Outlook for Friday - Nifty breaks 5000

"It is one  of the historic day for our indices, since Nifty crossed and closed above 5000 for the first time ever, simultaneously Sensex closed a 17150, with one of the largest trading volumes on a settlement day. September has been very rewarding for investors, as markets world wide moved very strong and fast after Fed decision to cut rates by 50 basis points on 18th; With settlement being over smoothly, rollovers also healthy, now the expectations on the Q2 performance will be priced in from now on, and markets will reward the performing companies and punish the ones which fail on guidance and also unable to meet expectations. Thus, lot of churning of portfolios to take place, pricing in further rate cuts, econonomic performance, political risk/situation etc., which will provide ample volatility in the days to come. Nifty futures closed at 8 points premium to the spot, presents bullish outlook for the day. Today is the last trading day for the week, month and quarter and how the indices close will present the indication for future trend, in our view it would be "up" only.

 

US markets closed postiive, and Asian markets are trading negative to flat in opening trade, our indices might face resistance today at higher levels, as next week is a truncated one, and profit booking can be expected, bringing 2 to 3% fall indices today or on monday, which should provide good buying opportunity, for long term investors. FIIs have been net buyers in our markets for the past 10 days on margin against DIIs who are net sellers, keeping the upward momentum of the indices so far. The larger traded volumes per day, while indices make new highs daily is welcome feature, the market breadth is generally negative as retail investors are booking profits around 17000 (Sensex) and 5000 (Nifty) is a discomforting feature.

 

No doubt that we are in a long term bull markets, however, even running corrections whenever happen will be sharp, swift and sudden, so entering markets with leveraged funds, should be avoided from here on.

 

Since the indices are in an unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on:

 

 Short term support for Nifty shall be 4940- 4880-4760-4678-4648-4564-4530-4480 and for Sensex shall be 17000-16876-16500-16135-15950-15870-15600-15485

Outlook for Thursday - Sensex Breaches 17K

"Our indices amidst high volatility recorded new highs, on high momentum, inspite of flat to negative performance of asian peers yesterday and in the process Sensex created History by breaching 17000 intra day. Nifty found resistance at 4980 on several attempts and rollover caused last minute sell off, which made indices to close flat to marginally positive. Nifty futures are at hefty premium for Sept (18 points) and October series too have 8 points premium suggests that the rollover is smooth so far and shall be completed with positive bias.

 

US markets closed firm overnight and asian markets to follow suit, should augur well for our markets to open gap up and trade firm in the first session. Post sun outage trading, markets shall be volatile and Nifty shall have its turn to kiss 5000 in the process. The momentum being on its side crossing 5000 and closing above it on a settlement day may also need not be a surprise too, if it happens. One can look at technology sector on weakness in the market, as they will be coming out with the results in October. Further rally in the markets should be with the participation of Tech sector and other rate sensitives, as expectation of rate cut by RBI is too being factored in by market players, during the credit policy to be announced in October, or even before it, to help and sustain economic growth momentum.

 

Strategy for the Day: Buy 4900 calls on weakness and 5000 puts on rallies in September series and book quick profits, as it is the last day of the settlement.

 

Since the indices are in an unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on:

 

 Short term support for Nifty shall be 4880-4760-4678-4648-4564-4530-4480 and for Sensex shall be 16715-16500-16135-15950-15870-15600-15485

Outlook for Wednesday - Settlement jitters

"Our markets are in the strong bull grip and inspite of running correction, continue to make new highs ever since bullish breakout happend on clearing previous highs. Since this is settlement week for september series, volatility increased, as anticipated, the volumes per day are now averaging 1,00,000 crores is an indication of greater participation. The outstanding positions have crossed 1,00,000 crores, is being viewed as a concern, by many analysts. Here one has to remember that number of scrips included in derivatives has increased on one hand and at the same the prices of the stocks having derivatives contracts also gone multifold. Nifty futures have closed at 5 points premium to the spot indicates bullish outlook to continue for some more time.

 

Nifty having run up quite fast and furious is facing resistance around 4950, as we are in settlement week, however, 4880 support is held in volatile trade on tuesday. Thus, Nifty might trade in a range of 4800 to 5000 for some time, consolidate and take a cue from the results which start pouring in from 2nd week of October'2007 onwards. RBI has liberalised the Foreign Exchange outflows norms with immediate effect, yesterday, after market hours. Now, an individual can remit upt 2,00,000 $ every year (an increase of 100% over previous limit); corporates can repay ECB upto $500 million without RBI reference. Mutual Funds can invest upto $5 billion overseas. All these measures will ease the pressure on rupee which is appreciating very fast, breached 40 mark and threating to appreciate further, as overseas flows are on high since the US fed cut its rates on 18.09.2007.

