All markets have posted gains on the first day of this week, after a historic mayhem week. Crude is hovering around 80$ and with US markets posting one of the largest gains in percentage terms overnight, is already having its rub off effect on asian markets. VIX has closed at 46.49, and Singapore Nifty futures are currently quoting at a premium of 162 points, suggests strong gap up opening for Nifty & Sensex, where short covering can push above 3500 zone, which I was referring yesterday. 3700 to 3800 area which offered strong support on 4 occasions earlier shall be the supply zone for this relief rally. Volatility levels are high, once again, so trading with leveraged funds will hurt severely, if caught on the wrong foot.
5DSMA of Nifty currently placed at 3498.49 shall be comfortably overcome today, and 20DSMA is currently placed at 3915.38 will be far away to reach. Nifty might trade in the range fo 3500 to 3715 today, with an upward bias. Buying at the opening may not give any gains, when such huge gap up openings occur. However, investors who entered at lower levels on friday, with courage, can book 50% profits around 3700 levels on Nifty, as the bear grip will not be let loose in near term.
One should watch the Rupee : US dollar exchange rate, vs indices movement, to understand the FII flows and their activity, who are literally dictating the fate of all emerging markets. If indices go up with buying from FIIs rupee will strengthen from 48.10 to say 47.40 , 47.10 in the days to come. Naturally with 5% gain on exchange rate and 15 to 20% gains on indices, once again they will off load the trapped PN holding positions, as we near 31.03.2009 dead line set by SEBI. Thus, one need to understand and look from all these various permutations and combinations.
Range for the Nifty: Nifty might trade in the range of 3520 to 3720 today,
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