Crude raises to 126$ from recent low of 120$ and longest settlement of Derivatives of our markets ends today!

Following global cues our markets too recovered the losses of 29th, after announcement of RBI policy decisions, as crude cooled to 120$. The decisions to raise Repo and CRR to 9% is certainly negative news for equities, and the actual crude price raise is not fully passed to the consumers in our country, as it is being done in USA., where the price of gasolene and petrol are directly linked to crude prices being quoted in exchanges, and being the prices are market determined unlike, being administered in India, US investors and markets reacting positively to fall in crude prices is understandable. Crude started raising after hitting 120$ recently, and Goldman Sachs research report predicts it to touch 149$ once again in this reversal! If it happens then it will be a disastrous event for all equity markets including US markets. Thus, it is the time for investors to be extremely careful in having or taking long positions in the next series, without proper hedge, and equities will give negative returns only for the rest of the year, until inflation cools to 7% as being targetted by RBI. However, the volatility if captured with sound technical and fundamental knowledge, gives excellen trading opportunities to 'professinal traders only'. US markets were volatile overnight but posted good gains at the end of the session.

 

Nifty futures closed at a premium of  12.85 points for current series where August Nifty futures are closing at 16  points premiums, indicates long roll overs so far, and optimism for the next month. Nifty rollovers have completed 55% by yesterday, and atleast another 20 to 25% of the outstanding contracts/positions need to be rolled over before 2 p.m. today, if the average is considered for the past several settlements, which brings volatility and two way movement, for certain. VIX closed at 51.72 yesterday. Singapore Nifty futures are currently quoting at a premium of 26 points indicates positive opening for our markets initially, since short positions are mostly out of the system, long roll overs shall give fall of indices during the middle of the session. Today being the last day of the month too, some NAV prop up by mutual funds can be expected in the last one hour of trading. Any upsides will be facing selling pressure today at 50DSMA levels of Nifty(4372.06) & Sensex(14629.95) and nifty might close below 4400 today, in my reading! Inflation data shall be released at 5 p.m. today after market hours shall influence the markets tomorrow onwards again. Both the indices have closed around 5DSMA levels, and any weakness should find support at 20DSMA levels placed currently at Nifty(4127.14) & Sensex(13724.51), which look far from current levels. June monthly closing of Nifty was 4040.55, whereas june settlement price was 4315.85, around which nifty closed yesterday, will be interesting to watch, whether it can close above this level? Analysis of entire July month options trading indicates to me that Nifty might close between 4200 and 4400 today! Higher range is on account of higher volatility index which is above 50 currently.

 

Range for the Day: Nifty might trade in the range of 4200 to 4400.

 

Strategy for August: Buy 4300 straddle on Nifty and sell strangle 4000 put and 4600 calls to capture the higher premium on account of higher volatility.

Strategy July-10 inititated.

Close the 4100 July CE long position at current market price of Rs.170/- and book profit.

 

bkvrkrao

Crude cools to 120$ on strengthening of US Dollar! US markets recovered the losses of monday! Whether we too follow today??

US markets have rallied on the news that the Consumer Confidence index has shown an uptick, though marginally, where most analysts and economists were expecting a down tick, which pushed short squeeze. Another shot in the arm for US investors was cooling of Crude to 120$ intraday, on strengthening of US dollar against Euro, on the announcement of OPEC president that demand destruction is visible, as the crude doubled over a year, due to over speculation in the commodity, and his assurance to keep the supply at current levels, which shall bring the crude to 78$ levels, once the excesses are out of the commodity positions was really comforting. James cordier, Option sellers.com observed that currently 'short positions overweigh the longs' on commodity exchanges where crude is traded, suggests further fall in crude prices, is a very sweet news to equities world over. Another research report by Mr.Nauman Barakat also supports this observation. Well, US markets rallied over night and recovered the losses registered on monday, and the same are having rub off effect on asian markets today.

 

Singapore Nifty futures are currently quoting at a  premium of 81 points, indicates strong gap up opening for our markets too, a head of derivatives settlement tomorrow. Volatility can be very high today as VIX closed at the highest point yesterday at 61.73. Gap up and Gap down openings cannot benefit intraday traders and small investors, unless one is having a favourable overnight position, and is a professional trader, using sound technical analysis and fundamental knowledge.

 

Closing of all favourable outstanding positions today itself may not be a bad idea, because, which news can bring the markets down or take it up next day has become most unpredictable, in these uncertain times.

 

Happy trading and investing too! Strategy for tomorrow and next month series will be given around 02.00 p.m.today through a separate posting!

RBI acts proactively and raises Repo rate, CRR by 25 and 50 basis points respectively!

Our markets opened gap down, as anticipated by everyone, following global cues, and as analysts are devided on the expectations from RBI on action, banking stocks started trading firm till the announcement of RBI decision to hike Repo rate by 25 basis points. This is generally expected measure as moderation of credit is being the stance of RBI in yesterday's report. The real surprise and shocker from Dr.Y.V.Reddy is increase of CRR by 50 basis points from April, 30th 2008, which invited heavy selling in banking and realty stocks instantaneously, which brought Nifty to 4160 level, where some support emerged. Nifty took held the lower band of  the range advocated in the morning posting. 4400 put option gave more than 100% returns in just one day, and 4100 call position initiated today, should give good returns tomorrow. Nifty is now firmly closed below June settlement price and 5DSMA too, a head of derivatives settlement on 31.07.2008. VIX has closed at another high of 61.73, registering intra day high of 63.22, suggests continuation of higher volatility tomorrow too. 20DSMA which now stands at 4116.13 should hold tomorrow and once market players understand that the measures are proactive, good for protecting the economy from any external shocks, as still the global risks of slowing of growth, raising crude prices, imported inflation etc., also will have their impact on our economy too.

 

The current measures of CRR 9% and Repo rate 9% were there a decade ago, shall affect the banking sector performance in the next two quarters atleast, and only on inflation falling below double digit levels, might  invite reversal of these measures by RBI. Another important parameter to be watched in the coming two quarters is 'Crude Prices' which have currently corrected about 15% from all time highs, whether it moderates further to sub 100$ levels to help regulators world over to have a sigh of relief to initiate measures for encouraging consumption and growth. Though these measures have short term negative impact on banks profitability, in medium to long term the banking stocks shall give substantial returns, as the MTM provisions made on account of raising bond yields, as per the current policy are notional losses only, which gets reversed to P&L in future, whenever situation improves. Thus, one should start building portfolio of beaten down public sector banking stocks gradually which offer good, tax free dividend income regularly, and also capital appreciation in future. Another important thing to note is 'banking sector performance ' directly reflects and contributes to growth of the economy, which cannot be allowed to underperform or suffer for long, by government or RBI.

