Infosys performance for Q4 was just marginally higher, however, dispelling all pessimism, the full year performance achieving what was guided a year back, and the confidence of the management, in guiding flat Q1, and 15% bottom line growth, for 2008-2009, enthused the investors, funds and lead to huge short covering of the stock, and other tech stocks too, which have moved up 5 to 7% in yesterday's trading. This had a rub off effect on other non tech heavy weights too, which moved Nifty from the slogging range of 4650 to 4850. However, reduction in open positions in Infosys and Nifty futures having 35 points premium(based on last traded price) though the final premium stood at 18 points to the adjusted spot price of Nifty indicate, huge short covering in Nifty futures too. Roll over to May Nifty series also commenced using the increase in cost of carry existing, by funds was visible, with May Nifty futures premium raising on par with April series and some times, exceeding during the day.
Nifty has firmly closed above threshold level for bull domination, 4840 at the end of the session, on increased volumes and participation. US markets were volatile and finally closed in positive territory, inspite of Crude touching 114$ on weakening of dollar, asian markets are trading with gains, should augur well for our markets too. VIX has comedown to 30.23, a 10.64% fall indicates reduction in volatility today. Singapore Nifty futures are trading at 22 points premium right now, should help our indices to have flat to small gap up opening.
A Word of Caution: Since this is a truncated week, with 18.04.2008 being a market holiday, and roll overs have started, and the inflation data shall be released tomorrow, on 17.04.2008, which in our view might show an uptick, may invite bull unloading, and the premium on nifty encourages short selling by funds, since the indices are far below long term moving averages even now. One day strong upmove cannot change the sentiment, and long term trend, unless, follow up buying emerges, and Nifty closes firmly above 200DSMA which now stands at 5140.
Range for the Day: Nifty might trade in the range of 4750 to 4950.
Strategy for the Day: Buy 5000 puts on rallies and 4700 calls on weakness for intraday trading.
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