Our markets opened with negative gap and made new lows for the month for the second day during june already. After considerable bouts of buying and selling, nifty has finally closed below March(quarterly) closing levels Nifty(4734.50) where as Sensex(15644.44) is still holding as of now. Since the sentiment is completely shattered on breaking important support of 4800 yesterday, it will be difficult for markets to stage a recovery in the immediate future.
Once the indices breach the, above mentioned, march quarterly closing levels too on closing basis, with volumes, previous yearly(2008) levels shall be tested without any hesitation. Thus, all long posiitions need to be properly protected with long puts, in this type of environment.
US markets were volatile overnight and closed with losses. VIX closed at 28.49 marginally down, where as high was around 42.68 touched intraday, indicates further higher volatility and two way movement as the fight between bulls and bears intensifies. Government is seriously thinking and might consider some price hike in petrol etc., together with other package today or during this week, which is being eagerly awaited by market players, to assess its effect on economy, corporate performance, inflation and consumption behaviour. Auto manufacturers have posted better than expected sales for May'2008 and monsoon has touched Kerala and Andhra Pradesh already as scheduled. Singapore Nifty futures are currently quoting at 5 points premium. Asian markets are trading with gains for the present as crude cooled to US$125, on the strengthening of dollar.
Strategy for the Day: Buy 4600 calls on weakness and 4800 puts on rallies for intrad day trading.
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