 

Range for Tomorrow: Nifty might trade in the range of 4100 to 4300 tomorrow.

 

Strategy for Tomorrow: Sell 4100 calls and book profit and go long on 4300 puts in case of a relief rally for intraday trading.  

Global cues are negative a head of RBI policy meet! Markets to open weak today!

Our markets traded in narrow range oscillating between positive and negative territory, factoring in the results of banking stocks ICICI BANK, HDFC BANK & L&T etc., and finally closed with marginal gains, amidst volatility due to roll overs picking up to next month series. Nifty futures have closed with just 5 points premium indicates 'wait & watch' mood of investors ahead of an important event 'RBI Policy statement and action on interest rates etc., VIX closed at 54.06 the highest, ever since it is introduced to measure the volatility of our markets, suggests heightened volatility today and from here on. US markets have seen big sell off overnight, as crude started raising once again on supply concerns, and dismal performance of financial stocks like 'Merrill lynch". Nifty has closed below 5DSMA which now stands at 4358.88 and might take support at 4101.48 (20DSMA) in case of huge weakness. Singapore Nifty futures are currently quoting at 94 points discount indicates minimum 2% gap down opening for our markets at the opening. Asian markets are trading in negative territory following US cues.

RBI will announce its decision on interest rates at 11.00 a.m. and Dr.Y.V.Reddy will explain the policy stance later in a press conference generally around 12 noon, will be watched keenly by FIIs and market players, to read the cues on GDP growth, fiscal situation, etc., which will be priced in the interest rate sensitives like, banks, financial companies and real estate sector stocks. Dr.Y.V.Reddy's tenure as Governor comes to an end by 30.09.2008, unless he gets an extension, and his views will be taken with rapt attention, since he has fixed a 5.5% inflation target for this fiscal, which appears to be impossible to achieve in the current scenario, and added to it, he might not be there to achieve it, since he would leave his office half way through.

In my opinion, RBI may leave both CRR and interest rates unchanged, but will give a statement to act inspite of a policy meet, anytime, as situation warrants. The M3, is down, and credit growth is also moderating, and GDP growth also is affected due to higher input costs, crude prices, inflation, and interest rates. Yesterday's report from RBI indicates that it aims to achieve growth, while taming the inflation. Public Sector banks profits are already down for this quarter, and Vijaya Bank has posted even loss, which makes difficult for them to raise additional capital to meet 'Basle Committee' capital adequacy norms by 31.03.2009, with bad financial performance. Anyway we will know every thing during market hours.

Range for the Day: Nifty might trade in the range of 4150 to 4400 today.

Strategy for the Day: Close long 4400 put at the opening and book profit & Buy 4100 calls for intraday trading.

Nifty corrects on profit booking and holds 5DSMA levels a head of RBI Policy meet on 29th!

Our markets have opened gap down on friday, on weak global cues as anticipated, and traded with volatility as roll overs picked up to next month series. The after noon "Bomb blasts news in Bangalore" during market hours brought more weakness, as longs were unwound, a head of week end and RBI Policy meeting on 29th. Nifty held 4300 level and closed positive for the week posting 5% gains over previous week, thus, posting 3 weeks of consecutive gains. It also closed around June Settlement  level (4315.85) and just below the 5DSMA level currently placed at 4324.36. VIX closed at 42.29 on friday, while the day's high again crossing 52.01 intraday, indicates higher volatile times during the coming week where Derivatives Settlement also takes place on 31.07.2008, which incidetally is the last day of the month. Saturday witnessed another serial Bomb Blasts in Ahmedabad in the evening, killing 45 innocents, and injuring many, keeps the sentiments negative for investing in Stocks, which are riskier assets, in these uncertain times.

 

ICICI Bank announced its Q-1 results on Saturday, which posted 7% net profit down over previous quarter, due to provisions for MTM  losses on securities portfolio, as bond yields are raising. NPAs are also up 1.8% of advances, indicates problems with credit portfolio showing uptick. US markets closed with marginal gains on friday night, and crude continues to correct where it touched 122$ intraday and settled at 124$ finally. Since inflation is moderating, and also crude is cooling from 148$ levels RBI may not tinker with interest rates and CRR on tuesday, in my opinion, and watch the growth and monetary situation for few more weeks, as it can act anytime, independent of policy meeting to take proactive measures. Monsoon started picking up in southern india too now, and once the overall monsoon is satisfactory, our domestic economy will look up.

 

Nifty futures have closed with 18 points premium on friday in the current series. Singapore Nifty futures are currently quoting at 22 points premium which will give flat to positive openig initially. Asian markets are currently trading with gains. Nifty might consolidate in the range of 4200 to 4400 today, due to roll over we might witness two way movement.

 

 

Range for the Week: Nifty might trade in the range of 4100 to 4650 during the week.

 

Strategy for the Day: Buy 4400 puts on rallies for intra day trading.

Stock Market Rally, Inflation and Crude prices are halted! Will the down trend resume?

Our markets have paused and corrected mildly yesterday, after a spectacular rally of 17 to 18% from the lows made on 16.07.2008, a head of inflation data, US housing and Jobless claims data, finally 50DSMA Nifty(4439.03) & Sensex(14881.13) proved to be a good resistance for both indices, and both indices have closed below it yesterday. While Put-Call Ratio is stable at 1.4, Nifty futures have closed at a premium of 9 points. Most of the shorts have been closed, and premium on both current series as well as next month series indicate over bought situation, and the new confidence returning back from even retail investors, which is evident in strong rally in momentum stocks already, is a dangerous sign. Inflation has cooled a bit to 11.89% as against 11.91% previous week, as per the data released yesterday at 5 p.m. is a good news for our markets, though the WPI is showing uptick. The rate of raise is moderating for now, whether it will fall further depends on 'monsoon' which is so far good over North India, and very poor in Southern States. Apart from it, the self imposed moratorium imposed by steel majors to hold prices for 3 months, expires by 01.08.2008, as the input costs are not coming down, thus, the prices of steel might go up which again is inflationary. Crude has cooled 16% from all time high of 147$ and currently trading around 125$, due to profit booking by investors, who are watching the demand destruction on one hand, as well as strengthening of US $ against Euro, as expectation of Fed start raising interest rates from now on, is bringing some cooling in commodity prices.

