"Both indices have touched new highs and were volatile as predicted, and closed in negative territory at the end of the session, showing tiredness of the rally. Nifty futures discount increased to 26 points from 14 points as of 9th indicates creation of short positions, which can be expected before an important event, i.e., Q1 results of Infosys Technologies and thier guidance for the year + outlook for the future, in view of continued strengthening of rupee, slowing down of US economy etc.,
There is consensus on reduction on earnings to be reported, there is no doubt that margins are under pressure; So far Infosys always met their guidance and in fact surpassed number of times. This time too we hope that they deliver what they anticipated and estimated. Whether they match the market estimates or expectations is the issue. Technology sector in particular is under performer so far, and would lead the rally if there is positive surprise from the company on all fronts, when they announce the results before market hours and discuss the details during the market hours.
Markets being at the upper end of the range and rally is 4 weeks old now, markets might correct substantially from these levels, as it is appearing top heavy. One should book profits and stay in cash at least 25% of portfolio to re enter on correction which might be 5% from top on indices. Buy 4350 calls if market opens in negative territory and 4450 puts in case it opens positive and trades firm, as volatility will increase and indices might close negative for the week, on profit booking.
The day's range for Nifty shall be 4320 (Support) and 4444 (Resistance); Sensex shall be 14650 (Support) and 15150 (Resistance)
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