Outlook for Monday and This week

"Both Nifty and Sensex have closed positive week on week; closed above the resistance levels of 4250 and 14400. Major public issues DLF and ICICI are successfully subscribed and advance tax payments by cement companies and Banks are quite encouraging. Especially Banks paying higher advance tax, in the raising interest rate environment, is a positive surprise, which forced SBI to lead the pack and market. Markets were volatile and closed slilghtly negative, as predicted, owing to profit booking on week end consideration.

SEBI has issued final order on Karvy Stock Broking Limited banning for 3 months from operations, for involvement in the IPO scam of 2005, on saturday. They can prefer an appeal within 21 days, which the management said will explore immediately. However, Karvy being a considerable player in the markets with good retail clientele, will also affect the sentiment on the markets in the opening of the trade on monday, coupled with weak close of US markets on friday.

Open interest positions are reaching record levels, and this being June expiry week, coupled with few other cues like FOMC meeting and the crude oil picture keep the markets in turbulance. Once June expirty is smooth, players will be concentrating on the results season which unfold from first week of July, starting with Technology sector. Rupee having appreciated substantially and looks like positioned to become still stronger, due to huge inflow of US$ expected as subscription to the recent large issues (viz., DLF IPO and ICICI FPO) the measures to be taken by RBI to keep it out of excess volatility will decide the trend of the markets too. Sideways consolidation is expected to continue till the unveiling of results season especially, Infosys..which comes out with the out look for the sector and annual guidance will set the dierection for the markets. So far the technology sector is under performer of the broader markets, and postive cues from the sector shall take the markets in to bullish zone, where as any signs of negative direction, will catapult them into bearish mode.

High risk traders can buy Straddle of 4250 June series for making substantial returns. (Buy 4250 call @ 37 and 4250 put @ 46) The expiry date is 28.06.2007, hence, the values shall be very quickly moving with spot markets and one has to quickly exit from the positions booking the profit.

Nifty is likely move in the range of 4150 to 4350 during the week; June series might close lower than the May settlement price of 4296.

The day's range for Nifty shall be 4180 (Support) and 4295 (Resistance); Sensex shall be 14200 (Support) and 14600 (Resistance)