VIX closed at 40.29 yesterday, while the high was 51.65 indicates return of volatility to our markets, as roll over of derivatives positions to next month series already commenced, which will pick up further from now on. The volumes for the past two days on our bourses have risen substantially, is a sign of increased participation; the small and retail investors, need to be careful and should not be over enthusiastic of the rally as it is just a relief rally of deep bear market, which will not last longer, as the macro economic situation yet to improve. Reliance results are in line with expectations, the threat of 'windfall tax' demanded by Samajwadi Party, whose support to UPA Government is crucial in the current situation, is a demoscle's sword, on oil companies. ACC results are below street expectations, due to the raise in costs, and price control induced by government, to check inflation, is showing its toll on the performance. RBI's Credit Policy to be announced on 29th (Tuesday) a head of this month's settlement due on 31.07.2008, may not announce further raise in interest rates or CRR should soothen the markets. Cabinet has cleared the merger of SBI with SB Saurashtra, for which an executive order might come, shows the commitment of government to push the reforms azenda, since it is liberated from Left's restrictions which were holding this and other financial bills.

US markets have tanked overnight, asian markets are trading in negative territory currently. Singapore Nifty futures are currently quoting at 80 points discount, which induce weak opening for our markets too and whether support comes at 5DSMA levels Nifty(4280.44) & Sensex(14261.79) is to be watched, and the final closing of today, shall anyway be higher than previous week's close. Markets will witness two way movement, amidst higher volatility, as the bulls try to hold their new found initiative against bear onslaught, who have all ammunition to bring the prices and markets down in medium & short term too.

Range for the Day: Nifty might trade in the range of 4300 to 4500.

Strategy for the Day: Buy 4300 calls on weakness and hold till monday.

Crude cools further to 124$! Nifty & Sensex close above 50DSMA with large volumes!

Since the political instability, and an early election fears vanished, with UPA government surviving with clear majority of 275/541 votes in favour, our markets opened with huge gap and posted one of the largest gains in this year, with huge volumes, due to short sqeeze on one side and fresh long build up too simultaneously. It is quite evident as the Nifty August series also turning in to premium during the day. Both the indices have cleared 50DSMAs easily due to all round participation of players and sectors, and also closed above them. This relief is expected by everyone, who is acquainted with markets, as how the sentiment changes for the better, once uncertainity is removed. FM stating that the government is committed to bring the inflation down in the coming months, and concentrate on clearing the reforms bills, cleared by standing committee, pending since 2006, during the ensuing 'monsoon session of parliament' too enthused FIIs who have turned buyers in financial stocks, which were beaten blue in the recent carnage.

 

CPM has expelled Sri, Somnath Chatterji, currently holding the post of  speaker, for not carrying the ''whip' to vote against UPA in trust motion on 22nd. However, he continues to be the speaker, as per reports in the media, he wishes to put down his papers on 11th august, 2008, before commencement of Monsoon session of Parliament, since he is invited to chair the "Commonwealth Association of Parliamentarians" between 1st to 10th august. If he wishes he can continue as speaker, if the house too wishes him to continue, as per the constitutional provisions, and UPA ministers have already approached him to know his mind and to request him to continue. As of now, the UPA government could win the trust vote, with cross voting of 10 M.P.s and abstention of 10 M.Ps. on 22nd. Whether, the government will be able to get its speaker elected, in case Sri, Somnath Chatterji, sticks to his decision to step down on 11th August, 2008, as informed earlier to CPM party's polit beaurau! While the Government image is certainly tarnished with the 'bribing BJP M.P.s" issue, which is being investigated into, the ability of the government to get the speaker elected, and get the business going, throw some anxiety, as the numbers turnout, in future! However, as of now, government need not be insisted to seek another trust vote for 6 months, as per constitution, thus the continuation of the government is not in jeopardy.

 

Crude cooled to 124$ overnight, due to the demand destruction in US, as the consumption data shown down tick, and that Fed might raise rates from now on, to check the inflation. US congress presented the 'mortgage bill' to help the homeowners to continue to live in their homes, also helped sentiment in US markets. US government is happy with the developments in India on the 'Indo-Nuke deal' outcome, and are taking fast track steps to see the further steps are completed quickly, so that the approval of its congress also is obtained before the end of September, 2008, has lifted the stocks like, BHEL, L&T,NTPC and Power stocks which will be direct beneficiaries, if the deals goes through smoothly and quickly. Here I would like to highlight, that all what is happening is sentiment booster, and the actual increase in revenues and profits shall acrue to the stocks connected to this deal only after 5 years from now. One need to be cautious, as we need to get the confirmation of bottoming out, to go long agressively, however, the current rally might be having some more steam left, say ...can go up to 100 DSMA levels Nifty(4682) & Sensex(15565) in the immediate short term. VIX closed at 37.77 and put call ratio is inched up to 1.40 and inflation data shall be released today evening at 5 p.m. after market hours. Host of heavy weights results like RIL are to be announced today, will influence the markets. Markets might be volatile from here on as the fight between bears and bulls intensifies.

 

Asian markets are trading mixed currently, while Singapore Nifty futures are currently quoting at 45 points premium which might give postiive opening and some profit booking can be expected as the markets witnessed a continuous 5 days rally, posting substantial gains already.

 

Range for the Nifty: Nifty might trade in the range of 4320 to 4530 today.

 

Strategy for the Day: Buy 4500 puts on rallies and 4300 calls on weakness for intra day trading.

UPA wins trust vote with clear majority in high drama! Big relief for markets and country!

UPA mustering 275 votes at the end from friends, and cross voting came a clear winner, in the closely watched trust vote, and is quite strong and free to push its azenda in the rest of the time left before next general election, since the 'back-seat' driving from 'left parties' is done with for now. Dr.Manmohan Singh, PM and the industry, business leaders and markets will have a sigh of relief, from threatening drama being witnessed for more than 2 years, ever since 'Indo-Nuke' negotiations commenced. Even if the Speaker, Sri, Somnath Chatterji steps down before monsoon session of parliament, the government can have their speaker elected, thus, immediate elections threat is thwarted for now. Nifty and Sensex have closed strong yesterday for the 4th day in a row, sensing the comfortable victory for UPA government. Crude further cooled down to 128$ overnight, enthused investors in US, markets there though traded in negative for most part of the trading, rallied in the last hour of trading to post substantial gains, augurs well  for our markets today. Nifty futures closed at premium of 10 points at the end of the session on adjustment basis, indicates positive bias to continue, with all good cues around! VIX closed at 35.55 yesterday.

