>Daily Derivative (ICICI Direct)

Derivative Comments
• Formation of long positions was witnessed in the Nifty. The March series added 947550 shares whereas the April series added 1.18 million shares. The discount in April narrowed from 14 points to 10 points indicating fresh long build up in the next series

• Huge addition of OI was seen in the 2600, 2700 and 2800 Put options with maximum addition recorded in the 2700 Put with 22708 contracts followed by 2800 Put adding 14634 contracts and 2600 Put adding 12576 contracts. The IVs of these Put options has surged by 5-6% suggesting Put buying at higher spot levels in Nifty. On the other hand, significant short covering was witnessed by Call writers in 2600 and 2700 Call options. The maximum Call OI stands at 2800 with 5.48
million shares. We feel this level could act as a resistance for Nifty on closing basis in today’s session.

Technical Outlook
• The Nifty rallied for the third consecutive session to close in the green by 2.13%. The rally was propelled by realty and oil & gas stocks

• On the daily charts, the Nifty formed another strong bull candle, which is now testing the lower trend line of the joining lows of November 2008 and January 2009. After three consecutive sessions of the rally we remain cautious at higher levels as profit booking is likely. However, intraday dips can be considered an opportunity to buy

• The Nifty spot has supports at 2735, 2700 and resistances at 2785, 2805

To see full report: DERIVATIVES 17-03-09

>Opening Bell (ICICI Direct)

● Indian markets are likely to open flat, taking cues from global markets. Asian markets were trading mixed in the morning after US markets ended flat to negative. US markets fell after American Express showed defaults in credit cards. Our markets need to sustain above 9200-9300 levels to trigger another round of short covering. We advise against taking aggressive trading positions at these levels

● The Sensex has supports at 8800 and 8610 and resistances at 9115 and 9210. The Nifty has supports at 2750 and 2710 and resistances at 2805 and 2840

● Asian markets were trading positive in the morning session. We will take cues from the Asian markets in the morning trade and look for cues from European markets in the afternoon

● US stocks were trading strong in early trade but gave up all the gains during the close. We saw profit booking in all three indices after a bounce of almost 10% from the lows in three trading sessions mostly lead by short covering. Most of the global markets rallied after the US markets saw some sign of relief

● Stocks in news: Videocon, Mercator Lines, HCL Tech

To see full report: OPENING BELL 17-03-09

>Opening Bell (ICICI Direct)

● Indian markets are likely to open flat, taking cues from global markets. Asian markets were trading positive in the morning led by financial stocks. Investor sentiments lifted on bank’s stabilisation hopes after G20 finance ministers promised to use all available tools to fight the global recession. The meeting of G20 finance ministers held in the UK over the weekend promised help for troubled countries and said they would use all the fiscal and monetary tools they had to alleviate the economic downturn. We believe the sentiments would be positive on hopes of banks stabilisation.

● The Sensex has supports at 8640 and 8560 and resistances at 8870 and 8980. The Nifty has supports at 2680 and 2650 and resistances at 2760 and 2780.

● Asian stocks gained, led by financial companies and automakers, on heightened optimism government stimulus measures will help revive global economic growth. Nikkei gained 178.3 points, or 2.4%, to trade at 7,754.1. Hang Seng rose 241.8 points, or 1.9%, to trade at 12,767.6.

● US stocks wrapped up their best week since November on Friday as Citigroup said it did not need any more government aid and a broker upgraded Merck & Co, saying its deal to buy a rival was shrewd. The Dow Jones gained 53.92 points, or 0.75%, to end at 7,223.98. The S&P
500 rose 5.81 points, or 0.77%, to 756.55. The Nasdaq added 5.40 points, or 0.38%, to 1,431.50.

● Stocks in news: M&M, RIL, ONGC, Omaxe

To see full report: OPENING BELL 160309

>Spice Jet (KARVY)

● ATF prices no more a concern: Aviation turbine fuel (ATF) prices are down by ~60% from its peak in August 2008 providing a major relief to the aviation players. Fuel cost is the single largest cost accounting for around 40-50% of the overall operating cost for the aviation companies.

Currently, the average fuel price in the 4 metros (for March2009) is Rs30/ litre and we believe that the ATF prices have more or less bottomed out. We expect the ATF prices in FY10E to be around 25% higher from the current levels on account of positive movement in crude oil prices and weakening of rupee against the dollar.

● Slowdown in passenger traffic: Domestic passenger traffic was down by 5% in 2008 as against 33% growth reported during 2007. Slowdown in passenger traffic in 2008 was on account of higher fares due to higher fuel prices and the general slowdown in the economy. Even though fuel price have come down, difficult economic condition still remain a matter of concern in FY10.

Slowdown in passenger traffic has negatively impacted the seat factor thereby leading to higher
fares. During January, air fares were brought down substantially through various promotional offers and discounts but that proved to be of little help in stimulating the demand. We expect the current airfares to prevail during FY10 and with all players cutting down capacities; seat factor is expected to show small improvement in FY10.

● Weakening rupee to put pressure: Weakening of rupee against the dollar over the past few weeks is expected to put some pressure on the aviation industry. Part of airlines expenses including lease rentals, expat salaries, spare parts and maintenance are dollar denominated and weakening of rupee against the dollar would increase the expenses for the airline players. SpiceJet is not expected to add capacity during 2009 and in May2010 it would be eligible to fly on international routes. Accordingly we expect the company's load factor to improve in FY10. In our FY10E, on account of lower fuel price estimate, we have already factored in a dip in average airfares over our FY09E and load factor of 67.8%. We continue to maintain our price target of Rs16 and rate the stock as Outperformer.

To see full report: SPICE JET