Outlook for Friday " Infosys delivers what promised - market not amused"

"Our markets awaiting Infosys results, and market men expecting moon from the company, inspite of strong rupee appreciation, when the company delivers splendid performance, and meets guidance, the stock and the sector is beaten down by 7% yesterday. The tech sector performance brought the volatility on the bourses for quite some time, and with the help of infrastructure, Oil and Gas sector, the indices posted new highs, and closed firmly at the higher end of the trading range, due to last hour short covering. Nifty futures closed at whopping premium of 20 points confirms the euphoria among investors adding long positions, throwing the caution to winds.

 

Infosys broke below 2040 which is the trend decider level, and shall be under performer as long as rupee appreciates during this quarter, and since they have a hedge of $1.4billion at Rs.39.50, any strengthening of dollar or weakening of rupee above this level, shall be good news for the company. Long term investors can consider accumulating the stock in small quantities, on every dip, as the long term growth story of the company, sector, and Indian economy continues to be strong.

 

US markets opened strong and closed in the red at the end of the trading, on disappointing data, shall bring in volatility and a gapdown opening for our indices too today, the inflation data to be released at 12 noon holds the key for final closing for the day. However, the indices are likely to close postive for the week, as the rally in past three days gave substantial gains, and profit booking on week end considerations can be common phenomenon.

 

Strategy for the day: Buy Nifty 5300 calls on weakness and 5550 puts on rallies for quick returns in day trading. 

 

Support for Sensex shall be 18200 and Nifty 5300 for the day.