"Outlook for the Week "FOMC meet on 11th holds key for Markets"

'Our indices have posted gains during last week, amidst huge volatility at psychological levels of 6000(Nifty) & 20000 (Sensex); as investors preferred booking profits, and wished to stay in cash, with the past experience, markets turning weak, number of times. However, Both Nifty and Sensex have closed above October closings on friday, while nifty closed at all time highest closing, confirms strength in the markets. Nifty posted new highs successively after breaching previous high, while Sensex is struggling to close above 20K. US markets are expected to react to the FOMC meet decision on 11th on interest rates, Discount rates, and out look on economy to be revealed by Mr.Bernarke, chairman.

This week is important for our markets too, as corporates would be pressing sales on investments for raising liquidity for meeting Advance Tax payments, by 15th December 2007, for this quarter. We can expect huge volatility on Nifty, as the outstanding positions are high, and information flow from overseas as well as domestically, can influence the markets in either direction. Nifty might trade in a broad range of 5850 to 6050 during the week and break out in either direction, with volumes decides the short term trend, while the long term and medium term trend are firmly positive for our markets.

Strategy for the Weak: Buy 5750 calls on weakness and 6050 puts on rallies for quick returns.