"Outlook for the Week "FOMC meet on 11th holds key for Markets"

'Our indices have posted gains during last week, amidst huge volatility at psychological levels of 6000(Nifty) & 20000 (Sensex); as investors preferred booking profits, and wished to stay in cash, with the past experience, markets turning weak, number of times. However, Both Nifty and Sensex have closed above October closings on friday, while nifty closed at all time highest closing, confirms strength in the markets. Nifty posted new highs successively after breaching previous high, while Sensex is struggling to close above 20K. US markets are expected to react to the FOMC meet decision on 11th on interest rates, Discount rates, and out look on economy to be revealed by Mr.Bernarke, chairman.

This week is important for our markets too, as corporates would be pressing sales on investments for raising liquidity for meeting Advance Tax payments, by 15th December 2007, for this quarter. We can expect huge volatility on Nifty, as the outstanding positions are high, and information flow from overseas as well as domestically, can influence the markets in either direction. Nifty might trade in a broad range of 5850 to 6050 during the week and break out in either direction, with volumes decides the short term trend, while the long term and medium term trend are firmly positive for our markets.

Strategy for the Weak: Buy 5750 calls on weakness and 6050 puts on rallies for quick returns.

Outlook for Thursday "Nifty likely to clear 6000"

Our indices have opened firm and traded strong throughout the session on wednesday, with all round participation, adding open interest position in both stock futures & index futures. Nifty has closed at all time high closing on daily charts, clearing October closing of 5900.65, clearly given a break out on upside, as predicted in our report dated 29.11.2007; while Sensex is still struggling to clear October Closing of 19837.99 (which might take place today)

 

"Since our indices, both Nifty and Sensex have completed 61.8% of retracement of previous week's range, they should give an upward break out initiating a fresh rally from today which might take the indices to test previous highs in december, with huge volatility."(from 29.11.2007 report)

 

Wednesday's recovery in asian markets, and rally in European markets and US markets overnight, cofirms gap up opening for our indices today, sustenance of the same for initial one hour, forces short squeeze, as many players are expecting that 6000 level is very difficult to cross. Markets will be firm till 11.12.2007 where FOMC will come out with the decision on interest rates, out look for future. Since, Bull and bear camps are equal in number at this point, huge volatility can be expected.

 

Strategy for the Day: Buy 5800 calls on weakness and 6000 puts on rallies for quick returns.

Out Look for December

"Our indices have closed positive on Friday & week on week basis, after smooth roll over of positions to December Series, however, closed negative over October closings, amidst huge volatility during November. Markets have given a break out on upside by closing above 20DSMA on 30.11.2007, and shall consolidate at higher levels till the unfolding of events viz., FOMC meeting on 11.12.2007; Data on Advance Tax Payment by 15.12.2007 and the out come of Gujarath & Himachal Pradesh assembly elections result by 22.12.2007.

 

Since April 2005, our markets have not posted 2 consecutive negative closings at any point of time, and after every correction indices have posted new highs. Generally December is a good month for equities, barring unforeseen developments gloabally, this month also should have a positive closing over November, ofcourse with volatility, as we are at all time highs.

 

For confidently going long on markets clearing of old highs on Nifty / Sensex with volumes and participation is a must, till such time the markets are likely to consolidate in a wider range, and remain to be a trading market during the month. The levels to watch for any weakness are 19200 (Sensex) and 5740 (Nifty)

Out look for Thursday "Huge rally with an upward break out in store"

"Inspite of positive closing of US markets which bounced from lows on Tuesday night, Our markets turned volatile, due to unwinding of long positions and huge shorts created a head of derivatives settlement on 29.11.2007 ; anticipating down ward break out by majority of players. Nifty broke few important supports in the last hour of trade, due to triggering of stop losses, and closed below 5DSMA, where as Sensex is resting on 5DSMA exactly.

 

However, the positive feature is both the indices are holding above previous week's closings, the big rally in US & Europen markets on positive indication of another Fed rate cut on the ensuing FOMC meeting on 11.12.2007, and fall of Crude to US 91$, shall give phillip to the bulls, to give a gap up opening on Thursday, is a foregone conclusion. Since our indices, both Nifty and Sensex have completed 61.8% of retracement of previous week's range, they should give an upward break out initiating a fresh rally from today which might take the indices to test previous highs in december, with huge volatility.

 

Index funds would like to see the closing on friday, 30.11.2007, being the last day of the month, also to clear the October closings, to prop up NAV.

 

Strategy for the Day: Buy 5600 Straddle of Nifty  in December series for substantial returns, intra day too.

Outlook for Friday "Relief Rally on cards"

"Our indices have turned quite volatile as was anticipated during the month of November, 2007 in the absence of any domestic cues, totally aping global markets. Nikkie, Dowjones and Nasdaq entered bearish trend in the past few days, the rub off effect is felt on our markets too. Profit booking at higher levels and small buying support at technical levels of our indices, by long only funds are making our markets look resilient, though clear distribution cum consolidation pattern is visible on medium term charts. Bearish cross over has resulted in yesterday's trading indicating frim grip of bears on our markets. Since our markets have seen negative closings for 6 days in a row, a relief rally can be expected today. The way indices found support at 50DSMA ( Nifty 5393.99 & Sensex 18258.54) intraday number of times and closed firm in last minute short covering augurs well for bulls today.

 

Nifty spot and futures were at 5600 at the end of the session though on weigted average adjustment came down to 5519.35 (spot) & 5536.20 (November futures). We can expect gap up opening taking positive closings of European markets overnight, US markets were closed yesterday on account 'Thanks giving Holiday' and asian markets are indicating positive openinig after recent carnage. US futures after market hours point to positive opening today, however, volatility shall continue, as we are heading into settlement week, where huge outstanding positions are to be rolled over to December series. Inflation data shall be released at 12 noon shall be watched by players very closely, to guage the policy stance of regulators and policy makers.

 

Strategy for the Day: We expect Nifty to settle around 5850 on settlement day, as per the trading pattern observed till date, in derivatives; hence, one can buy 5400 calls on weakness and 5750 puts on rallies for quick returns today.

 

 

Outlook for Tuesday "Bearish ness continues"

"November month is witnessing volatility and global sell off, due to huge write downs by financial companies of US, due to subprime losses, and resultant signs of economic slowdown, now looming large. Our markets started correcting from 05.11.2007 onwards were making lower tops and lower bottoms on daily basis, breaching 5DSMA & 20DSMA in the process, by yesterday. Though there are bouts of buying at key support levels, by DIIs and HNIs, the unabated selling by FIIs who have to reduce the postitions created under ODI, are putting pressure on our indices. Yesterday Nifty opened weak and buying support at lower levels around 5500 and short covering in the last one hour turned Nifty futures into premium of 25 points at the close.The traded volumes are low on rallies while they are high when markets correct, is an indication of short term bearishness.

 

US markets opened positive and traded firm but, selling in the late hours brought both Dowjones and Nasdaq below/near 200DSMA overnight. Nickie is already in bearish trend, thus, the global cues do not support any relief rally in the near future, in the absence of any cues for our markets. Investors are advised to sell into rallies and stay in cash, for picking up the quality stocks at lower levels, in the days to come. Nifty might test 50DSMA currently placed at 5188.76, in case it breaks 5410.76, which is 10% retracement level during this week.