 

Strategy for today and tomorrow: Buy 4800 calls on weakness and 5000 puts on rallies to capture intraday volatility and book profits quickly.

 

Since we are in an unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on:

 

 Short term support for Nifty shall be 4760-4678-4648-4564-4530-4480 and for Sensex shall be 16500-16135-15950-15870-15600-15485

Out look for Monday and Week - Volatility to continue

"All markets world wide have posted substantial gains during last week, on the back of US FED cut of 50 basis points interest rates in FOMC meeting on 18th, our indices, have posted new highs daily from there on after a clear bullish breakout, and closed at all time high close for the week and day on friday. Nifty futures closed at substantial premium due to spot at 15 points in current series and October series have just 5 point discount, shows that lot of short squeeze took place, along with addition of net long positios in next series. Roll overs have begun, and one of the largest outstanding positions roll over to October series, will provide huge volatility this week. The daily turnover on our bourses for the previous 3 trading sessions averages above Rs.90,000 crores, point to greater participation, and adventurous shorts during the day being reversed in the last hour, since the strength in the markets force the day traders to cover.

 

The indices are posting new highs for the past 3 days,  inflation was lowest, and rupee is strong, all point to continuation of interest in our markets by FIIs. The current bull run in 2007 on and off happening, is due to participation of select index heavy weights..viz., Reliance group, Engineering & Construction sector, Banking & Cement sectors. While these stocks are posting new all time highs, Technology sector, is posting new 52 week lows, due appreciation of rupee, and on concerns of possible US recession. FMCG and Automobile sectors which are rate sensitive are also under performers till now. All Technical analysts proved wrong by calling that August lows will be tested sooner than latter after touching previous highs. Further rallies in the markets in our markets might induce the fence sitters, and retail to jump into the fray, due to impatience, and over exuberance can be expected in the days to come. This being the settlement week, volatility shall be high. One need to be suitably  hedged on the market to protect portfolio, due to any reversal of the trend, as markets always react suddenly and sharply in long term bull run.

 

Strategy for the Week: One can go long on 4700 calls on weekness and 4900 puts on rallies in current series, and book profits quickly without waiting till the expiry on 27.09.2007.

 

Since we are in an unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on:

 

 Short term support for Nifty shall be 4678-4648-4564-4530-4480 and for Sensex shall be 16135-15950-15870-15600-15485

Outlook for Friday

"Our markets were volatile , and indices have made new highs, traded range bound, as roll over positions to October series commenced, finally closed positive. Asian markets also are rangebound, and US markets are marginally week, Nifty futures almost on par with spot, as September positions are being rolled over to October Series.

 

By about 12 noon inflation data shall be released, rupee breached 40 mark and traded below it for most part of the day, due huge inflow of dollars, in portfolio funds. Technology sector and export oriented companies shall feel the pinch in this quarter, RBI seems to be supporting 40 mark, to save the exporters. Markets will be volatile as huge positons need to be rolled over to next series. Any correction, will be a running correction in long term bullish trend confirmed on 18th, and the previous highs (Nifty..4647 & Sensex..15869) will be supports to make purchases for good returns in the medium term.

 

Since we are in an unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on:

 

 Short term support for Nifty shall be 4678-4648-4564-4530-4480 and for Sensex shall be 16135-15950-15870-15600-15485

 

Outlook for Thursday - Indices create History

"What a party on dalal street, 18.09.2007 will be remembered for posting highest single day gain on the indices for our markets so far; Our markets opened with huge gap and went on strength to strength due to short squeeze, and buying propelled by FIIs, who have pumped in about 2450 crores of rupees yesterday itself (provisional figures) and indices have cleared previous highs in one go in style, also closed at the upper end of the trading range for the day. This is a clear bullish break out, as the turnover also supports the momentum. Now our markets are in new zone, and every dip is a buying opportunity, for long term investors.

 

US markets closed firm and added gains for the second day, inspite of noices that the economy may be slowing down, which can be known in the weeks to come and on knowing the second quarter performance of financials in October. We are in for volatile times, as FII flows find their way to our markets, in to select blue chips and sectors, and the domestic institutions and retail investors, are sceptical about the political risk impending, petroleum products price hike, and appreciation of rupee are hurting many sectors and companies. As long as indices continue to post new highs, which might continue till the first set of results are out in October, one has to be positive on markets.

