Nifty has breached 5100 level quite easily due to bear pressure and relentless selling through out the day, where as Sensex opened gap down and both finally closed in negative territory. The noises from government that more administrative measures in the coming weeks to control prices of commodities, and raising Crude prices internationally, the 'pass on' effect is yet to be done, which will be very bad news for the equities and inflation containing measures as well as growth of the economy too. The rush for dollars by importers is pushing rupee down to 41.70/$, a one month high, but could not enthuse software stocks, since the guidance from tech majors from US, paint a gloomy outlook down the quarters, due to economic slowdown being already felt there.
US markets were slightly volatile overnight and finally closed with gains due to good performance by retail major Wallmart and job less claims falling by 15000, ignoring the raising crude prices. VIX closed at 25.94 yesterday indicating low volatility to continue. Singapore Nifty futures are currently quoting at 3 points discount and asian markets are trading mixed. Sensex has given reversal signal under Japanese Candle charts indicating the termination of the upmove commenced on 18.03.2008 from 14677.24 to 17735.70 achieved on 05.05.2008; However, since the indices have seen a fall for 4 trading sessions continuously, a relief rally can be expected today, which can be strengthened to avert the bearishness, in case the 'inflation' data to be released at 12 noon, shows some respite, and cooling or stabilizing for the present.
The week on week closing shall be negative since the distance to be covered by indices is quite large today, but any weakness to 5000 to 5040 levels on Nifty should be utilized as a good buying opportunity, for intraday trading as well as for next week.
Range for the Day: Nifty might trade between 5000 to 5200 today.
Strategy for the Day: Buy 5200 puts on rallies and 5000 calls on weakness for intraday trading.
Strategy for the Day: Buy 5200 puts on rallies and 5000 calls on weakness for intraday trading.
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