Our indices have turned volatile as predicted after making higher highs at the opening of trading and finally closed in negative territory, due to roll over to next month series, a head of derivatives settlement on 24.04.2008(today). Nifty roll over to may series has seen heightened activity, since the cost of carry is positive, as against the total market wide roll over. NIfty Put Call Ratio stands at 1.38, suggests smooth settlement today, and Nifty might settle above previous settlement figure of 4830.25, since not much down side is seen from current levels, as 5000 level is held for the past 3 trading sessions. VIX has fallen to 32.37 indicates reduction in volatility too. As of now, the upside on Nifty is capped at 5100 for today.As long as 4990.96(5DSMA) is held today, nifty shall gyrate between 5000 to 5100 today. The technical structure is developing for a bullish cross over, and with positive news flow, and increasing levels of participation, the trading range of Nifty can now be 5000 to 5350, till a close below 5DSMA happens, where bears will regain control.
US markets were volatile and finally closed in positive territory. Asian markets are trading flat to marginally positive territory right now. Reduction in stamp duty on share transactions form 0.3% to 0.1% by chinese government, encouraged short term traders, which has lifted 'shangai index' over 7% in opening trades, this will boost sentiment on Hangseng too today. Singapore Nifty futures are trading at 35 points premium indicate positive opening for our markets today due to long roll over to next month series, initially. PM's advise to Steel Industries to hold the prices for 2 to 3 months, which is respected by all mojor players, affected the sentiment on the sector, resulting in 7% fall in Sail price yesterday. Further such measures of arm twisting by Government and regulators, in the fight to bring down prices, to gain control over raising inflation, will affect the stock prices in the short to medium term. AS 30 decalaration by corporates, on the forex derivatives exposure, is gradually bringing the skeletons out of the cupboards, from companies, banks and financial institutions, the current exposure affect and on individual corporates, on their own or on behalf of the clients, need to be analysed thoroughly, in due course of time, which shall affect the bottomline, in turn valuations too.
Range for the Day: Nifty might trade in the range of 4920 to 5120 today.
Strategy for the Day: Buy 5100 puts on rallies and 4900 calls on weakness for quick returns in intraday trading. Please note that the premiums shall rapidly fall and move in tandem with spot price adjusted to the strike price, since today is the last day for current series.
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