 

Asian markets are trading in positive territory, Singapore Nifty futures are currently quoting at 183 points premium, shall give big gap up opening for our markets initially, and at some point of the day, we can expect profit booking, as the markets will be factoring in the fundamentals of economy, inflation, expectations on RBI Credit Policy etc., Government' s resolve to take the parliamentary majority in its stride before proceeding on Nuke deal negotiations, is good positive news for Power and Infrastructure stocks in medium to long term. Thus, accumulate NTPC, BHEL,TATAPOWER,L&T etc., on every weakness from here on. Nifty shall face the initial resistance at 4315 and then 4460 level which is 50DSMA, where profit booking can be expected. Investors should wait to go long on markets till they cool down.

 

Range for the Day: Nifty might trade in the range of 4060 to 4460 today.

 

Strategy for the Day: Short Nifty futures at the opening with a stop loss of 25 points above day's high at the time of creating the position for intraday trading.

Book Profit on long 4000 call of July series purchased on 10.07.2008

It is recommended to close the long 4000 CE July purchased at Rs.144 at current market price of Rs302/- now.

 

bkvrkrao

11.41 a.m.

22.07.2008

UPA Government might survive in trust vote to night! Then What next?

The rally in our markets for the past 3 days, recovering almost the entire losses, in the past 5 trading sessions preceding it, seems to be indicative of survival of trust vote by the present UPA government, though they may not reach simple majority by crossing the magic figure of 272. Ofcourse, global markets also are rallying simultaneously, and FII figures inidcating short covering, and fresh buying, as valuations look quite attractive, after indices corrected more than 40% from peak of 2008, and some stocks and sectors correcting more than 50%. The results so far are in line with expectations, and factually, no political party including the strong opposition NDA or Left who wants the UPA to be defeated on the floor of parliament, are not prepared to have early election, due to adverse economic conditions. Well government survives to night, and it goes to IAEA meet to discuss the Nuke deal, but with the absence of support of 272 MPs it will be reduced to 'minority' government which cannot take any important policy decision in the day's to come! Apart from it, the pressure mounting on the Speaker Sri, Somnath Chatterji to step down, from his parent party CPM, and vote against UPA might force him to resign from the post to night or before commencement of 'monsoon session' of parliament, which again poses a serious problem for the minority government to elect 'speaker' of its choice, where it needs support from some or all opposition parties! Thus, the political situation domestically will continue to haunt the markets, while the problems, of higher crude prices, inflation, slowing of growth, weak monsoon effecting the economy and the common man and industry in general.

 

When we analyse from the above unfolding situation, the current rally is a relief rally, in the deeper phase of a long term bear market, and shall 'fizzle' out suddenly, taking the indices to re-test the lows made on 16.07.2008, or even breach in the days/weeks to come. Unless one is a very long term investor, say hold for a minimum period of 2 years, should not hold stocks and build portfolio, until confirmation of bottom formation is known. Currently, both the indices have closed firmly above 20DSMA levels, June Closing levels and also previous week's closings, augurs well for continuation of rally. Today, markets will have higher volatility, as the news flow and profit booking a head of an event, and survival of UPA government in trust vote to night, shall bring further gains, challenging 4300 on nifty where, I expect bears to become active once again. Nifty futures have closed with 5 points premium yesterday at the end of the session, indicates optimism on survival of the government. US markets have closed marginally negative overnight, and asian markets are currently trading in positive territory. VIX closed at 40.40 indicates higher volatility today. The swings on nifty can be very wild today and tomorrow, thus, traders and investors should have strict stoplosses on their positions, to minimise the losses, if the tables turn against them. Singapore Nifty futures are currently quoting at 30 points  discount which might bring some initial weakness due to profit booking and short build up too.

 

Range for the Day: Nifty might trade in the range of 4040 to 4220 today.

Though indices closed positive for 2nd week in a row! All eyes will be on trust vote 22nd!!

With crude cooling further to 128$ US markets rallied on thursday, our indices have traded in flat territory initially, however, short sqeeze coupled with selective buying in index heavies like ICICI BANK etc., helped Nifty and Sesex to post weekly gain for the 2nd consecutive week. The numbers oscillation showing that UPA might comfortably survive crucial 'trust vote' on 22nd also helped the improvement of sentiment. Friday night US markets ended mixed, Dow posting gains and Nasdaq nose diving in to negative territory, this week especially today and tomorrow our Parliament is convened to discuss on 'trust vote' and the end result will be known by tomorrow evening or midnight, if the past trend is to repeat, will influence our markets in general. With such an important event a head, where lots of uncertainity still looming large, intra day swings can be very wild, and small and retail investors are better advised to keep away from markets till wednesday, where clarity emerges, which gives the necessary direction for our markets. VIX closed at 36.25 on friday, Nifty futures discount stood at 15 points to not much shorts existing in futures of stocks or index! The activity is shifted to options for certain, which is less risky, as the premium paid only is put to risk in these uncertain times.

Nifty and Sensex have closed above 20DSMA levels Nifty (4063.94) & Sensex (13552.29) after a long time, augurs well for bulls to continue the fight back, but will they be able to do it today is a big impossibility. The result of trust vote tomorrow, once out and government surviving, without left, is big positive for Power sector stocks, and the focus will then be shifted once again to crude price movement, inflation on week end and the action from RBI a head of policy meet on 29th. Thus, we are in for higher volatility till the expiry of series on 31.07.2008, the range of Nifty is getting wider viz., 3500 to 4500, in my view. Singapore Nifty futures are currently quoting at 61 points premium, and asian markets are trading in positive territory, should give positive opening for our markets too, initially.

Strategy for the Day: Buy Nifty 4100 Straddle and hold till 23.07.2008.

Crude cools to US130$ and US markets rally futher!

Our markets opened with gap up and short covering in stock futures and nifty futures pushed indices to close at the upper end of the trading range finally, clearing 5DSMA levels. US markets have rallied for the second day, as crude cooled to 129$ intraday, lead by financial stocks. Inflation data was released at 5 p.m. yesterday itself by government which rose to 11.91%, however, the steps taken by government and RBI seems to be working as the pace has slowed down. Nifty futures closed at a discount of 21 points only and Wipro, Satyam results will be announced before market opens. The rally which has begun shall continue today as the inflation data hangover is done with, where as the trust vote, uncertainity lingers, as the numbers are still to confirm clear victory for UPA camp, as of now. Nifty will face resistance at 4050 to 4080 levels, where profit booking can be expected, on weekend considerations. VIX has closed at 35.34 suggests two way movement and volatility cannot be ruled out.

