"Markets opened firm and traded strong in positive territory through out the session, Nifty made a new high and Sensex missed it by 3 points; It was an all time ever closing for the indices, and inspite of Nifty futures discount trading at a discount of 5 to 8 points during the session the final closing is just 2 points as it closed in the earlier session. This gives that there are no shorts in the system, nor there is euphoria at these high levels. Most of the traders are creating positions intra day and squaring off before the end of the session.
Technology sector is once again beaten out of shape, especially Infosys inspite of strong close in the markets. Rupee strengthening beyond 40.20 has attracted intervention by RBI and it touched 40.70 intraday. Exporters are the worst effected and exerting pressure on the government through the commerce ministry, where it is felt that export target may fall short of expectation if some mechanism is not evolved to defend the currency. Under these circumstnces, it is obvious that some measures shall be initiated which will either compensate exporters or stop further strengthening of rupee. BPO industry which is major employer is forecasting that about 275000 jobs will be lost if rupee were to breach 40 mark. There are feelers sent to the government and market that lay off may be there to protect margins by exporters and BPO industry.
US markets created history and closed very firm on better retail sales numbers and also slurry of M&As being reported by major companies. Today the inflation data shall be released at 12 noon, which might show further firming up. Crude is trading abvoe US $ 73 on supply concerns. Our markets shall open firm with a gap and will make new highs is foregone conclusion at the opening trade itself and since we are in stretched territory, how much profit sales shall be there can be anybody guess. The momentum is in favours of bulls who are in full command for the present, and buying on intraday weakeness should be the strategy for traders. It is advisable to hedge the portfolio by going long 4500 puts when market approaches this level, since already the nifty is up by more than 6% from previous settlement.(4282 on 28.06.2007)
The day's range for Nifty shall be 4365 (Support) and 4530 (Resistance); Sensex shall be 14800 (Support) and 15400 (Resistance)
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