 

Strategy for the Day: Buy 5400 calls on weakness and 5800 puts on rallies for quick returns.

Outlook for Wednesday

"Our markets have posted all time highs last week, and closed at all time highs on 02.11.2007; and in the absence of any news flow, moving sideways since this monday(05.11.2007) following global cues. The irrational exhuberance noticed in Reliance group small price stocks like RNRL and Reliance petroleum, has met with spead breaker yesterday, as though the business models are exciting for both companies, the delivery of returns is yet to be seen in terms of performance. While RNRL has a dispute to settle with RIL on gas purchase formula and Reliance Petroleum is yet to be commissioned and commence commercial production. Banning of fresh ODI by unregistered FIIs and their subaccounts, has put a halt on capital flows since 26.10.2007. However, our markets did not crash, due to the strength and support from DIIs and retail, who are maturing to enter on dips, a head of "Diwali" an auspicious occasion for most of the Indians, as New year begins, where accounts are opened.

 

Nifty futures have closed at 16 points premium, after huge volatile session, which was an 'outside day' and nifty spot closed below 5DSMA 5867, while Sensex 5DSMA stands at 19706. Today, is "Dhan Therus" where sentimentally every indian makes purchases, which is supposed to be auspicious, and with support from strong global cues from US markets which closed with substantial gains, our markets shall open with a gap up and should clear the above levels initially, and might march a head to challenge previous strong resistance levels, 5976 (Nifty) & 20033 (Sensex) in the process, on heavy short covering, as yesterday's fall was a bull trap, in our view. Accumulate FMCG majors HUL and ITC which have found stability in these volatile times, for long term appreciation.

 

Strategy for the Day: Buy 5700 calls in the opening trade and 6000 puts on rallies for quick returns, for this week.

Outlook for Friday "Volatility to live with it"

"Our markets opened firm taking positive global cues, and profit booking made the indices volatile and finally closed in negative territory. Nifty touched new high at 6011.95, while Sensex is unable to close above 20000 mark, though an attempt is made thrice during the week so far at the opening of sessions and intraday, suggests that investors are cautious at higher levels, is a good sign for the markets, in the long run. Nifty futures closed at a steep discount of 41 points, on creation of short positions once 5850 was broken intraday, indicates further weakness.

 

 Crude touching 96$, and down grading of citibank by analysts brought huge selling in US markets overnight, which will lead to gap down opening on our indices too. Asian markets have opened weak already, and the inflation data to be released at 12 noon shall decide the trend for our markets. 5% correction levels from recent tops on Nifty(5711.35) & Sensex(19226.25) should offer buying support in case of weakness in our markets intraday, as India story is very much intact. Buying in blue chips which have given good performance Q2 is recommended for substantial gains in the future. Any weakness in indices is a buying opportunity, as the markets are in sideways consolidation mode, after a spectacular run for the past 2 months.

 

Strategy for the Day: Buy 5700 calls on weakness and 6000 puts on rallies for quick returns in day trading.

Out look for November " Nifty scales 6000 and retreats on Profit booking"

"This week and October month were quite eventful and historic for our markets and as well as global markets. Our indices have closed at all time highs on 31.10.2007, inspite of heavy volatility swings during the month, taking CRR hike in their stride, owing to good corporate performance for Q2 and assuring better performance in future. DIIs and Retail are participating in a big way in the absence of PN players, who are banned since 26th october, 2007. November promises to be another good month, especially Diwali "New year" being observed as an auspicious occasion by many players and investors and indices shall continue to post gains till 9th Diwali, on sentiment basis.

 

US FOMC meeting last night, has cut the Fed interest and the discount rates by 25 basis points as anticipated, however, indicated that there will not be further cuts in December meeting. Crude touching US $ 96 and slowing of home sales market, are a cause of concern for US economy. We are in for times of huge volatility as indices are trading at all time highs, daily volumes are averaging more than a lakh crores, one has to exercise caution in trading, as stop losses get triggered on either side easily. RBI and Finance Ministry are having the problem of huge capital flows on hand, raising crude prices are making oil marketing companies to bleed, raise in petrol prices is being put on hold as it would push inflation and input costs.

 

Technically Nifty can go upto 6550 if 5614 is held on weakness during the month. Any weakness is a buying opportunity in quality blue chips which have proved their performance in this quarter for long term accumulation.

 

 

Outlook for Monday and Week " Sensex makes new High and closes at all time High"

"With smooth settlement of October derivatives series and roll over on 25.10.2007, SEBI's PN guidelines being in line with the draft guidelines issued on 16.10.2007, there was a sigh of relief on friday among market players, resulting in net addition of long positions in November series. Sensex touched new high ( 19276.45) on new found enthusiasm, and closed at an all time high at 19252.35, Nifty too closed at 5702.30, as the inflation data was reported to be flat at 3.07 week on week basis. FIIs were seen covering short positions heavily on 25th and 26th and their net postions are marginally down week on week basis. Domestic Institutions and retail investors were buying which have resulted in speactacular gains of over 9% on Nifty and Sensex week on week basis. Nifty futures closed at a premium of 10 points indicating bullish sentiment. It is to be seen whether Nifty too will clear the previous high of 5736.80 today or this week, in which case markets will have a rally to post 5927 on Nifty and 20538 on Sensex respectively by or before Diwali.

 

US markets closed positively on friday, on expectations of fed cutting either discount rate or interest rate in ensuing FOMC meeting on 31st October'2007. RBI comes out with credit policy on 30th October, 2007, where the stance on CRR, interest rates, and stance on inflation etc., will be revealed. Generally it is being believed that in view of capital flows stabilising, unlike previous month, hike in CRR is not expected. Markets shall continue to be volatile during this week too, till the events pass smoothly, and a mild rally can be expected upto Diwali (9th November 2007), as the Q2 results are generally in line with expectations and surprised on upside in number of cases.

 

Strategy for the Day: One can buy a straddle of 5700 on Nifty for quick returns in day trading.

Outlook for Friday

"Our markets opened firm, due to follow up buying and short covering a head of SEBI board meeting, on the derivatives settlement day, and finally closed in positive territory, with less volatility. SEBI has announced its new regulations / norms on treatment of "P Notes" with immediate effect more or less in line with draft guidelines issued earlier on 16.10.2007. Now it is law and P notes issued by sub accounts which are ODI have to be wound up in the coming 18 months, and also these type of instruments cannot be issued from immediate effect. An estimated investment under this category of US$ 34 billion, has to be swapped with other eligible players or wound up gradually, or get the entry through front door, that is by registering as FII with SEBI, for which most of the participants have already submitted a letter of intent, as directed by SEBI already. They need to file the application within a week and if their applications are cleared then they can continue to enjoy the facility.

 

US markets were volatile, due to higher oil prices, and mixed earning numbers, and on slipping new home sales data, finally closing marginally in negative territory. Inflation data shall be released at 12 noon on our economy. Markets will concentrate on the FOMC meeting scheduled on 30th & RBI credit policy on 31st now, and position accordingly. More or less major results are out and are in line with analyst's expectations. TISCO will come out with results today, the liquidity from FIIs to our markets, in view of the polilcy changes, political situation will drive the markets from now on. We feel that the volatility shall continue till 9th November, Diwali, and from then markets may stabilise a bit. Since we are already at 18800 levels on sensex, it shall be prudent to sell a portion of portfolio on rallies, where as substantial gains are made, and stay in cash to pick up the same stocks or value picks at a later date, as markets shall provide such ample opportunities, in future. Nifty futures closed at 34 points discount to the spot indicate bearish view on the markets for today.

