Nifty found support at 5DSMA so far this week, if held will bounce to clear the 4400 mark!

Our markets have faced selling pressure on monday, after touching crucial level of 4300 being the 50DSMA and closed negative. The nervousness continued on tuesday, as global cues were weak, and nifty found support at 5DSMA level and closed around it on closing basis. US markets were volatile overnight and ended with losses as the bail out plan of 700$ billions from Government details are not yet clear. However, Warren Buffette deciding to invest 5 $ billion with Goldman Sachs and US senate committee clearing the Indo-US Nuke Deal with 19-2 vote, are positive for our markets. Today being the penultimate day, short squeeze cum long roll over to next series can be expected, as PM Dr.Manmohan Singh meets George Bush tomorrow to finalise the deal. Tomorrow is the settlement day for current series, and inflation data will be known after market hours, which might be around 12% levels, with which markets have learnt to live. Crude and Indian currency also have become too volatile which is reflecting in equity and bond markets too. VIX has closed at 38.74 and Singapore Nifty futures are currently quoting mildly positive.

Watch 4250 to 4300 levels for resistance in case of any rally today, and markets will be volatile having two way movement as the roll over to next month series is still to pick up. Once the derivatives settlement is over tomorrow, market players will concentrate on next month results, some fund buying til 30th can be expected to push up the indices, as they would like to show better NAV performance, for the month, quarter and halfyear!

Range for the Day: Nifty might trade in the range of 4100 to 4250 today.

Strategy for October: Buy 4100 call and put option of October series and hold them till 15th October for good returns as the markets are likely have wild gyrations.