Whether the correction is completed at the bottom of 03.11.2009???

The volatile movement of yesterday on our indices, must have hurt both the bulls and bears (traders) as the range was wide, and stoplosses triggered on either side. The ultimate bull charge in the last hour of trade, forced short covering by intraday traders, which made Nifty to close above 4750 level and Sensex above 16016 finally. The overnight strong rally in US markets will certainly push the indices further up, possibly with gap up opening today, as indicated in SGX quotes (where nifty is trading around 4826 level) and whether a bottom made on 03.11.2009, will hold for now is the question on everybody mind as the sentiment turned negative.

 

Peculiarity of market dynamics is they tend to correct when everybody is bullish and looking for higher levels, with complacency, and reverse the trend and start going up, when the mood is of pessimism. FM announcement on disinvestment of existing PSUs and unlisted PSUs to bridge the Fiscal Gap, was mostly welcomed by FIIs and DIIs. US markets rallied as senate approved unemployment allowance support for another 20 weeks, and the production data, jobless claims etc., came positive. Dow finally closed above 10000 and Nasdaq climbed 2100. Back home, inflation data was not announced yesterday, as the Government decided to announce it on monthly basis, shifting the base also from 1993-94 to 2003-04, from this month onwards.

 

Nifty is exactly at the mid point of 4500 - 5000 range advocated by me, and I expect today being the last day of the week, after a gap up opening profit booking might come around 4840-4860 levels, where 50DMA is placed. One may buy 4900 puts on rallies and 4700 calls on weakness for intraday trading for quick returns, using adequate stop losses, as per one's own risk perception.

 

Range for the Day: 4650 - 4750 - 4800 - 4850