 

Strategy for the Day: One can buy a straddle of 5550 strike price on nifty in November series and leave it till the end of series.

Outlook of Wednesday - "Largest single day gains ever on Sensex"

"Sebi chariman's clarifications, relaxations and confirmation that there is no intention to ban "P notes" as being perceived by all, cheered the market participants, and there was a huge short squeeze, coupled with buying in index stocks by fence sitters lead to a remarkable recovery and the strength in the markets was unabated through out the session thus, sensex posted largest single day gain ever, which surprised everybody. Indian markets being high beta one the movement on either side shall always be above normal compared to other markets. Satyam results were above street expectations, and the guidance is aggressive, while larger players like Infosys are conservative. Nifty futures closed at a steep premium of 15 points to the spot in october series and november series are on par, shows the optimism of players, and the confidence of FIIs expecting not serious announcements from SEBI on 25th the 'D Day'.

 

Sebi chairman's statement that they are not concerned about  regulating capital flows, and their main concern is to implement KYC norms only, and the announcement that an individual with a minimum investment of US$ 50 million can also register as FII henceforth, is quite a welcome step, announced after close of market hours, shall encourage proprietory sub account holders to also register as FII direct, reducing the anonymity from majority of the investments, which are a point of controversy and debate for the past 3 years. FII registration procedure and processes will be streamlined and hastened up as informed by the chairman, is a welcome measure, hence, the roll over of positions and investment by FIIs, overseas bodies shall continue and might increase in the days to come.

 

FM statement that the issue of 'P notes' is important to regulate the capital flows in view of strengthening of rupee is contradiction to what Sebi chairman says; However, as a regulator SEBI is bothered about KYC norms as far as the investments are through proper channels and not from unwanted persons, entities or categories. Now what steps RBI takes in consultation with Finance Ministry when the flows continue and increase in the future shall decide on the movement of the markets, as once for all the issue of "P notes" shall be put on clarity after 25th October' 2007.

 

US markets were volatile overnight, however, closed in positive territory aping the asian and european markets, however, futures point to negative indication, so our markets shall open positive and move up at the opening, and due to roll over shall be volatile, and profit booking can be expected at higher levels today, a head of expiry of October series and SEBI board meeting on tomorrow.

 

Strategy for the Day: Tomorrow's derivatives settlement should be positive over previous weeks close and as indices have closed above 5DSMA yesterday, one can buy 5250 calls on weakness and 5600 puts on rallies for quick returns. 

Outlook for Tuesday

"Our markets have opened with negative gap, following global cues, however, due to roll over of positions to next month series, traded volatile in a range, and filled the gaps intraday. While Sensex posted marginal gain after posting 4 days losses, nifty closed in negative territory at the end of the session. Nifty futures closed at a discount of 9 points, as some shorts are closed in the morning session and rolled over to November series, as discount of november series stands at 28 points.

 

SEBI chairaman had a conference call with FIIs, and clarified the stand on draft regulations, asserting that the stand is clear that in medium to long term "KYC is the key issue", though ban is not the intention. Few concessions and relaxations are given like, proprietory clients who are operating as sub accounts also can register as FIIs in the direct channel. As of now 3000 + sub accounts have to convey to SEBI whether they are intending to convert to FII withing 24 hours, and submit regular application with in a  week.25.10.2007 Board meeting will put the classification of overseas investors, guidelines for registration, norms for trading and other complainces in place releasing the new guidelines, which give maximum time of 18 months, for phasing out the present ODI which are issued by subaccounts. More or less stand of SEBI is clear now, and it is for the FIIs, Overseas players to decide how they have to deal with Indian investments.

 

In our view, genuine investors and investments which came under this ODI shall not have any problem, and comply the SEBI new guidelines and continue to invest in our markets which are giving best returns. SEBI chairman assuring overseas investors, to hasten up registration procedure, and encourage more investors to come under FII route, shall encourage more flows and invetments in the years to come.

 

UPA - Left coordination committee, as usual met and decided to put the operationalisation of the US-Indo Nuke deal onhold, and meet again on 16th November, 2007 to come out with clear view on issues of concern on the deal. None of the constituents are prepared for pulling the government and thrusting the mid term poll immediately, so this shadow boxing shall continue for some more time. Results of Indian corporates are in line with expectations, and some have come with stellar performances, thus, any weakness intraday or in the coming days, is a good opportunity for entering markets.

 

Inspite of huge volatility, Nifty has not breached septemeber closing levels, though posted lower highs and lower lows yesterday. Sensex has breached the september levels intraday, however, closed above it yesterday. Our markets shall trade in a broad range of 5000 to 5700 on nifty and 17000 to 19000 on sensex, which can be treated a consolidation phase, till 31.10.2007, by which time all the events will pass, and shall rally till 9th november, 2007 as pre diwali enthusiasm will push stocks and indices usually. Volatility wil continue for rest of the year, as we are at very high levels, and indian markets are having higher beta, which give huge gyrations.

 

Strategy for the Day: Buy 5000 calls on weakness and 5500 puts on rallies for quick returns in intra day trading.

Outlook for Monday and Week

"Our markets have reached all time highs, witnessed circuit filters on down side, and extremely volatile during the past week, as predicted, and finally closed negative on thursday & friday, inspite of sterling results from TCS, WIPRO and RELIANCE. The weekly closing  was negative with large negative breadth, after a continuous positive closings for 8 successive weeks in a row. Nifty futures closed at a discount of 22 points to the spot on friday, suggests further weekness, as the cues from US markets and other asian peers are also supporting the view.

 

This is a week where October series shall be settled on 25.10.2007, and roll overs to next series are already on. Lots of news flow is expected from today which influences the market movement, rather than the fundamentals till 02.11.2007. SEBI holds an conference call with FIIs on eliciting their views on "P-Notes" today, UPA-Left co-ordination committee meets today to decide the stand on US-Nuke deal, where once again Left parties want to ascertain their stand that it should be put on hold, till all their concerns are addressed to their satisfaction. SEBI Board meets on 25.10.2007. to finalise the draft guidelines on treatment of P Notes. All this shall bring in huge volatility in markets where indices might trade in very large band, which is not seen in the bull rally so far. It is difficult time for even professional traders to trade with stoplosses, as VAR margin requirements will be very large, and hence, value picking should be the strategy, if one has increased cash levels, as we have suggested ever since nifty crossed 5500.

 

Indices have made a short top at 19198.66 (Sensex) & 5736.80 (Nifty) on 18.10.2007 though price wise correction of 10% on indices has happened on 17.10.2007, time wise correction is still due, may take time upto 02.11.2007, by which time, all issues will be sorted out, including the FOMC meet and RBI credit policy will throw light on interest rate scenario for the year.

 

Indices have closed below 20DSMA (Sensex...17822.29 & Nifty...5230.82) on friday, is a sign of weakness, and any rallies will face resistance at 5DSMA levels (Sensex..18476.80 & Nifty...5492.81), However, long term trend is intact.

