"Both Sensex and Nifty were quite volatile during the past week, aping the global cues, and closed in negative territory week on week basis; Nifty after touching a new altime high of 4362.95, corrected and closed at 4145 (which is exactly 5% from the new peak), where as Sensex is yet to clear the earlier high made on 14723.90 made on 09.02.2007. Both domestic liquidity concerns on new IPOs, advance tax payments and fear of RBI's intervention kept markets nervous during the week.
This situation shall continue this week too, with opening of DLF IPO today and closing on 14th instant, and advance tax payments for the first quarter of this fiscal to be made by 15th, keep commitments to secondary market subdued, and every raise shall be utilized by the retailers, operators and traders to liquidate the weak long positions.
Both the indices have closed below short term moving averages, and bearish cross over of 5 DSMA falling below 20 DSMA, confirms our view that it is a sell on rallies market in the immediate short term. In an unexpected scenario markets might go for capitulation, in case of any panic selling, and take support at 100 DSMA which lies around 13800 (Sensex) and 4040 (Nifty). These levels in case touched should be the best buying opportunity for making substantial returns in very short term, as the bounce back from these levels shall be equally explosive, as valuations look quite attractive, since the first quarter performance shall be unvieled from first week of July'07.
Weakening of Rupee is comforting news for IT stocks and export oriented businesses, Rupee might trade between 41.50 and 40.50 during the week, RBI might intervene if there is severe weakness in the rupee as it would again hurt importers, inflation etc.,
The day's range for Nifty shall be 4100 (Support) and 4250 (Resistance); Sensex shall be 13950 (Support) and 14400 (Resistance)
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