"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)