 

Since we are in to unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on;

 

Short term support for Nifty shall be 4678-4648-4564-4530-4480 and for Sensex shall be 16135-15950-15870-15600-15485

 

Outlook for Wednesday "Bernarke surprises every analyst"

"Our markets were volatile a head of important FOMC meeting, and around noon, when European markets opened positive, and were trading firm, US futures turned positive, may be smelling the outcome, due to short squeeze our indices closed firm at the upper end of the trading range. Nifty closed firmly above july closing of 4529 for second time during this month, and with US markets rallying on FED cutting interest rate by 50 basis points to 4.75% and also further keeping the discount window at 50 basis points penalty was a clear surprise, and naturally Dow has posted one of its largest gain since 2002. 

 

Nifty futures closed at a premium of 3.60 point in current series, with asian markets rejoicing the passage of an important event, which is equity market friendly, our markets will have gap up opening, and Sensex shall challenge the previous high today is certain. Now our markets shall concentrate on corporate performance, political risk, and expectations on interest scenario, as major banks are already voicing concerns on slowing of credit off take. Though the inflation is coming down regularly the Crude hovering around $81, the sensitive issue of increasing the prices of petroleum products, might come any time, which shall be a dampner for automobile sector and also manufacturing sector.

 

We feel that we are in for long phase of volatile times, may be for few months, which provide opportunity for traders, if they have right strategy. One can go long on 4500 calls of October series and 4650 puts and hold them for 15 days, for reaping in substantial returns.

 

The day's range for Nifty shall be 4530(Support) and 4646 (Resistance); Sensex shall be 15485 (Support) and 15950 (Resistance)

 

"All eyes on FOMC meeting"

"All markets turned volatile and closed marginally negative on monday, which is quite natural a head of an event, which will  decide the course of US markets and indicates the state of US economy." Mr.Bernarke is caught between the devil and the deep sea and has to make a tight rope walk, as cut in interest rates gives phillip to equity markets, at the same time when inflation surges, economy may get affected. There is another nervousness, in the minds of US investors that whether really US economy is on its way to "Recession" which is being often spoken by all time greats like, Mr.Alan Greenspan, Dr.Marc Faber etc.,

 

However, coming to Indian story it is very well intact, which is confirmed by good advance tax numbers revealed so far, RIL and Gujarath Ambuja have paid more than 45% year on year, while banks have mixed performance. This gives the hope that the Index heavy weights RIL and Cement sector performance is in tact, should augur well for our markets and indices. Once the FOMC event is out of the picture, our markets will concentrate on the corporate performance, which will be revealed in few weeks, the only caveat is brewing "political risk". The track record of Left parties, assures us that they will help in the volatility, but do not destabilize the government on their own. None of the parties are ready for a snap poll as on date. But certainly there will be a mid term poll, as it would be difficult for the present government to pull and complete term with both parties taking their stance firm and are very clear on their azenda.

 

Thus, investors and traders should be prepared for a period of volatile times, in the process, making new highs may not confirm the on set of new bull run which we have seen for the past 4 years.

 

Strategy for the day: buy 4400 calls on weakness and 4500 puts on rallies for today and carry the position for tomorrow to reap in substantial profits.

 

The day's range for Nifty shall be 4416(Support) and 4545 (Resistance); Sensex shall be 15155 (Support) and 15777 (Resistance)

Outlook for the Week

"Our indices turned volatile on friday in the afternoon, due to profit booking at higher levels on week end considerations, and also as subprime issues are cropping up in Europe also, due to which FTSE opened down. Inflation data showed lowering to 3.52 (lowest in the last 17 months)however, since the most of the prices are administered, do not reflect the factual position. Though the indices have ended negative for friday, they posted marginal gains on week on week basis 4th week in succession. 5 being fibonacci number, and important events are scheduled during this week..viz., FOMC meeting on 18th, Left parties meeting on 19th, and the new controversy developed on the affidavit filed by the government of India in Supreme Court on "Ram Sethu" shall keep the nervous ness on the street.