Asian markets are trading in positive territory, and Singapore Nifty futures are currently quoting 38 points premium augurs well for positive opening for certain. CBOE index has fallen to 24 levels suggests US markets are stabilizing at current levels. It is advisable to take profits from weak long positions, and stay in cash as this week end can be enjoyed where uncertainity is looming large.

Range for the Day: Nifty might trade in the range of 3850 to 4050.

Strategy for the Day: Short Nifty futures at the opening with a stop loss of 25 points above day's high, at that point for intraday trading.

Crude cools further to US134$ and US markets rallied over night!

Though our markets have opened with some gains in the beginning of the trade yesterday, the profit booking in the later half has created new lows for 2008, on our indices, finally closed with losses. Nifty too has completed 40% fall from the top of 2008, breaching 3814.26, intraday. The profit booking by bears in index futures lifted the nifty to 3842 levels at the end of the trade, though on adjustment Nifty closed at 3816.70. The closure of Nifty above 3800 especially, above 3814.26 was encouraging, with crude cooling further to US 134$, and a big rally overnight, in US markets will have rub off effect on our markets too initially, and we will have a gap up opening today. VIX closed at 31.10 yesterday, though intraday high was 54.88. Volatility has become part of our markets, as the domestic issues too are influencing our markets. TCS & HDFC results were in line with market expectations. Trust vote number game is oscillating with no clear direction in sight, while 22nd is approaching. Inflation numbers to be announced tomorrow are expected to clear 12% for certain. Thus, intraday trading and booking quick profits is only recommended till real strength is visible. Staying in cash is the best strategy, in these troubled times, until confirmation of bottoming of markets appear.

 

Singapore NIfty futures are currently quoting  150 points premium, and asian markets are trading with gains, which gives good gap up opening for our markets, where investors need to watch the resistance at 3985.74(Nifty) 5DSMA level initially and then 4040 (June closing levels) where profit booking or fresh creation of shorts can be expected. Investors better advised to exit weak long positions on such rallies, and increase cash levels.

 

Range for the Day: Nifty might trade in the range of 3850 to 4050.

 

Strategy for the Day: Buy 4000 puts on rallies today for intraday gains.

Rating Downgrade of Indian currency and growth, spooke the markets!

The first reaction from 'Fitch' an international rating agency, down grading indian currency and growth outlook to negative, has spooked our markets in the late trade, where both nifty and sensex have made fresh new lows in 2008. While political uncertainity a head of trust vote on 22nd, is causing some nervousness as channels flash the swing of support in favour and against oscillating in the numbers game, since UPA government has fallen to minority on withdrawl of support from left parties on 10.07.2008, the worst seems to have come already. While sensex completes 40% fall from the top made Jan'2008, Nifty is almost there (3814.26). On final adjustment Nifty could close above previous low of 3849 and sensex close above 12671, are some hopes for a bounce, as crude cooled 5% yesterday, on Bernarke's testimony before senate that energy prices are pushing the demand down. US President Mr.Bush seeking permission from congress to permit opening of 'off shore drilling' to increase domestic production, also sent shivers among 'oil bulls' to book profits. Crude closed at 138$ and further fall from here is really comforting news for all economies and markets. US markets have fallen to 2 year lows and recovered at the end of the trading and the CBOE volatility index now stands at 28 indicates higher volatile times.

 

VIX closed at 49.77 yesterday, the second highest ever closing since its inception, suggests further heightened volatility. Investors have dumped stocks in yesterday's fall, indicative of capitulation as panic situation is developing, and holding 3815 today confirms the bottom, as valuations of most of the rate sensitives have fallen to mouth watering levels. Nifty futures on adjustment have closed at discount of 32 points, where as on last traded price basis the discount stood at more than 60 points. Singapore Nifty futures are currently quoting at  34  points premium and short covering shall give initial uptick, where we can expect selling from trapped investors/bulls, till clarity emerges on survival of UPA government on 22nd.

 

Range for the Day: Nifty might trade in the range of 3800 to 4000.

 

Strategy for the Day: Buy 3800 calls at the opening for intraday trading.

Indices turn volatile and close flat a head of UPA government trust vote!

Both indices traded with volatility, as they are confined to a range, and finally closed marginally in negative territory. While investors are reluctant to add long positions a head of UPA government's trust vote on 22nd, head line supply at 4110 to 4120 range coupled with negative news on Ranbaxy invited selling pressure, however, 4000 level on Nifty was held during the day. 4 to 5 % which used to be a monthly gain on indices few years back, has become the weekly and some times daily phenomenon, on the Nifty either up or down, since the beginning of the year(2008) is keeping the retail investors to stay away from the market, which is resulting in lower volumes too. In my view, Nifty shall hold 3850 to 3900 support till the decision on the UPA government survival is known; and a clear direction either a steep fall or a blow out rally shall happen from there on. It is certainly a market for professional traders, who know the technical levels to take a view and exit quickly with strict stop losses on the trades, to minimise losses and make intra day earnings. VIX closed at 31.51 yesterday, but the day's high being 55.71 suggests return of volatility. Nifty futures closed at 12 points discount that an indecisive view, as most of the positions created intraday are squared off before the end of the trading. In these uncertain times, carrying overnight positions costs severely.

 

US markets closed with losses yesterday, and asian markets are trading in negative territory presently. Singapore Nifty futures are currently quoting at  79 points discount suggests weak opening for our markets. Crude touched US$147 and might top out around 150 levels, as it is in over bought territory, as per commodity experts. If crude corrects to a level of 100 to 120 levels on profit booking or any other positive trigger from US, then there will be a good rally globally. Indian crude basket has crossed 140$ is certainly a bad news for oil marketing companies, indian economy and corporates. The demand for introducing 'windfall gains tax' private oil refineries from Samajwadi Party, whose support for survival of UPA government is crucial and vital, is sending shivers among the stock prices of Reliance and Reliance Petroleum which are index heavy weights, to be watched carefully. Ofcourse, government cannot take any decision on these type of matters right now a head of 'trust vote'. Thus, the outcome of the trust vote, and the importance of each component of UPA government from 23rd onwards, shall influence stocks, sectors and indices.

