June Series settlement is behind us and the rollover of stock and nifty futures to next month series are mostly on short side only. While the spot nifty manged to close at 4315.85 yesterday, since index mangagement was seen in the last half an hour, for ensuring the index options settle favourable to the funds who have taken a specific view for the month. The july nifty futures closed at whoping 75 points discount, includes some dividend adjustments too, but it clearly indicated negative view by FIIs a head of inflation data to be released today at noon, which shall show further uptick, inspite of several measures initiated by government and RBI. Crude cruised to US $ 140 overnight due to dollar weakness against Euro and Gold advanced by 25$ to breach 900$ mark yesterday. VIX closed at 32.85 yesterday. CBOE index jumped 12% yesterday indicating higher volatility in US markets. Asian markets are trading in negative territory, following US cues. US markets have posted huge losses overnight, as Goldman Sachs has down graded two major banks, and out look from tech majors was bleak for the ensuing quarter, which lead to sell off from investors, who were catching the flight to 'safety'. Singapore nifty futures are currently quoting at a discount of 110 points, gives gap down opening for our indices, for certain.
July month settlement takes place on the last day of the month i.e., 31.07.2008, thus, one of the longest period, which naturally gives raise to huge range and volatility for Nifty. Nifty has closed at 4870.10 at the end of the May month & 4734.50 at the end of March month/quarter. The general prop up of NAVs by mutual funds, that could be done has only two days left in this month, where lots of negative news is already out for the markets today. The range if Nifty for next month can be evaluated seeing how the June month closes, however, today being the week end, it will be interesting to see whether nifty can finally close above 4347.55, which will arrest the continuous fall for 5 weeks at a strech. Nifty's inability to clear 4351.15 today after the release of inflation data, and its inability to sustain above 5DSMA currently placed at 4274.71, will invite profit booking on week end consideration.
Range for the Day: Nifty might trade in the range of 4150 to 4350.
Strategy for the Day: Short Nifty July futures with a stop loss at 4267 for intraday trading!
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