Best strategy is to stay away from the markets for this week, as the volatility shall be very high, Nifty is yet to close above July closing which we have been mentioning for quite some time, though sensex is able to manage to close above 15551. Advance tax payments due by 15th september will be known today onwards, and stock specific movement might continue, till the passage of the above events and clarity emerging on interest rates, credit crisis, political risk etc.,

Nifty might trade between 4350 to 4650 in extreme circumstances, and long term investors can buy blue chip stocks on dips below 4400 for substantial returns in the coming three months. One can consider buying 4500 straddle in current series for catching intra day / week volatility and make quick gains.

Outlook for Friday

"Our markets  were volatile and closed in positive territory at the end of the session. One postive feature is nifty also closed above July closing along with Sensex after a long time, ever since the correction began. Huge short covering in Nifty futures brought the discount to just 1.60 points to the spot. US markets closed firm on the expectation that FOMC meet would certainly cut the interest rate in the ensuing meeting, only the difference of opinion on the street is on whether it would be 50 basis points or 25 basis points in this month.

 

Inflation figures to be released at 12 noon today also are being estimated to be lower than last week, thus, our markets shall open firm and trade firm, and they are able to close above july closings today finally, we can presume that the correction is complete at recent lows and indices will march a head from next week to challenge previous highs.

 

One needs to have positive view on our indices, especially as this quarter will be a good one for corporates, and if the same is indicated by higher advance tax payments by 15th sept, the data which will be known by monday, our markets will be out of woods.

 

The day's range for Nifty shall be 4464(Support) and 4575 (Resistance); Sensex shall be 15485 (Support) and 15777 (Resistance)

Reg: Outlook for Thursday

"Our markets opened positive but traded volatile in narrow range and closed in flat to marginally negative territory. Similar pattern is observed in all markets except Nikkie where the political development, brought some selling on uncertainity. As markets do not relish uncertainity from any corner. Nifty is clearly consolidating in a broad range of 4450 to 4550 for the past one week, break out from this range of after the passage of the event, FOMC meeting on 18th sept'07, and outcome, which is being eagerly awaited by all funds and institutions, to take a view on US economy, current financial mess, exchange rate. will decide on the flows to equities and emerging markets like India.

 

Our view is our economy being in strong position, with GDP growth rate above 8% consistently for past 2 years, and with no signs of any unstablility on this front, and our currency (rupee) being free from any hiccups, as REER is adopted by RBI, which encourages investment in our economy.

 

Power Grid Corporation IPO is a good bet for retail investors, looking for long term capital appreciation. One can consider subscribing at cut off price of 52, today is the last date for subscription.

 

The day's range for Nifty shall be 4412(Support) and 4550 (Resistance); Sensex shall be 15155 (Support) and 15777 (Resistance)

Outlook for Wednesday

"Our markets have become volatile once again as anticipated, and closed in negative territory. Interesting feature is inspite of weak global cues buying support is evidenced around 4464 on nifty which was August closing. Sensex is able to manage close around July closing of 15550, which indicates that bulls are having upper hand, and once the FOMC meeting, event is passed without hiccups, our indices shall resume upward journey to post new highs.

 

U.S. markets closed firm overnight, and asian markets are trading in positive territory, which shall strength to bulls to press for purchases, which will give gap up opening, and Nifty once closes above 4530 for this week, the volatility will come down and it shall challenge previous high 4647 in due course.

 

One can go long on November futures of Nifty, which are trading at huge discount, duely hedging the same with sept put options of 4550 and roll over the positions till the 5000 target is achieved, could give substantial returns, instead of day/week trading, where lot of skill is required.

 

One can accumulate UCO bank above 40 for a target of 59, as they are planning FPO shortly.

 

The day's range for Nifty shall be 4400(Support) and 4550 (Resistance); Sensex shall be 15055 (Support) and 15777 (Resistance)

Outlook for Tuesday

"Our markets though opened gap down initially, buying support and short covering at lower levels helped indices to recover the losses by the end of the session, and finally indices have closed flat to marginally negative. Overseas cues are not indicative of any direction, as such our markets also move sideways in and around these levels for some more time, may be till the FOMC meeting scheduled on 18th, and take a direction from there on.

 

Generally, the correction seems to be over, markets once build a strong base between 4400 to 4550 on nifty; the next target on nifty shall be 5000 on crossing 4678, by year end. One can go long on November futures of Nifty, which are trading at huge discount, duely hedging the same with sept put options of 4500 and roll over the positions till the 5000 target is achieved, could give substantial returns, instead of day/week trading, where lot of skill is required.

