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.