 

Support for Sensex shall be at 16900 & Nifty at 4940 for the day.

 

 

Outlook for Friday

"In a remarkable way, indices have posted new highs Nifty (5736.80) & Sensex (19198.66), and filled the downward gaps created on wednesday, when circuit filters were on and gave an indication that the worst is over' ......it was a clear 'bear trap' and the bulls were complacent till the sudden collapse of the indices by 6% in the last one hour of trade, where stop losses were triggered, and even margin calls might have accentuated the fall, which was ferocious, and unnerving all players. At the end the indices, have closed below 5DSMA, and even previous week's closing, even on adjusted basis. Reliance results have come after close of hours, which are very good, but absence of any indication of bonus/stock split, which is the demand / expectation from large number of investors, shall be a dampner of the sentiment. TCS bagging multiyear outsourcing deal worth US$1.2 billion initially enthused the investors, and weakening of rupee marginally to 39.70 on account of FII selling, being good news to technology sector and export oriented businesses, there was considerable buying in the first half of trading.

 

Crude touched US$90 now on supply concerns, and disappointing performance from Bank of America has brought US markets into negative territory for most part of the trading, while Google's stellar performance of 57% raise in profits and FMs address and clarifications to investors at Newyork, in I-Sec meeting yesterday, on the recent steps proposed on "P-Notes' treatment in SEBI's draft guidelines, where suggetions are invited till 20th October' 2007, should throw some more assurance to FIIs that the regulators in India are not banning the investment through P-note route. Nifty futures are steep discount of 32 points to spot even on adjusted basis point to huge unwinding of long positions, and creation of short positions in November series where the discount is 44 points. Inflation data shall be released around 12 noon, results of Wopro, Baja Auto and ICICI bank are due to be announced today.

 

Our Markets will continue to be volatile till the end of this settlement as large outstanding open interest positions are to be rolled over to the next month series. News flow form SEBI board meeting on 25th, FOMC meeting on 30th and RBI's Credit Policy meeting on 31st etc are important events to influence stock, sector and market movement till 02nd November 2007.

 

Strategy for the Day: Buy 5000 calls on weakness in the market and 5600 puts on rallies for quick return in day trading.

Outlook for Thursday "Third time circuit filters on Indian bourses after 10% fall at opening"

"As anticipated, our indices had opened gap down, in a minute markets fell 10% over previous day closing, when the trading is halted as circuit filters were on. At 10.30 am FM came live on media to assure confidence, and Sebi Chairman's clarification on the position of roll over of positions to next series, as we are approaching settlement of this month series on 25th October'2007, brought confidence amongst investors, domestic institutions supported the indices, as they are having high cash levels. However, the indices, though recovered most of the losses during the day, finally closed in negative territory with negative breadth, leaving the gaps unfilled. As per provisional data, FIIs were net sellers in cash market and futures market, clearly indicates that our markets might have found a short term top at 19174.45(Sensex) and 5708.35 (nifty) for this month.

 

The long term trend is still intact, in case there is follow up buying which make these tops cleared with volumes, the rally will continue, unabated, otherwise in view of roll over of derivative positions to next month series, shall keep the indices volatile till expiry, in a broad range which was fixed in yesterday trading. Nifty futures closed almost flat to the spot, October series shed 9% open interest, while November series added 26% open interest at discount of 12 points to the spot point to bearishness in short term. Investors should use rallies to book profit, reduce leveraged long positions, and increase cashlevels, as they would see better prices in future to purchase the stocks of blue chips in the days to come.

 

Strategy for the Day: Buy 5000 calls on weakness in the market and 5700 puts on rallies for quick return in day trading.

Outlook for Wednesday " Volatile days a head - SEBI cracks whip on P Notes"

"Our indices have turned quite volatile, after posting new highs, oscillated between negative and positive territory for most part of the session on tuesday, finally closed flat to marginally negative. US markets were down and closed in negative for the second day in this week on crude touching $88 per barrel, and concerns of home finance, and credit related issues.

 

"After the closure of markets, SEBI released a draft paper on "P Notes" which help flows into capital markets in India,  forming  51% of total FII flows, as at the end of 30th sept'2007, total outstanding amount invested under this category stands at whopping Rs.1,10,000 crores shall be the target of this new guidlines that may have to be phased out in the coming 18 months, in case the draft guidelines become regulation in the ensuing SEBI board meeting on 25.10.2007.

 

P notes are issued by FIIs, who raise the money (dollars) which are allowed in India also, where the identity of the investor is unknown to the regulator as of now. This has been a subject of debate among regulators, RBI and Government for the past 3 years, and the flow of 8 Billion dollars entering Indian Capital markets in the last 16 days of this month has raised lot of concern for every one, as this is hot money..(short term money)..can be withdrawn with the same speed too, causing lots of volatility and pain to investors and markets.

 

Currently FIIs are allowed a ceiling of 40% of their investment as P notes, which has to be phased out in the ensuing 18 months, as per the draft guidelines, once they come into force, and New P notes cannot be issued from immediate effect. Ofcourse SEBI invited views and suggestions from all concerned by 20th october, 2007 in view of the urgency to finalise the guidelines and frame work in 25th Board Meeting.

 

All Indian ADRs in US markets were down anywhere between 5 to 10% on knowing this news, our markets will have immediate gap down opening, as per market sources and market grapewine, if to be believed, Nifty will fall 150 points in the opening itself. If there is investor panic, we may see 10% circuit filters on the indices today! We have been advising that one should stay in cash ever since indices closed above 5250 and suggested convert stock in to cash at the rate of 25% for every raise of 100 points on nifty.

 

However, small investors who have missed the rally need not worry and sell the holdings in this situation, and if one is having cash can buy technology stocks, banking and finance and export oriented businesses, in the mayhem, if it happens, for long term holding. This times of corrections provide one time golden opportunity for building long term portfolios. One should not trade in this type of situation, as stopl osses shall be triggered in no time, resulting in certain losses only.

 

Support for the Nifty: 5550 - 5422 -5140 - 5000 & Support for the Sensex: 18800 -18215 -17525 - 17000

Outlook for Tuesday "TCS reveals stellar performance for Q2"

"Making new highs, creating records of sorts on Indian Bourses have become order of the day, with the gush of foreign flows in to blue chips and index heavy weights. Sensex opened with a positive gap and traded firm throughout the day, and due to heavy short covering, closed above 19K, for the first time ever. Nifty's performance was even better, since ONGC started and finished the rally with whopping 242.15 points gain in a single day, which itself is a record. This type of gains are seen month on month basis in the initial stages of bull market during 2003-2004; while every one is surprised of weekly gains of 250 points on nifty till recent times in the last two years, single day gain of 242.15 points suggests that there is unprecedented 'euphoria' amongst foreign investors, who feel that india story is the best in troubled times in US, and strengthening of rupee continuously is encouraging them to take advantage of double whammy of higher returns on investment in markets and also exchange trade off, which is additional bonanza for investing in indian equities...especially growth stories.

