"Both indices have touched new highs, and closed in the positive territory, week on week basis too. Psychological figures of 15000 on Sensex and 4400 on Nifty are breached intra day on strong buying and short covering in technology stocks. Inflation data released at noon shown marginal rise from 4.03% last week to 4.13% for the week, our assessment that the inflation has bottomed out for the time being is being vidicated. Crude continues to be firm above US $ 72 on supply concerns. US markets too closed firm on better earnings expectations.
This is a crucial week for the technology sector, which is under performer during the past 6 months, Infosys coming out with results for the first quarter, guidance and outlook for the industry in general, can decide the trend for the medium term. It is trading far below 200 DSMA and positive guidance and better than expected results or other wise can bring 7 to 10% swing in the stock price and sector on 11th after the announcement of the news, before market hours; In this indecisive situation, going long / short will be suicidal. One can go long on straddle of Infosys 1950 strike price in current series, and also straddle of 4350 strike price on Nifty in current series, as the volatility shall be quite high. Risk averse players, can wait till the event passes, and consider the strategy observing the direction on 11th.
Ongc is currently trading around 877, and is under performer in the rally. Owing to firming of crude prices above US $ 72 and likely hood of further rise is beneficial to the company. It can be accumulated on every dip in the stock price or weakness in the market for long term returns. It being index heavy weight, will play an important role in the days to come, when the long term view on the market is positive and direction Up!
The day's range for Nifty shall be 4320 (Support) and 4420 (Resistance); Sensex shall be 14650 (Support) and 15050 (Resistance)
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