" Markets have turned quite volatile during this week as expected, since huge outstanding open interest posititions are to be rolled over to August series. Overseas markets, especially US markets created history, by recording all time highs, are volatile. July series are behind us now and our markets have crossed 1,00,000 crores total turnover on a single day, due to volatility in the past 3 days. On a closing basis indices have closed at top end of the range, especially nifty closed around 4620 thrice during this week itself, shows strength of bulls who are keeping the indices in bull phase, by rotating sectors and stocks, which is quite heartening for our markets, in spite of heavy melt down in over seas markets.
US and Eurpean markets were quite down overnight, which will give phillip to bears and Nifty futures discount in August series now stands at hefty 42 points confirms negative gap down opening for our markets, is a foregone expectation, and what happens in next 15 minutes gives the clues for the day trading and out look on this series. Inflation data shall be released around 12 noon, and Index heavy weight Reliance Industries results are slated for 28th. RBI's credit policy announcement on 31st are the important events to decide the short term of our markets. Previous week closings of Nifty( 4566.05) and Sensex(15565.55) will act as immediate supports for the initial weakness in the markets, and trading below these levels with volumes invite bull unloading and further weakness if any, will invite margin calls from brokers and exchanges, which can cascade the fall, due to large open interest positions and some sort of complacency is setting in, slowly with retail and institutional players too back home, that we are insulated from what happens elsewhere. One thing we need to remember is that we are integral part of world markets, and FIIs are the major players in our markets. Though FIIs are buyers for the past 5 days Domestic Institutions are net sellers, though marginally, gives an indication of distribution cum sideways consolidation scenario for August.
In such scenario going long on strangle of 4600 calls and 4500 puts shall be the safe strategy for this series.(August)
The day's range for Nifty shall be 4480 (Support) and 4650 (Resistance); Sensex shall be 15200 (Support) and 15900 (Resistance)
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