"Our markets are in such a strong bull hold that gap up openings and making new highs, creating history on volumes, prices have become order of the day since 18th sept' 2007. The performance of indices is stupendous during this week, though we thought correction might set in since the rally is 7 weeks old. Corrections have become intra day affair, as left out feeling is clearly visible in the buying support that emerges on any slight dip or weakness, intra day. The performance of oil and gas sector, Telecom and Infrastructure are responsible for the strong rally. Banking and Technology sector also joined the party lately. Though the long term trend is very much intact, we are reaching levels of 'irrational exhuberance' as prices of some stocks and sectors start discounting the future earnings of 2009 and 2010 , while we are yet to know the Q2 performance. Investors need to have patience to wait for corrections and enter on dips in growth stories of blue chip stocks only, to avoid any capital loss in these times of contradicting clues.
Dow closed in negative territory, where as Nasdaq (which is tech heavy) made new high and closed in the positive territory. Infosys Q2 results, their guidance and outlook on US economy shall give an indication on the performance of tech sector in general. Rupee at 39.30/$ levels and threatening to touch 37/$ by year end, if the inflow of dollars continue at this pace, puts pressure on rupee earnings. How the company positions to face this situation, which likely to be certain, will decide the performance of the stock from here on.
Infosys technically gave a break out at 2040. Long term investors can buy the stock on dips as it is the leader in sector in small quantities.
Strategy for the day: Buy Nifty 5250 calls on weakness and 5550 puts on rallies for quick returns in day trading.
Support for Sensex shall be 18000 and Nifty 5250 for the day.
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