 

TCS has posted stellar results, in one of the toughest environment, now has 1,00,000 employees on rolls, and is confident of better performance in the times to come, though they do not give any guidance as policy. The body language of the management sounds confident, and should give give relief to the software sector today, which is beaten after Infosys results were announced on 11.10.2007. However, one has to be stock specific, not to be bullish on the entire sector, as problems of appreciating rupee etc., still continue to daunt the sector. US markets opened weak on 57% drop in profit from Citibank, due to write off of subprime losses during the quarter, and closed negatively. Asian markets opened weak and are trading flat to negative. Nifty Futures have closed with a premium of 18 points on adjustment, shall invite some weakness in the initial hours of trading, however, the trend remains to be up, as long as Nifty trades above 5480 for the day.

 

Strategy for the Day: Buy 5500 calls on weakness and 5700 puts on rallies for quick trading.

Outlook for Monday and Week

"Our markets rallied inspite of negative opening, touching new highs on friday, on the statement made by PM & UPA chairperson Sonia Gandhi that the government will sort out the Indo-US nuke deal irritants with the left parties, and the government will run its full term, and there is no scope for a mid term poll. However, Reliance Industries AGM, where the investors had the high expectations from the management on possible announcement / indication about the Bonus/Stock split were disappointed, thus, it attracted huge selling along with it the other reliance pack also, which were sold off on week end considerations and profit booking. FM statement that he is suprised with the pace of raising of Sensex and some times worried too, also spooked the party, and the indices closed with 2 % losses on friday, though week on week they have posted substantial gains due to the blow-out rally on Tuesday/Wednesday.

 

Tech sector  received selling due to appreciation of rupee, on huge capital flows into equity markets. US markets recovered from the losses of Thursday and posted gains on positive economic data, and also on M&A activity being expected in Technology sector. US futures point to positive as of now, and our markets will open with a gap up and rally on monday, whether they will clear highs made on friday, and rally further to post new highs, depends on the performance of Reliance Industries stock and infrastructure stocks. Volatility will be high during this week as the fight between bulls and bears intensifies, but as of now bulls continue to have upper hand as long as Sept closing of indices Nifty( 5021.35) & Sensex(17291.10) are held. The short term trend becomes negative only if these levels are breached on weekly closing basis.

 

Support for Sensex shall be 18333 and Nifty 53605 for the day.

Outlook for Friday " Infosys delivers what promised - market not amused"

"Our markets awaiting Infosys results, and market men expecting moon from the company, inspite of strong rupee appreciation, when the company delivers splendid performance, and meets guidance, the stock and the sector is beaten down by 7% yesterday. The tech sector performance brought the volatility on the bourses for quite some time, and with the help of infrastructure, Oil and Gas sector, the indices posted new highs, and closed firmly at the higher end of the trading range, due to last hour short covering. Nifty futures closed at whopping premium of 20 points confirms the euphoria among investors adding long positions, throwing the caution to winds.

 

Infosys broke below 2040 which is the trend decider level, and shall be under performer as long as rupee appreciates during this quarter, and since they have a hedge of $1.4billion at Rs.39.50, any strengthening of dollar or weakening of rupee above this level, shall be good news for the company. Long term investors can consider accumulating the stock in small quantities, on every dip, as the long term growth story of the company, sector, and Indian economy continues to be strong.

 

US markets opened strong and closed in the red at the end of the trading, on disappointing data, shall bring in volatility and a gapdown opening for our indices too today, the inflation data to be released at 12 noon holds the key for final closing for the day. However, the indices are likely to close postive for the week, as the rally in past three days gave substantial gains, and profit booking on week end considerations can be common phenomenon.

 

Strategy for the day: Buy Nifty 5300 calls on weakness and 5550 puts on rallies for quick returns in day trading. 

 

Support for Sensex shall be 18200 and Nifty 5300 for the day.

"Outlook for Thursday - Infosys Results and guidance key to Tech sector performance"

"Our markets are in such a strong bull hold that gap up openings and making new highs, creating history on volumes, prices have become order of the day since 18th sept' 2007. The performance of indices is stupendous during this week, though we thought correction might set in since the rally is 7 weeks old. Corrections have become intra day affair, as left out feeling is clearly visible in the buying support that emerges on any slight dip or weakness, intra day. The performance of oil and gas sector, Telecom and Infrastructure are responsible for the strong rally. Banking and Technology sector also joined the party lately. Though the long term trend is very much intact, we are reaching levels of 'irrational exhuberance' as prices of some stocks and sectors start discounting  the future earnings of 2009 and 2010 , while we are yet to know the Q2 performance. Investors need to have patience to wait for corrections and enter on dips in growth stories of blue chip stocks only, to avoid any capital loss in these times of contradicting clues.

 

Dow closed in negative territory, where as Nasdaq (which is tech heavy) made new high and closed in the positive territory. Infosys Q2 results, their guidance and outlook on US economy shall give an indication on the performance of tech sector in general. Rupee at 39.30/$ levels and threatening to touch 37/$ by year end, if the inflow of dollars continue at this pace, puts pressure on rupee earnings. How the company positions to face this situation, which likely to be certain, will decide the performance of the stock from here on.

 

 Infosys technically gave a break out at 2040. Long term investors can buy the stock on dips as it is the leader in sector in   small quantities. 

 

Strategy for the day: Buy Nifty 5250 calls on weakness and 5550 puts on rallies for quick returns in day trading. 

 

Support for Sensex shall be 18000 and Nifty 5250 for the day.

Outlook for Wednesday " Sensex creates History - Old records tumble"

"It was a historic day for indian markets, where indices have posted new highs, posted highest ever single day rally, registering record volumes of trading on our bourses. India's steady economic growth, during uncertain times in US and other parts of world, are making western investors to give higer valuations to our stocks and markets, and re-rating is on cards. From now on the pace of the market will certainly will fast and furious, as many other domestic players too jump the band wagon, making small and midcap stocks to post gains. So long term investors should be very careful in stock and sector selection, and stick to basic principle of investing in business not in the stock, which will go up or down, due to sentiment, liquidity etc.,

US markets also closed at all time highs, overnight after FOMC minutes are released, where expectation of further rate cut is being factored in by players by the year end, making investing in stocks attractive. Domestically both Congress and Left have postponed the evil upto 22nd October 2007, as none of the parties are ready for a snap poll, and both the fighting groups on Indo-US nuke deal issue, do not want to see them being responsible for bringing the collapse of the government, and mid term polls. Igate results will be out today, and the bigbrother Infoys results will be announced tomorrow before market hours, the guidance, outlook on US economy as the management reveals through detail discussion after wards, hold the key for performance of Tech sector in the current bull run.

Strategy for the Day: Buy 5300 straddle on Nifty (Buy Call and Put Option) & a straddle on Infosys too on a strike price 2040 at the end of the session before the event.

Support for Sensex shall be 18000 and Nifty 5260 for the day.

Outlook for Tuesday "Volatile times a head"

"Our markets opened positive taking cues from overseas markets and sensex touched new high (17982.59), and within no time selling commenced, as traders exited from long positions built in the past 15 days, due to the political crisis looming at centre, on account of tough talk by both left parties and congress party which is heading UPA lead coalition government at centre. IAEA chief is visiting India today, and shall meet PM on 11th, is the central point of disagreement between both quarters, as it would tantamount to "operationalising the Indo-Nuke deal", which is the observation by left parties. The much awaited correction has come suddenly and swiftly, as it would be the behaviour of long term bull markets, after having a spectacular rally since 18th sept' 2007. The long term trend is very much intact, and indices have found support at September monthly closings (Sensex 17291.10 & Nifty 5021.35) and closed well above these levels. Nifty futures closed at 7 points discount does not indicate much bearishness.

