On friday, our markets have posted gains after volatile trade during the day, registering 5th consecutive weekly gains, and more importantly Nifty managed to close above 4500 level fourth day in succession. US markets rallied strongly on friday, due to strengthening of dollar, which pushed crude price further down to 115$, breaching the technical level of 117$ observed by most oil analysts and players. VIX closed at 35.67. Singapore Nifty futures are currently quoting with hefty premium of 70 points and asian markets are trading with gains, augurs well and positive gap up opening for our markets too. However, 100DSMA levels currently placed at 4612.79(Nifty) & 15407.49(Sensex) are proved to be supply zone every time bulls tried to take the rally further, are to be watched for clues today and during this week. This week is a truncated one with 15.08.2008 (Independence day) being a holiday, and the relief rally too recovered 50% of the losses from the top, the indices might consolidate at a higher band during this week, say 4400 to 4650 and move higher later from next week, if the commodity prices continue fall / cool further. Any closing below 4500 today or during this week should be noted as termination of relief rally and indices will resume their down ward journey once again, as the concerns on Indian Economy and global slow down cannot be wiped in days/weeks.
Investors holding profitable positions should book profits on rallies from now on, as markets will give ample opportunities down the line, where they can pick up the same stocks at lower prices.
Range for the Week: Nifty might trade in the range of 4400 to 4650.
Strategy for the Day: Buy 4600 puts on rallies for intraday trading.
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