 

Range for the day: Nifty might trade in the range of 3950 to 4150.

 

Strategy for the day: In case of weak opening of nifty futures today, go long on Nifty futures with a stoploss of 25 points from the purchase price for intra day trading.

Infosys results in line with expectations and raises guidance!

Infosys results are in line with expectations. Raised rupee guidance for the full year above 100 EPS, the confidence comes from the weakening of rupee. However, the stock fell 7% and brought the tech sector stocks between 5 to 7% with it. The inflation data shown slight uptick in tune with the expectations, where the markets are now agreeing to live with double digit inflation for some months to come, since macroeconomic situation is worsening, domestically and globally too, with crude not agreeing to fall below US $135. The real villain for the steep cut in indices on friday was IIP numbers which were dismal, indicating slowing of the economy, and possibilities for our GDP crossing double digit growth on hold for few years down the line. The capital goods stocks and infrastructure sector have found no buyers, thus the indices gave away most of the gains made during the weak. VIX closed at 33.01. However, both Nifty and Sensex have posted week on week gains after continuous fall for 7 weeks in a row. Now How they move this week and close on coming friday, shall give the clue for reversal of trend and at least intermediate bottom formation!

 

US markets closed in negative territory on friday, Singapore Nifty futures are currently quoting with 30 points discount, asian markets opened positive and are trading in negative territory, as crude shoots to US 145$ once again. UPA government trust vote is scheduled on 22.07.2008, for which a special session is convened for 2 days on 21st and 22nd instant. Our indices have closed above June month closings on friday, where as they will face first resistance at 5DSMA levels currently placed at 4077.37(Nifty) & 13647.20(Sensex) now on any upmove.

 

Range for the Week: Nifty might trade in the range of 3800 to 4200.

 

Strategy for the Day: Buy Straddle of 4000 for intraday trading today.

Infosys results, IIP numbers & Inflation data, influence the markets today!

Inspite of big sell off in US markets and weak European markets, our markets traded in narrow range, posting higher highs finally closed flat, a head of Infosys results to be announced today, was assuring strength or is it calm before the storm, will be known in today's trading. Nifty futures discount norrowed to 16 points indicate that not much shorts exist in futures, as the positions have been shifted to options, where gap up / gap down movements shall not hurt much as they do in overnight futures position. This suggests that market is making a boundary for a break out. 4150 level observed by me, has overcome for two days in succession, and if Nifty could close today above this level, then it confirms short term bottom formation at 3848.25 for the time being. Political situation uncertainity is over, with left parties withdrawing support and PM is very happy and relaxed having asserted his point of pushing Indo-Nuke deal. If UPA government survives the trust vote without left parties, then that can be a big booster to the markets, as reform process can be pushed by government.

 

Infosys results to be announced before market hours give a view on the tech sector performance, and outlook of US economy too, to some extent. IIP numbers might be disappointing, where as Inflation shall show some more uptick, and finally week end consideration, might invite some profit booking, as follow up buying is not seen yesterday, after a stunning rally on wednesday. Crude jumped to US141$ due to possible supply concerns from Iran, which has test fired long range missiles, against the wishes of western nations. Any trouble in middle east, can make the crude to cruise to even US$250, few reports suggest, is the major concern and threat now for global markets and economies!!. US markets rallied inspite of weak economic data, however, the assurance from Mr.Bernarke that regulatory action shall be taken to bail out big corporates and economy, if needed. Singapore Nifty futures are currently quoting at 24 points discount, and asian markets are trading weak at present.

 

Range for the Day: Nifty might trade in the range of 4040 to 4240.

The rally may be a "bull trap"! Beware of going long on markets!

Helped by strong global cues, and removal of uncertainity 'when left will withdraw support to UPA government at home' helped indices to post substantial gains, pushing "short squeeze" which was quite visible as the discount on Nifty futures reducing from 62 points to 19 points by the end of the trading. Smart guys are closing short futures and going long on options whenever such sudden things happen, thus, unless follow up buying emerges today and tomorrow, one should not read into the yesterday's rally as any sign of bullishness. One positive feature of yesterday's move was both indices have closed above 5DSMA levels Nifty(4023.48) & Sensex(13477.60) and also above June monthly closings Nifty(4040.55) & Sensex(13461.60) too. VIX closed at 34.27 yesterday but intra day high touched was 77.68, the highest so far is disturbing. If indices have to rally it has to happen gradually with slow and steady long build up, till then, the fight between bears and bulls continues, where bears have upper hand right now. One day moves are generally traps unless follow up happens! Sensex has given bullish reversal signal on Japanese Candle Sticks charts with yesterday's move, thus, if one wants to look optimistic should have strict loss at June closing and 5DSMA levels for trading or investing in markets.

 

US markets have tanked overnight, giving away all gains posted previous day, and Asian markets are trading in negative territory currently. Singapore Nifty futures are currently quoting at 64 points discount, indicate weak opening for our markets, and whether buying support emerges at the levels mentioned above, need to be watched for continuation of rally. However, today, PM would meet President to brief on G-8 summit, Infosys results will be announced tomorrow before market opens and inflation data shall be released at 12 noon tomorrow, thus, nervousness and volatility shall continue to be the part of markets. Caution and preserving the capital and staying in and increase of cash levels will help us to pick up stocks at much lower levels in the days/months to come, as this bear market lasts for 12 months more from now on for certain, according to my reading.

 

Range for the Day: Nifty might trade in the range of 4040 to 4200.

 

Strategy for the Day: Buy 4200 puts on rallies and 4000 calls on weakness for intra day trading.

Left withdraws support to UPA government finally! Political rumblings will be at centre stage from now on!

Finally Left parties have decided to withdraw support to UPA Government, yesterday, on Indo-Nuke deal issue, as PM chose to go a head with the negotiations with IAEA and NSG. The letter of withdrawl of support will be handed over to the President today at 12 noon or tomorrow, when PM returns back to India, after attending G-8 summit in Japan. With this the Congress lead UPA government has become minority, and the damage controllers from Congress and its allies are confirming that they have the numbers to pass "confidence vote" on the floor of parliament when ever it is convened. Monsoon session of parliament is likely to begin in August, and according to Pranab Mukherjee Government wants to seek vote of confidence from parliament before proceeding to meet IAEA governors on 28.07.2008. In this case, whether an exclusive session shall be called for this 'trust vote' around 21.07.2008, is the guessing doing the rounds. How the number game is played from here on will send shivers through both the camps.

