open Interest which can be expected as it is just the first week of the series. Usually Open Interest increases till the 2nd week of the series.

5) 290, 300 and 310 Strike Calls have seen some Open Interest build-up where one may put short term ceiling on the upside.

Chart Analysis

6) On the charts, the stock seeing taking some support on the short term line which is a positive indication for the stock. 

7) After rebounding from 275 Rs levels, the stock has taken some breather around 290-295.

Trading Call

Collating all the analysis, it is advised to Buy Cairns India around 291 with stop-loss placed at 285 and target levels of 302. Derivatives traders can also adopt straddle strategy buying 290 Calls and Puts with combined premium of 14 Rs. If the stock breaches 285 on the downside, can then aim for 275 Rs where it has a long term support.