 

The day's range for Nifty shall be 4400(Support) and 4550 (Resistance); Sensex shall be 15055 (Support) and 15777 (Resistance)

Outlook for Monday and This Week

"Our markets continued upward journey on friday and closed positive week on week, though marginally were negative on the last day of the week, due to profit booking. The upward momentum is facing resistance at July closings as predicted, and due to headline supply, markets turned volatile on friday, inspite of inflation data released was the lowest in the last 16 weeks 3.79%. Once again domestic political situation is heating up with the debate on the Indo-US nuke deal being discussed in both houses of parliament, the opposition being faced by ruling UPA government, from its supporters (Left parties) is likely to send jitters among overseas investors. US markets tanked on friday on the signs of slow growth in GDP or recession, being felt on the lowest employment data, inspite of improvement in manufacturing data released earlier. Number of jobs are being cut where companies are exposed to subprime lending which may add the negative sentiment further. FOMC meeting scheduled for 18th is another important event which will give an indication on how the current crisis will be handled by Fed in the days to come. Gradually risk aversion is creeping into the minds of investors, Technically 13500 on DJI proved to be a stiff resistance.

 

This week is quite crucial for our markets, as there shall be some selling to book profits by corporates for meeting advance tax payment by 15th September. Gap down opening on our indices today is foregone conclusion as Nifty futures discount widened to 32 points from 8 points previous day, indicate build up of short positions. The question is whether the rally was a relief rally and the down ward move continues for retesting recent lows made on 17.08.2007(13779.88(Sensex) & 4002.20(Nifty) or support comes around 50DSMA which stands at 4396.75 (Nifty) &15057.91(Sensex) is to be watched. If these levels are held during the selling / weakness which will be there during the week, our markets would be out of woods and shall continue their upward journy from next week onwards to test all time highs.

 

In the long term view, Indian markets shall perform well however, with volatility, long term investors can accumulate Technology stocks on any weakness, since this quarter shall be better quarter compared to the first quarter. Staying in cash shall provide great opportunities for building good portfolio in the indecisive times.

 

The day's range for Nifty shall be 4400(Support) and 4550 (Resistance); Sensex shall be 15055 (Support) and 15777 (Resistance)

Outlook for Friday

"Markets have opened gap down as expected, on weak global cues, and recovered within minutes as done by asian peers, on emergence of buying at lower levels. Though the indices traded for most part of the day alternatingly in negative and positive territory heavy short covering lead to sensex closing above July closing, though nifty is just shied away from closing above it. Nifty futures discount reducing from 45 points to just 17 points due to addition of some long positions too. Generally it is being believed that some sort of decoupling of asian economies is beginning to happen from US; However, the issue of credit issues and subprime, economic slow down which are main worries being faced by US, shall also affect the Global economy too.

Our markets are showing a divergence, as Sensex with change in composition due to addition of NTPC in its composition is able to move above July closing of 15551 where as nifty is yet to clear 4529 and close above it. Today is the decisive day, being week end where inflation data shall be released at 12 noon, whether followup buying lift the indices firmly above July closing and give a firm closing of the day/week so that the break out can be confirmed for initiating confident long positions on Nifty in this series as the markets would confirm coming out of trading range since the correction began on 25.07.2007. Domestic political situation is once again getting warmed up with NDA insisting on JPC on Indo-US Nuke deal issue, while UPA lead government saying no to it. The discussion is on in Rajya sabha today and it will be on 10th in Lok sabha. We feel volatility shall continue till 18th and there after what FOMC decides to do with interest rates, as the current stability witnessed in US markets is based on expectation of a definite rate cut of 50 basis points now total 100 basis points by year end.

The subprime issue is not resolved completely, and the credit issues are yet to be addressed, the financial companies performance in this quarter and statement of losses they might post on these issues will make markets to adjust to the reality situation by October end, when the performance of all these companies will be known, from the quarterly performance results made public.

Strategy for the day: Buying 4500 straddle on October Series and selling 4300 put and 4700 calls (strangle) will give opportunity to catch the volatility in either direction with minimum investment.

The day's range for Nifty shall be 4420(Support) and 4550 (Resistance); Sensex shall be 15055 (Support) and 15777 (Resistance)

Outlook for Thursday

"Markets have turned volatile on wednesday and finally closed marginally negative on average calculation of indices; There was late sell off on smelling bad news from overseas markets and Nifty futures discount almost touched 60 points in the last minutes of trade, indicating creation of huge short positions. Nifty was unable to clear 4500 firmly though 3 attempts were made in the last 2 days by bulls to keep the momentum. Our view that July closings shall offer stiff resistance is being validated and shall be confirmed today, based on US markets sell off our markets will have gap down opening and how far selling continues, due to distribution and at what level support emerges is a big question.

