Roll overs to next month series begin - Volatility to increase

Our indices have very easily breached number of technical support levels, yesterday, just in one day's trading albeit on low volumes, out performed other asian peers on down side. The lack of follow up buying due to shattered sentiment from majority of the investors, any small selling is bringing the indices few hundred points even on nifty quickly. In this type of shallow market conditions, adventurous short sellers will be caught unaware when the tide turns against them. Roll overs to the next month series have already begun and shall continue. SBI and other leading PSUs started cutting PLR is good news for pushing the consumption, which is worrying the authorities, to sustain 8 to 9% growth of Indian Economy in this year too.

Technically, though markets have closed very weak, Nifty has held January closing 5137.45 on closing basis, where as Sensex closed shade below 17648.71; if held then the short covering from today on, due to roll over will take the indices past previous week closings by tomorrow which will give confidence to number of players might result in pre-budget rally from 25.02.2008. While the settlement of February series is on 28.02.2008, Union Budget for 2008-2009 will be presented at 11 a.m. by FM, which will set tone for the march series. If Nifty closes above 5650 by 29.02.2008 being the last day, it will confirm the january lows will not be re-tested as is being believed by most analysts.

US markets have closed positive after volatile trading, expecting 50 to 75 basis points cut in next Fed meeting in March, Asian markets opened positive and Singapore Nifty futures point to positive gap up opening, if Nifty trades above 5250 and close above it at the end of the session today, we will have continuation of rally tomorrow too.

Strategy for the Day: Buy 5200 Calls for intra day trading and book profit for quick returns.