"Markets have turned volatile as predicted yesterday, after reaching 4550 (Nifty) and 15540 (sensex); late buying in select index stocks save the day, finally indices closing flat to positive teriitory. Indices are making lower tops and bottoms on daily charts which is negative sign for short term correction or sideways consolidation. Nifty futures discount stands at 18 points on adjusted basis points out that shorts are not out of the system, which are created on 13th and 16th. However, the same shall cushion the weakness in the markets, as it is a running correction which is natural in long term bull markets.
Wipro shall announce its results today before opening of the markets, and expectations are muted so much fire works need not be there on the stock or sector. Satyam will be tomorrow with which more or less all tech biggies should have done for the quarter. Any weakness in the stocks of techies or overall market, presents good long term portfolio builiding in the sector, since this sector is the major job creator in the Indian economy, and comapnies have learnt to tune to the vagaries of currency fluctuations, and in times to come, will put in place the hedging mechanism to offset losses.
US markets tanked initially overnight, on the remarks made by Mr Bernarke on the concerns affecting the economy, such as subprime issues, energy prices and slowing of economy. Inflation being the main target for the Fed chances of reducing interest rates in the coming FOMC meeting are blurred at present, which forced investors to press for sales, as Dow toched record high above 14000 recently. Weakness in dollar and slowing of US economy will make funds to look at emerging markets, which are performing well, as liquidity is high in the world over at present.
Roll over of positions from July series to August shall have commenced and will pick up from now on, which provides huge volatility as the open interest positions are above Rs.80,000 crores. Markets will have sideways movement with downward bias till settlement of this series on 26.07.2007 and shall resume the upward journey from there on.
The day's range for Nifty shall be 4400 (Support) and 4550 (Resistance); Sensex shall be 15000 (Support) and 15450 (Resistance)
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