 

The first support comes at 4390 on Nifty which 50 DSMA and failing which the correction can deepen upto 4100 which is currently 200DSMA. Traders need to be extremely careful, as news is becoming murky once again from overseas and on domestic front too. RBI has come out with new norms on Asset Liability Management for the banks, which shall tighten the money from the system.

 

Strategy for the Day: Sell October 4500 calls on rallies and buy Sept 4400 calls on weakness creating a 'calender spread'

 

The day's range for Nifty shall be 4380(Support) and 4530 (Resistance); Sensex shall be 15055 (Support) and 15599 (Resistance)

Outlook for Wednesday

"Markets opened firm with a positive gap and traded volatile, though in a narrow range and closed positive to flat at the end of the trading, registering 8 sessions of positive closing continuously. Absence of cues from US on account of Labour Day Holiday, and lack of conviction to make follow up buying, and absence of big ticket selling suggesting that markets are in consolidation mood at higher levels, before making the next move up or down.

 

US markets closed firm overnight and our indices are approaching July closing levels which shall offer stiff resistance, and profit booking can be expected today. Nifty futures discount 37 points for the current month, indicates short positions, may be a hedge to protect the portfolios on any sudden fall or reversal trend, by institutions. Resistance and supply zone from trapped investors can be expected in the area of 4530 to 4550 in this up move. One needs to be cautious in taking long positions, if one is a short term player.

 

Buying 4400 calls on weakness and 4500 puts on rallies shall give quick returns for intra day / overnight positional traders.

 

The day's range for Nifty shall be 4380(Support) and 4550 (Resistance); Sensex shall be 15155 (Support) and 15777 (Resistance)

Reg: Outlook for Tuesday

"Markets opened positive and traded in a narrow range and finally closed positive for the day. Indices have posted gains for 7 successive days and 8 being fibonacci number correction can be expected on profit booking. US markets were closed yesterday on account of Labour Holiday, and absence of cues from that end, kept the direction indecisive. Now Both Sensex and Nifty are approaching July closings ..15550.99 & 4528.85 which are stiff resistances, if crossed with volumes and all round participation then our markets shall rally to post new highs quickly. Bullish tone continues since bullish cross over is completed with yesterday's closing (Short term averages over taking Long term averages)

 

Asian markets were weak to flat yesterday, and currently US futures point to marginal negative bias, which might invite profit booking in our markets. However, as intermediate trend and long term trend are up, one can buy on dips in technology sector, which will catch interest of partipation of institutions and retailers as they are under performers so far in 2007.

 

The day's range for Nifty shall be 4380(Support) and 4530 (Resistance); Sensex shall be 15155 (Support) and 15555 (Resistance)

Oulook for September '07

"Our markets have ended on strong positive note, as the political tensions domestically eased somewhat, owing to some understanding reached between ruling UPA and Left parties on Indo-Nuke deal, and also global cues supporting as stability returned to US markets, with the assurances made by Fed Chairman and President Bush last friday. Our markets have closed positive for the week, week on week basis for the second week in succession, and August monthly closing was higher than June closing for the indices, though lower than July closing.

Price wise correction started from the recent tops made in July (on 25.07.2007) seems to be over, as bullish cross over is observed in both indices(short term moving averages slowly overtaking the long term moving averages) but still time wise pain may be still left; thus, leaving the markets in volatile mood for the first fort night of this month. The events scheduled during the month, which might influence market sentiment and movement are: Information on advance tax payments by corporates by 15th Sept'07, FOMC meet on 18th Sept'07 would influence markets in general. In our view, September month might post gains over August closings as the second quarter results would start poring in October'07 from second week onwards.

Technology sector which is quite beaten, and seen major sell off should look up, as rupee started appreciating and generally this quarter is a good quarter. The news that infosys is increasing its billing rates by 3 to 4 % for new clients and 2 to 4% for existing clients should help in margins and bottom line. Thus, TCS, Infosys, Wipro and Satyam can be accumulated on every dip for good gains. Technology sector should take the leader ship from now on if indices have to post new highs, and change the sentiment to positive inviting all round participation.

Strategy for the Month:

Go long on September 4400 Calls and October 4300 puts for good returns.

The month's range for Nifty shall be 4320 (Support) and 4645 (Resistance); Sensex shall be 14500 (Support) and 15950 (Resistance)