"Our markets followed overseas cues and gap down opening brought the indices closer to sub june closing levels, which immediately attracted fund buying. The indices though traded in negative territory throughout the day and closed negatively at the end of the session, closed above June closing levels, is a comforting factor in the short term. FOMC meeting is scheduled tonight might announce some consoling measures is the expectation which lead to equal recovery of losses suffered on last friday in US markets overnight. What FOMC delivers can be anybody guess, and one has to be cautious on such speculation, in building positions.
Our markets looking for a reason for correction, after a spectacular rally has found, one in the US sub-prime issues, and are dancing in tune with US markets and other asian peers, since FIIs are the major players, while retail and domestic institutions are making limited purchases looking for reversal of trend signals. It is now Technicals more than the fundamentals at play, as very good news from a company, or for the sector is not being discounted by players and stocks continue to fall due to selling pressure.
We will have a definite gap up opening is a foregone conclusion, but selling might emerge at higher levels in the afternoon, a head of FOMC meet, but stability shall return to the markets for the day. One may liquidate the profitable long positions on rallies and purchase 4500 puts in August series as hedge for the portfolio.
The day's range for Nifty shall be 4304 (Support) and 4488 (Resistance); Sensex shall be 14720 (Support) and 15333 (Resistance)
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