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.
3 comments:
dear sir,
FII are net buyers in F&O segment? whether this will affect the range? i think it may prevent fall in market
saba
FIIs were net buyers marginally on 01.07.2008, where as they were net sellers in cash market Rs.600 crores, yesterday(provisional)data. They will do arbitrage and reverse arbitrage in volatile times.
When short positions in nifty futures are closed, they will sell in cash, that is how they operate. What we need to see is build up of long positions in index heavies, with price raise, and net inflows along with improved volumes and larger participation.
That is the clue!
bkvrkrao
What a prediction of down fall today!
Congrats. Keepit up
anush
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