 

Our markets might trade in a range during this week, and take a cue from Q2 results to be announced by Infosys on 11th. Momentum stocks and small, medium cap stocks are big loosers due to huge unwinding. There may be a bounce today, since markets are down for 3rd day in a row, however, it is not the time to make big purchases. It will be a trading market for at least two weeks, by which time the results are digested by the market and how the Congress - Left imbroglio is sorted out, shall give the direction to the markets.

 

Strategy for the day: Buy 5000 calls on weakness and 5200 puts on rallies for quick returns in day trading.

 

Nifty range for the day: 5000 to 5200 & for Sensex shall be 17100 to 17777

Outlook for Monday and Week "Whether 18K will be conquered?"

"Our indices have closed in negative territory for the second consecutive day, after a dream run, and were volatile during the entire trading session. However, the indices have posted gains 'week on week basis' for the 7th consecutive week, and 8 being fibonacci number, this week shall be volatile and might close negative. Political situation is becoming hot once again and increase in prices of petrol and diesel prices is being contemplated during this week as Indian crude basket crossed US $ 75 already. Q2 results of Infosys will be announced on 11th, which will decide the fate of Technology sector, since it is quite an underperformer in 2007, inspite of indices posting new highs and other sectors posting substantial gains.

 

ECB has left the interest rates unchanged at 4%, and Meryll Lynch declares $5.5 billion losses on account of subprime lending, which shall effect 50 cents of its EPS, number of other financials to declare the position as result season unfolds in US and other parts of the world. Though India is insulated from subprime vows, our domestic political situation, brings in volatility back. Sensex might scale 18K during this week, however, headline supply might halt the rally and markets shall consolidate in a range for at least two weeks from here on, and take the direction depending on the Q2 performance and political situation. Traders and Investors need to be cautious, and book profits at every rise of 100 points on nifty onwards and increase cash levels, for re-entering at lower levels, as and when markets take correction course. Power Grid listed with hepty premium as predicted; traded and closed above 100 giving 100% returns on the investment in a shorter period of less than one month. One can add this stock to the portfolio on dips, it is the leader in market capitalization in the power sector, and a monopoly in the business of power distribution, and infrastructure.

 

Strategy for the Day: Buy 5300 puts on ralllies and 5000 calls on weakness for quick profits and to capture the volatility premiums.

 

Since the indices are in an unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on:

 

Support for Nifty shall be 5100-5000-4940- 4880-4760-4678-4648-4564-4530 and for Sensex shall be17480-17160-16876-16500-16135-15950-15870-15555

Outlook for Friday - Power Grid lists today

"Our indices opened gapdown, taking global cues in their stride, and were volatile during the entire session, finally Nifty closed almost flat, where as Sensex posted minor losses after a dream run for 10 days, registering whopping 2342.61 points raise from 18th sept'2007 onwards unabated. We indicated that the correction is around corner in yesterday's posting and the confirmation of the same shall be known by today's trading, volumes and closing. One needs to be very cautious, in adding stocks at this juncture, as singals of impending correction are visible, the political situation, strengthening of rupee and measures to be initiated by RBI, Infosys results to be released on 11th are some important events / cues to be taken care off.

Though there is a serious requirement for CRR hike for sucking the liquidity in the system, Finance Ministry and RBI chose to raise the MSS limit from Rs.1,50,000 crores to Rs.2,00,000 crores, to face the gushing inflow of US dollars, in to capital markets. Banks are finding quite difficult to increase the credit portfolio, and are seeking reduction in interest rate from RBI, as they cannot reduce the interest rate on deposit rates at the current juncture, when capital markets are so strong, there may be diversion of funds by investors, as returns are instantaneous and quick now a days in capital markets. Inflation data shall be released at 12 noon, and week end profit booking might keep the indices in a trading range for the day.

Nifty Futures closed at a premium of 5 points to the spot yesterday, indicating positive bias, however, initiation of short position around 5250 levels may not be ruled out. Nifty might trade in a range of 5000 to 5265 and consolidate before the next move.

Since the indices are in an unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on:

Support for Nifty shall be 5100-5000-4940- 4880-4760-4678-4648-4564-4530 and for Sensex shall be17480-17160-16876-16500-16135-15950-15870-15555

Outlook for Thursday - "Too much Too fast! - Be Cautious"

Our indices have opened with huge gap up, as predicted and went on to post record gains in minutes, due to all round enthusiasm, euphoria and exhuberance, from all players, as if the "stocks will not be available from next moment onwards". Post sunoutage trading due to weakness in Hangseng indices, and US futures indicating negative trend, profit booking set in which brought running correction, and at one time it was threatening that the indices might close negative for the day. However, inflow of dollars from possibly new FIIs, the indices received support at 5 DSMA and the short covering in the last hour of trading, helped indices to post substantial gains at the end of the trading. Before Fed meet on 18th Sept '07 many analysts were doubting whether 5000 on nifty and 17000 on Sensex would be reached by December end; now we find that these levels are not only surpassed with great ease, and are offering support in case of dips on profit booking. Nifty futures closed at 5 points discount to spot on adjustment basis at the end of the session.

 

US markets opened weak and traded in negative territory overnight and closed negatively. Asian markets have opened negative and this might induce our markets to open negatively too, However, Volatility shall be very high, so one can start selling 25% of the portfolio on every rise of 100 points on Nifty from now on, increase cash levels, as the rally has completed 11 sessions, unabated, setting up of correction is overdue either from today or tomorrow is inevitable. So adding fresh long positions at these highlevels should be avoided. Trading in this high volatile markets, can hurt badly, as the stoplosses gets triggered, much quickly to the disadvantage of players.

 

"Power Grid Corporation Of India" will be listed on the exchanges today, which is offered at Rs.52/- might open and trade with substantial premium, as the power sector is very hot and leading the bull run for the past one week. Opening might be above Rs.100/- and investors who got allotment can hold the stock, inspite of huge returns it is offering on listing, as all other stocks in the sector, have run up too much too fast already.

 

Strategy for the Day: One can construct Bear spread on Nifty by going long on 5250 put and selling 5050 put in current series, when nifty touches 5250 and trades above it, and hold till the end of series for good returns. It requires a margin of Rs.45000/- approximately.

 

Since the indices are in an unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on:

 

Short term support for Nifty shall be 5050-4940- 4880-4760-4678-4648-4564-4530-4480 and for Sensex shall be17260-17000-16876-16500-16135-15950-15870-15600-15485

 

Outlook for Wednesday

"Our markets were closed on account of "Gandhi Jayanthi" yesterday, while all Asian markets rallied on account of strong close of US markets on monday night. On 01.10.2007, our markets were volatile, made new highs and profit booking at higher level, in view of a holiday on 02.10.2007, came down at the end of the trading, although closed in positive territory, at new high closings. Nifty futures closed almost flat on monday, indicating indecisiveness on the trend.

