The initial positive opening was sold into yesterday, and the late hour selling by FIIs brought the Nifty to sub 4000 levels at the end of the trading. On adjustment Nifty managed to close at 4008.25. The mayhem in US markets on the panic selling by investors fearing the spreading of credit crisis to other institutions. The news that Morgan Stanley also likely to be in trouble is now pointing to greater trouble to equity markets world over, which is the reason why the investors are flying to safety...Crude and Gold have raised overnight. Dow which was holding 10700 multi year support during this year so far, which is observed by all technical analysts, has gone yesterday, is very disturbing news for US markets and world markets too.
Singapore Nifty futures are currently quoting at steep discount of 154 points will give a straight cut of 4 to 5 % straight away for our indices at the opening itself. The mute question will be whether 2008 lows will be tested or breached today/tomorrow. While the valuations of our markets are not that high. the sentiment is worst and complete risk aversion, makes buyers to stay away from equities. VIX has closed at 33.99 yesterday. June quarter closing of 4040.55 (Nifty) & 13461.60 (Sensex) are breached yesterday on closing basis too, in any possible relief rally which might come tomorrow or monday onwards, whether these levels will be cleared need to be watched. In case these levels are cleared in the next 3 trading sessions, our markets will breach the 2008 lows and the trading band of Nifty will shift downwards to 3500 to 4000, making things worse for the next quarter. Traders and investors should for calmness to return to the markets, as we may be near a bottom, if 2008 lows are held today/tomorrow! Inflation data is likely to be sub 12% levels which will be released after market hours, will not be of any significance, as the sentiment to equities is completely negative.
Range for the Day: Nifty might move in the range of 3840 to 4040 today.
Strategy for the Day: Buy Nifty futures at the opening with a stop loss of 50 points from the purchase price for intraday gains, if one is high risk trader.
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