 

A clear winner in this shall be NDA, which is looking for encashing on failure of the government due to spiralling of prices, and back seat driving by left parties, hurting the reforms process. Congress achieved its goal, by getting rid of left parties, forcing them to withdraw the support, which they have been boasting during the entire regime, that they will not do, which helps BJP and its allies to regain power at the centre. If congress can muster the required support without left then that is very good news for the economy and equities. FIIs will have re-look at our markets if that happens. The survival of government is more or less assured as no political party is prepared for early election, because there might be 'anti establishment vote' as prices are soaring on all fronts. Infosys results will be announced on friday, but now the performance of stocks, sectors, etc., will take back seat and the political news will be at fore front moving the markets, according to me.

 

One uncertainity that left will withdraw support has gone which might give some relief rally to our markets today. Crude too cooled by 9$ in the last two days on the strengthening of US $, which has given relief rally in US markets overnight, which ended with good gains. Singapore Nifty futures are currently quoting at 85 premium suggest gap up opening initially, as asian markets are also trading in positive territory. Nifty futures closed at a discount of 62 points, indicating continuation of shorts, which will be covered only on spot nifty closing above 4120 with good volumes. Thus, nifty will oscillate between 3850 to 4150 for some more time, and break out from the range will decide the larger move in the days to come. VIX has closed at 36.04 indicating continuation of volatility.

 

Strategy for the Day: One can short the Nifty futures at the opening with a stop loss of 25 points from the high at that point of time, for intra day trading.

Are we now in to longer and deeper bear markets?

The behaviour of our markets along with global indices confirm that now we are experiencing prolonged bear markets, and the cuts in prices of stocks will be still sharper in the months to come, as the macro economy developments, political uncertainities, raising interest rates & inflation, help bears to make merry on dalal street. The fall from all time top made in January'2008 on both Nifty and Sensex is already around 40% and indices are struggling to close above 5DSMA itself on rallies confirms this view.

 

The huge discount on Nifty futures month after month hovering around 60 points help bears to press further sales on any small negative news, and today no body speaks of forward valuations, growth stories etc., Any small rally is immediately sold into by the trapped investors, who are preferring to stay in cash. Because in these times, staying cash and if one is professional trader, having technical knowledge of stocks and indices, can be a nimble trader, to make small profits.

 

Having experienced long term bear markets from 1990 to 2003, indian investors, funds have not recognised the on set of bull market initially, and by the time everyone realised, always 'buy on dips was a successful theme' which helped investors to make huge profits till January' 2008. Since then, every correction was bought into by funds and investors, with the hope that once the highs made in January 2008 is surpassed they will make huge profits. But, unfortunately, as the idiom goes "People think that it is a correction in bull market, where it is on set of a bear market, and by the time one realises, enough damage must have been done already'. Same thing happened now during this year so far, so it is better one realises not to average the stocks, portfolios, but sell on rallies and keep cash levels high, may be invested in dividend yieling stocks or other asset classes, till the confirmation of ending of bear market is known.

 

How deep the markets can fall? The answer is little disturbing...as they can fall 55% from the top...Sensex can come down to 9543.05 or even 9914.20 which is 61.8% retracement level of entire bull rally commenced from 2934. Corresponding levels on Nifty are 2860.70 and 3006.67.

 

According to my reading the raising gaps created in this multi year bull run at 8929.44 to 9092.16 on 15.06.2006 need to be filled, from where an upward journey can begin. Similar raising gap created on Nifty at 2632.80 to 2634.10 on 15.06.2006 need to be filled in the downward journey. These are very scary figures, but facts, as growth slows down due to spiralling inflation, higher commodity prices, especially crude disagreeing to cool down. The gloom and doom situation shall continue atleast till the end of June 2009, thus, exiting profitable stock positions and increasing cash levels on rallies, shall help investors to churn their portfolios intune with fall in indices.

 

Weak has begun on positive note, amidst volatility!

After posting straight losses for 6 weeks, indices have opened in positive territory, and traded most part of the trading above June monthly closings, Nifty(4040.55) & Sensex(13461.60), gave away most of the gains in the last one hour of trading, fearing the political instability, as PM proceeds to attend G-8 summit, in Japan, and confirming that the government is committed to move a head with Indo-Nuke deal. Left parties have advanced their meeting to 11.30 a.m. today, to take the decision to withdraw the support, and handover the letter to the President, once PM is back in the country, on 10.07.2008. The support extended by Samajwadi Party having 39 MPs, and other small parties might save the government from falling when trust motion is moved in the coming days, as President would advise the government to seek vote of confidence, once left parties handover the withdrawl letter. The nervousness in the markets is on two counts: Mulayam singh yadav is an astute politician, who can change stances very quickly, owing to the situation as it developes, and Mayawathi, is not leaving any stone unturned, in ensuring that Mulayam singh party will not gain any political mileage in this government saving deal, which shall affect her position in the largest state of the country., Uttar Pradesh.

While the political situation is fast developing into likely throwing instability at centre, the talk to tax the private oil producers and refiners with 'windfall gains tax' has hurt Reliance, Essar Oil and Cairn severely in yesterday's trading. Infosys Technogies Q-1 results will be announced on 11.07.2008, and the wekening of rupee should help it to post good performance. Clinching of Nuke deal will help power sector, and crude has cooled to US$141 in yesterday's trade, will give some relief to markets. VIX has closed at 37.29 which indicates volatility to continue. Nifty and Sensex have closed above 5DSMA yesterday, and should these levels hold in any weakness the indices are likely to advance further this week. Nifty futures have closed at a steep discount of 50 points suggests huge short positions built, which will cushion any weakness and turn of positive sentiment, will push 'short squeeze' which can be exploding. Singapore Nifty futures are currently quoting 47 ponts discount, suggest weak opening for certain, as US markets closed negative overnight, after along week end, and asian markets too are trading in negative territory.

Range for the Day: Nifty might trde in the range of 3900 to 4150.

Strategy for the Day: Buy Nifty futures at the opening with a stoploss of 25 points below the purchase price, for intraday trading.