 

Markets shall open positive today, taking monday strong closing of US markets initially, however, profit booking shall bring volatility in the markets from today onwards. Political crisis in karnataka state, Supreme Court's indiction of CM, Tamilnadu on defying the instructions to call off Bandh on 01.10.2007, Left-UPA co-ordination meeting scheduled for 05th where the issue of US-Nuke deal will occupy the top priority, are again bringing the political situation murky. Automobile companies sales numbers for September are encouraging, Steel prices are increased by manufactures, and cement companies are likely to increase the prices shortly, shall influence the momentum in these sectors.

 

In Our view, markets should consolidate around 5000 level for some time, may be till 11th october, when Infosys results will be announced, and take a direction from there on, depending on the performance, guidance and outlook for the sector. However, any weakness, below 4980 is a good buying opportunity in performing blue chip stocks, with medium term outlook, hence, keeping 10 to 15% cash levels shall provide great opportunity for building valuable portfolio for good returns.

 

Since the indices are in an unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on:

 

Short term support for Nifty shall be 5000-4940- 4880-4760-4678-4648-4564-4530-4480 and for Sensex shall be17160-17000-16876-16500-16135-15950-15870-15600-15485

Outlook for October - Q2 Results hold the key to mood and sentiment

"September month was a historic one for our indices, which have posted substantial gains month on month basis, and people who stuck to basics of sticking to value investing in uncertain times, are substantially rewarded, when the sentiment changed to positive, with markets friendly Fed cut of 50 basis points on 18th. Our indices have posted gains since then, uninterupted till the month end, recording new highs, after breaching old highs, every day, surprising most of the analysts. How the markets perfrom?  from now on is the key question in every person minds since we are already at all time highs!

 

October month has the following key events to influence the markets mood, sentiment and trend; UPA-Left party co-ordination committee meets on 5th, on Indo-Nuke deal pursuation issue; Infosys Technologies comes out with its performance for Q2, Dividend and outlook for the next quarter or may be for full year on 11th; Infosys Management's outlook on the technology sector going forward, in the light of rupee appreciation, probable US Slowdown and how it will or may affect the company and sector in general will be heard, analysed with great detail by all global investors too, as the sector is clear under performer on our bourses, by a great margin, inspite of the overaall indices making substantial gains. FOMC meet on 30th and RBI's Credit policy are the next major events which would influence the performance of rate sensitive sectors like, banking, finance, automobiles and fmcg;

 

Strategy for the Month: One can construct a bull spread by buying 5000 call and selling 5200 calls in current series, to ride the upward movement, with minimum investment of Rs.45,000/- Break even level shall be 5100 as of 29.09.2007 closing prices. Investment will give 10% return on capital employed if the market settles at 5200 or more; maximum loss could be Rs.5000/- which is the net premium paid in case nifty trades and closes below 5000 during the month.

 

Since the indices are in an unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on:

 

Short term support for Nifty shall be 5000-4940- 4880-4760-4678-4648-4564-4530-4480 and for Sensex shall be17160-17000-16876-16500-16135-15950-15870-15600-15485

Outlook for Friday - Nifty breaks 5000

"It is one  of the historic day for our indices, since Nifty crossed and closed above 5000 for the first time ever, simultaneously Sensex closed a 17150, with one of the largest trading volumes on a settlement day. September has been very rewarding for investors, as markets world wide moved very strong and fast after Fed decision to cut rates by 50 basis points on 18th; With settlement being over smoothly, rollovers also healthy, now the expectations on the Q2 performance will be priced in from now on, and markets will reward the performing companies and punish the ones which fail on guidance and also unable to meet expectations. Thus, lot of churning of portfolios to take place, pricing in further rate cuts, econonomic performance, political risk/situation etc., which will provide ample volatility in the days to come. Nifty futures closed at 8 points premium to the spot, presents bullish outlook for the day. Today is the last trading day for the week, month and quarter and how the indices close will present the indication for future trend, in our view it would be "up" only.

 

US markets closed postiive, and Asian markets are trading negative to flat in opening trade, our indices might face resistance today at higher levels, as next week is a truncated one, and profit booking can be expected, bringing 2 to 3% fall indices today or on monday, which should provide good buying opportunity, for long term investors. FIIs have been net buyers in our markets for the past 10 days on margin against DIIs who are net sellers, keeping the upward momentum of the indices so far. The larger traded volumes per day, while indices make new highs daily is welcome feature, the market breadth is generally negative as retail investors are booking profits around 17000 (Sensex) and 5000 (Nifty) is a discomforting feature.

 

No doubt that we are in a long term bull markets, however, even running corrections whenever happen will be sharp, swift and sudden, so entering markets with leveraged funds, should be avoided from here on.

 

Since the indices are in an unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on:

 

 Short term support for Nifty shall be 4940- 4880-4760-4678-4648-4564-4530-4480 and for Sensex shall be 17000-16876-16500-16135-15950-15870-15600-15485

Outlook for Thursday - Sensex Breaches 17K

"Our indices amidst high volatility recorded new highs, on high momentum, inspite of flat to negative performance of asian peers yesterday and in the process Sensex created History by breaching 17000 intra day. Nifty found resistance at 4980 on several attempts and rollover caused last minute sell off, which made indices to close flat to marginally positive. Nifty futures are at hefty premium for Sept (18 points) and October series too have 8 points premium suggests that the rollover is smooth so far and shall be completed with positive bias.

 

US markets closed firm overnight and asian markets to follow suit, should augur well for our markets to open gap up and trade firm in the first session. Post sun outage trading, markets shall be volatile and Nifty shall have its turn to kiss 5000 in the process. The momentum being on its side crossing 5000 and closing above it on a settlement day may also need not be a surprise too, if it happens. One can look at technology sector on weakness in the market, as they will be coming out with the results in October. Further rally in the markets should be with the participation of Tech sector and other rate sensitives, as expectation of rate cut by RBI is too being factored in by market players, during the credit policy to be announced in October, or even before it, to help and sustain economic growth momentum.

 

Strategy for the Day: Buy 4900 calls on weakness and 5000 puts on rallies in September series and book quick profits, as it is the last day of the settlement.

 

Since the indices are in an unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on:

 

 Short term support for Nifty shall be 4880-4760-4678-4648-4564-4530-4480 and for Sensex shall be 16715-16500-16135-15950-15870-15600-15485

Outlook for Wednesday - Settlement jitters

"Our markets are in the strong bull grip and inspite of running correction, continue to make new highs ever since bullish breakout happend on clearing previous highs. Since this is settlement week for september series, volatility increased, as anticipated, the volumes per day are now averaging 1,00,000 crores is an indication of greater participation. The outstanding positions have crossed 1,00,000 crores, is being viewed as a concern, by many analysts. Here one has to remember that number of scrips included in derivatives has increased on one hand and at the same the prices of the stocks having derivatives contracts also gone multifold. Nifty futures have closed at 5 points premium to the spot indicates bullish outlook to continue for some more time.

 

Nifty having run up quite fast and furious is facing resistance around 4950, as we are in settlement week, however, 4880 support is held in volatile trade on tuesday. Thus, Nifty might trade in a range of 4800 to 5000 for some time, consolidate and take a cue from the results which start pouring in from 2nd week of October'2007 onwards. RBI has liberalised the Foreign Exchange outflows norms with immediate effect, yesterday, after market hours. Now, an individual can remit upt 2,00,000 $ every year (an increase of 100% over previous limit); corporates can repay ECB upto $500 million without RBI reference. Mutual Funds can invest upto $5 billion overseas. All these measures will ease the pressure on rupee which is appreciating very fast, breached 40 mark and threating to appreciate further, as overseas flows are on high since the US fed cut its rates on 18.09.2007.

