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.
1 comment:
Hi,
like your views on the Nifty. Would like to invite you to join us at www.TradingArcade.com where you can add your blog address and post/view trading records of fellow traders. I'm sure your insight on the Nifty will be valuable for those who have not traded in it. Hope to see you as a member of the team. Thanks.
Dave (nikkeitrader@gmail.com)
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