Outlook for Friday - Power Grid lists today

"Our indices opened gapdown, taking global cues in their stride, and were volatile during the entire session, finally Nifty closed almost flat, where as Sensex posted minor losses after a dream run for 10 days, registering whopping 2342.61 points raise from 18th sept'2007 onwards unabated. We indicated that the correction is around corner in yesterday's posting and the confirmation of the same shall be known by today's trading, volumes and closing. One needs to be very cautious, in adding stocks at this juncture, as singals of impending correction are visible, the political situation, strengthening of rupee and measures to be initiated by RBI, Infosys results to be released on 11th are some important events / cues to be taken care off.

Though there is a serious requirement for CRR hike for sucking the liquidity in the system, Finance Ministry and RBI chose to raise the MSS limit from Rs.1,50,000 crores to Rs.2,00,000 crores, to face the gushing inflow of US dollars, in to capital markets. Banks are finding quite difficult to increase the credit portfolio, and are seeking reduction in interest rate from RBI, as they cannot reduce the interest rate on deposit rates at the current juncture, when capital markets are so strong, there may be diversion of funds by investors, as returns are instantaneous and quick now a days in capital markets. Inflation data shall be released at 12 noon, and week end profit booking might keep the indices in a trading range for the day.

Nifty Futures closed at a premium of 5 points to the spot yesterday, indicating positive bias, however, initiation of short position around 5250 levels may not be ruled out. Nifty might trade in a range of 5000 to 5265 and consolidate before the next move.

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:

Support for Nifty shall be 5100-5000-4940- 4880-4760-4678-4648-4564-4530 and for Sensex shall be17480-17160-16876-16500-16135-15950-15870-15555