Raising Crude Prices, Inflation, Interest rates and Political uncertainity helping "Bears & Short sellers"

The writing in on wall for certain, we are into a deep bear market. Every indices globally are making new lows during this year, some breaching 52 weeks lows too, after making all time highs in January'2008. Nifty once again drifted below 4000 mark yesterday, only silverlining was our indices did not breach wednesday's lows. 3800 to 3850 range should offer support for the market today, in case of any weakness and Nifty might consolidate in the range of 3800 to 4200 for some time, before the next major move takes place. Crude breached US$146 now, after ECB raised interest rate by 25 basis points to 4.25% to check inflation, dollar weakend further against Euro. US markets closed mixed ending the truncated weak with losses yesterday. They are closed today for "Independence Day". Nifty futures discount rose to 46 points yesterday while VIX closed at 36.26. Singapore Nifty futures are currently quoting at 20 points premium, might give positive opening for our markets initially.

 

Inflation data to be released at 12 noon is expected to be around 11.5%, and any nasty surprise shall help bears to hammer indices further down, as buyers just vanished. Government insisting on Steel companies to hold prices for another 3 months, has hurt Tatasteel and other stocks in the sector, which joined the falling crowd. 3814.26(Nifty) & 12724.06(Sensex) are the 40% retracement levels from all time highs, which should invite long term investors to put money as domestic economy and corporate performance appear to be intact for the present. Indices have recorded 6 straight weeks of losses and shall be recording another weekly loss today too, thus completing 7 weeks in a row. 8 being fibonacci number there might be a relief rally from monday onwards pricing in expectations on tech major Infosys, which should be good, as rupee weekened to 43 during the last quarter.

 

If 3800 on Nifty is held then the relief rally can be there upto 4400, where some selling can be expected, from the trapped investors/bulls. Today's closing will give some clue for the next week movement.

 

Range for the Nifty: Nifty might trade in the range of 3815 to 4050.

 

Strategy for the Day: Buy 3800 calls on weakness and hold them till 08.07.2008.

Short Squeeze pulls up indices to gain 5% after continuous fall! Will follow up buying emerges?

Both indices have made new lows yesterday for 2008, on the news that UPA government will be safe, even if left parties withdraw support on much talked Indo-Nuke deal stand off, lead to short squeeze, which was clearly visible as the discount of Nifty futures came down to 30 points from whopping 65 points, with reduction in open interest position in Nifty futures outstanding in current series. More than 50% of fall in the last three days is thus recovered, which satisfies the principle of relief or dead cat bounce after such carnage. What will happen now? Both indices have closed around 5 DSMA levels Nifty(4096.63) & Sensex(13662.39) yesterday finally, which need to be protected on closing basis today for further gains. Will it happen? I doubt that it is not possible, as more uncertainities await today / tomorrow to haunt equity markets. UNPA meets today to decide on its stand on Indo-Nuke deal, PM decides to attend G-8 summit on 07.07.2008, Inflation numbers to be released tomorrow will keep fingers crossed. FIIs continue to be net sellers as rupee is weakening and prices of stocks are falling.

 

US markets opened positive, but ended with losses, as crude cuised to US$144, yesterday. Important economic data will be out today from US, ECB decides on interest rates today, tomorrow being Independence day of USA(04.07.2008), US markets will trade today only. Asian markets are trading weak and Singapore Nifty futures are currently quoting at a discount of 72 points indicate flat to weak opening for our markets today. Whether re-test of yesterday's lows will happen today/tomorrow is the important point to have confirmation of at least short term bottom formation, where one can consider keeping overnight long positions, till then it is traders delilght only!! VIX closed at 35.38.  

 

Range for the Day: Nifty might trade in the range of 3850 to 4150.

 

Strategy for the Day: One can short Nifty futures at the opening with a stop loss 25 points above the high of the day for intraday trading.

Carnage on Dalal Street! Nifty closes below 4000!

It is another down day on dalal street, the bears are having field day, as they are able to break the back of the final small bull too, bringing the indices below 4000 on the first day of July'2008 itself. Nothing much to write about any technicals, since indices are making new lows of 2008 almost daily, where as they were making new highs during the bull run during 2005 to 2007; the reversal of long term trend is quite clear now, where the indices find at least a short term bottom, should be watched with patience. Catching a falling knife hurts severely, However, as no body can predict a bottom, one can pick up dividend yielding stocks of Public Sector, banks, companies, which mostly cater to the domestic economy, will give minimal capital loss in case of further damage, as they have low 'bee ta'. US markets through traded in negative territory for most part of the time, recovered in the last one hour of trading and closed with gains. VIX closed at 31.46 yesterday.

Asian markets are trading negative territory, Singapore Nifty futures are trading at 30 points premium to previous closing price of nifty futures currently. UPA appears to mustering the necessary strength in parliament, by roping in Samajwadi Party having 39 MPs, in case of left withdrawing support on Indo-Nuke deal pursuation, cools nerves on the early elections threat troubling the markets. Nifty futures closed at whopping 64 points discount due to huge short positions built in the last hour of trading, as short sellers are comfortably making money intraday for the last 40 days or so., Indices are near strong support zones, where once, FIIs stop selling and start covering there will be huge upsurge, one should have strict stoplosses on alll short positions from now on. When the tide turns against no one can predict!

Range for the Day: Nifty might trade in the range of 3750 to 4050.

Strategy for the Day: One can go long on Nifty futures at opening price, with a stop loss of 25 points below the purchase price for an intraday upswing.

First Half 2008 ends with losses of 35% of indices from all time top!

All the hopes that some fund buying to prop up the NAVs on at least last day also are watered down, due to panic selling by all classes of investors, as crude makes all time high once again, domestic political uncertainity reaching culmination with CPI(M) confirming withdrawl, if Government proceeds with pursuation / negotiation of Nuke deal. ECB might increase the rate during this week, to check inflation, which inturn weakens the US $ further, also lead to weakness in global markets, as commodities prices may not cool in the near term. Nifty futures closed at a discount if 68 points finally, indicating further weakness. VIX has closed at 30.96, however, intraday high was 64.39 suggests higher volatility to continue.

 

US markets opened in positive territory overnight and were volatile finally closed flat to negative. Singapore Nifty futures currently quote with 25 points premium to the yesterday's closing of futures, however, well below the spot closing of 4040.55. Nifty level of 4000 is crucial on closing basis today, for any stability or relief rally later, failing which deeper cuts can be expected as huge positions of 4000 puts are built in current series. Asian markets are trading in positive territory at the opening, and indices might trade in a narrow band today, as major selling is done for the present.

 

Range for the Day: Nifty might trade in the range of 4000 to 4150.

 

Strategy for the Day: Buy Nifty futures at the opening with a stop loss of 3950, and move the stop loss up as nifty moves up to maximise gains.