"Sensex and Nifty were volatile during the entire day, and touched the supports mentioned like a dot intra day and bounced back in the last one hour of trading to close positive. The recovery in the markets is a clear sign of short covering by intra day traders, which is evident from the reduction in discount of nifty futures from 23 to 3 points at the end of the trading.
Nifty managed to close above previous week's close of 4145 for 3 days inspite of intra day volatility, is a positive sign, while sensex and nifty making new lows is a confirmation of down ward bias. In this correction, the lows are tested and supported twice so far each time and then they are broken on the third day. Till the IPO of ICICI which is opening on 19th and closing on 22nd is over markets shall be volatile with a downward bias. US markes have traded in negative and closed deep in red on interest rate concerns.
IIP data on Indian Economy surprised on the upside, causing concern for the raise in inflation, over heating of the economy according to some economists, inspite of RBI and Govt taking adequate measures to tame the inflation to below 5% by last week. One argument is that the inflation is appearing low on base effect, otherwise it is still above the tolerable levels, which invite measures from RBI and Government. Markets will be volatile during the week and generally follow the global cues too, since the domestic money is diverted to IPOs & advance tax payments 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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