Our markets opened positive, initially and in minutes profit booking brought the indices into negative territory. Since every analyst was suggesting 4740 and 5000 on Nifty in this run, the weakness was bought into buy the traders, who might have been hurt badly on the disappointing IIP numbers released in the afternoon, which confirmed slowing down of our economy due to macro factors viz., raising inflation, crude prices(though corrected 20% recently, still they are well above tolerable level of 66$ for our economy) and widening fiscal deficit. Technically our markets and some stocks have reached over bought levels, the 100DSMA level 4612(Nifty) & 15410(Sensex) were breached quite effortlessly. However, both indices have closed around 5DSMA levels Niftty(4548.71) & Sensex(15223.38) at the end of the session, still holding previous week's closing levels. VIX has closed at 33.89 registering 8% gain over yesterday's close, suggests return of volatility. Nifty futures have closed at 8 points premium, and short build up is seen in today's trading. US economic data just released suggests contraction of trade deficit to 56.4Billion$. Crude is currently trading at 115$ after touching 113 recently.
NSE has announced introduction of another 39 stocks in Futures & Options category from 21.08.2008. SEBI meets tomorrow and is likely to state the current status on Participatory Notes and the press meet of SEBI Chairman after market hours, will throw more insight on the current FII flows and futuristic view of flows. Nifty shall move sideways tomorrow and rallies might be sold into, as two more trading days are left for the week. 4650 upper band indicated for the week in yesterday's posting has found the resistance exactly today, and might continue for the rest of the week, in my view.
Range for tomorrow: Nifty might trade in the range of 4450 to 4650.
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