Whether Bulls win over Bears now?

The trading pattern since the financial year ending 31.03.2008, is influenced by number of factors. The abstaining of trading fraternity, protesting STT revised treatment brought down the volumes drastically. Gap up and Gap down openings, influenced by overseas cues, are due to FIIs control over the markets. DIIs, HNIs and Retail investors, are watchful since lot of noise is made on TV channels, suggesting that further serious meltdown is on cards, once results season unveils. In this back drop, the pattern developed is bulls are defending 4740 level(closing of March,2008), where as bears are ensuring that the level of 4831(March settlement price of 27.03.2008) is not lost, inspite of gap up openings and markets clearing this level on few occasions in the past few days of trading in April'2008. Thus, the battle lines between bulls and bears are in a striking distance of 100 points (4840-4740). The volatility has come down, as overseas markets, especially US markets are stabilizing, and lack of participation by traders, HNIs and retailors who create liquidity for our markets, brought down the volatility and range for our markets, specifically. Nifty has closed above 20DSMA (4758.17)yesterday, and a marginal cross over of 5DSMA (4788.37), tilts in favour bulls, who are waiting to take the lost fort from bears.

The mute question is who will win from now on? No doubt that markets are in firm bear grip, as they need not exit till 200DSMA is cleared with large scale participation and volumes. Few Developments taking place are of interest to markets.

RBI allowed MFs to invest upto 7$ billion in overseas assets(an increase from 5$billion dollars existing);

BSE Sensex futures will be listed and trading from 04.04.2008 on USFE(United State Futures Exchange), Chicago and will trade for 23 hours, giving arbitrage opportunities to FIIs and ADR investors.

SEBI permits FIIs to punch their orders directly on indian exchanges, instead of routing through registered broking houses, helps FIIs to reduce their cost, and trade freely, without allowing Brokers to do any front running. Certainily, broking companies who are having this business will get affected, who are already suffering due to low participation by retailors, will have loss of earnings.

SEBI proposed to allow Short selling in our markets, including Stock lending & Stock Borrowing by Institutions from 21.04.2008, will change the trading pattern of our markets.

Today's trading and final closing after knowing the inflation data latest, will decide the break out in either direction of the markets from next week. Singapore Nifty futures are trading at 15 points premium currently.

Range for the Day: Nifty might trade in the range of 4650 to 4950 today.