 

Strategy for today and tomorrow: Buy 4800 calls on weakness and 5000 puts on rallies to capture intraday volatility and book profits quickly.

 

Since we are in an unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on:

 

 Short term support for Nifty shall be 4760-4678-4648-4564-4530-4480 and for Sensex shall be 16500-16135-15950-15870-15600-15485

Out look for Monday and Week - Volatility to continue

"All markets world wide have posted substantial gains during last week, on the back of US FED cut of 50 basis points interest rates in FOMC meeting on 18th, our indices, have posted new highs daily from there on after a clear bullish breakout, and closed at all time high close for the week and day on friday. Nifty futures closed at substantial premium due to spot at 15 points in current series and October series have just 5 point discount, shows that lot of short squeeze took place, along with addition of net long positios in next series. Roll overs have begun, and one of the largest outstanding positions roll over to October series, will provide huge volatility this week. The daily turnover on our bourses for the previous 3 trading sessions averages above Rs.90,000 crores, point to greater participation, and adventurous shorts during the day being reversed in the last hour, since the strength in the markets force the day traders to cover.

 

The indices are posting new highs for the past 3 days,  inflation was lowest, and rupee is strong, all point to continuation of interest in our markets by FIIs. The current bull run in 2007 on and off happening, is due to participation of select index heavy weights..viz., Reliance group, Engineering & Construction sector, Banking & Cement sectors. While these stocks are posting new all time highs, Technology sector, is posting new 52 week lows, due appreciation of rupee, and on concerns of possible US recession. FMCG and Automobile sectors which are rate sensitive are also under performers till now. All Technical analysts proved wrong by calling that August lows will be tested sooner than latter after touching previous highs. Further rallies in the markets in our markets might induce the fence sitters, and retail to jump into the fray, due to impatience, and over exuberance can be expected in the days to come. This being the settlement week, volatility shall be high. One need to be suitably  hedged on the market to protect portfolio, due to any reversal of the trend, as markets always react suddenly and sharply in long term bull run.

 

Strategy for the Week: One can go long on 4700 calls on weekness and 4900 puts on rallies in current series, and book profits quickly without waiting till the expiry on 27.09.2007.

 

Since we are in an unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on:

 

 Short term support for Nifty shall be 4678-4648-4564-4530-4480 and for Sensex shall be 16135-15950-15870-15600-15485

Outlook for Friday

"Our markets were volatile , and indices have made new highs, traded range bound, as roll over positions to October series commenced, finally closed positive. Asian markets also are rangebound, and US markets are marginally week, Nifty futures almost on par with spot, as September positions are being rolled over to October Series.

 

By about 12 noon inflation data shall be released, rupee breached 40 mark and traded below it for most part of the day, due huge inflow of dollars, in portfolio funds. Technology sector and export oriented companies shall feel the pinch in this quarter, RBI seems to be supporting 40 mark, to save the exporters. Markets will be volatile as huge positons need to be rolled over to next series. Any correction, will be a running correction in long term bullish trend confirmed on 18th, and the previous highs (Nifty..4647 & Sensex..15869) will be supports to make purchases for good returns in the medium term.

 

Since we are in an unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on:

 

 Short term support for Nifty shall be 4678-4648-4564-4530-4480 and for Sensex shall be 16135-15950-15870-15600-15485

 

Outlook for Thursday - Indices create History

"What a party on dalal street, 18.09.2007 will be remembered for posting highest single day gain on the indices for our markets so far; Our markets opened with huge gap and went on strength to strength due to short squeeze, and buying propelled by FIIs, who have pumped in about 2450 crores of rupees yesterday itself (provisional figures) and indices have cleared previous highs in one go in style, also closed at the upper end of the trading range for the day. This is a clear bullish break out, as the turnover also supports the momentum. Now our markets are in new zone, and every dip is a buying opportunity, for long term investors.

 

US markets closed firm and added gains for the second day, inspite of noices that the economy may be slowing down, which can be known in the weeks to come and on knowing the second quarter performance of financials in October. We are in for volatile times, as FII flows find their way to our markets, in to select blue chips and sectors, and the domestic institutions and retail investors, are sceptical about the political risk impending, petroleum products price hike, and appreciation of rupee are hurting many sectors and companies. As long as indices continue to post new highs, which might continue till the first set of results are out in October, one has to be positive on markets.

 

Since we are in to unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on;

 

Short term support for Nifty shall be 4678-4648-4564-4530-4480 and for Sensex shall be 16135-15950-15870-15600-15485

 

Outlook for Wednesday "Bernarke surprises every analyst"

"Our markets were volatile a head of important FOMC meeting, and around noon, when European markets opened positive, and were trading firm, US futures turned positive, may be smelling the outcome, due to short squeeze our indices closed firm at the upper end of the trading range. Nifty closed firmly above july closing of 4529 for second time during this month, and with US markets rallying on FED cutting interest rate by 50 basis points to 4.75% and also further keeping the discount window at 50 basis points penalty was a clear surprise, and naturally Dow has posted one of its largest gain since 2002. 

 

Nifty futures closed at a premium of 3.60 point in current series, with asian markets rejoicing the passage of an important event, which is equity market friendly, our markets will have gap up opening, and Sensex shall challenge the previous high today is certain. Now our markets shall concentrate on corporate performance, political risk, and expectations on interest scenario, as major banks are already voicing concerns on slowing of credit off take. Though the inflation is coming down regularly the Crude hovering around $81, the sensitive issue of increasing the prices of petroleum products, might come any time, which shall be a dampner for automobile sector and also manufacturing sector.

 

We feel that we are in for long phase of volatile times, may be for few months, which provide opportunity for traders, if they have right strategy. One can go long on 4500 calls of October series and 4650 puts and hold them for 15 days, for reaping in substantial returns.

 

The day's range for Nifty shall be 4530(Support) and 4646 (Resistance); Sensex shall be 15485 (Support) and 15950 (Resistance)

 

"All eyes on FOMC meeting"

"All markets turned volatile and closed marginally negative on monday, which is quite natural a head of an event, which will  decide the course of US markets and indicates the state of US economy." Mr.Bernarke is caught between the devil and the deep sea and has to make a tight rope walk, as cut in interest rates gives phillip to equity markets, at the same time when inflation surges, economy may get affected. There is another nervousness, in the minds of US investors that whether really US economy is on its way to "Recession" which is being often spoken by all time greats like, Mr.Alan Greenspan, Dr.Marc Faber etc.,

 

However, coming to Indian story it is very well intact, which is confirmed by good advance tax numbers revealed so far, RIL and Gujarath Ambuja have paid more than 45% year on year, while banks have mixed performance. This gives the hope that the Index heavy weights RIL and Cement sector performance is in tact, should augur well for our markets and indices. Once the FOMC event is out of the picture, our markets will concentrate on the corporate performance, which will be revealed in few weeks, the only caveat is brewing "political risk". The track record of Left parties, assures us that they will help in the volatility, but do not destabilize the government on their own. None of the parties are ready for a snap poll as on date. But certainly there will be a mid term poll, as it would be difficult for the present government to pull and complete term with both parties taking their stance firm and are very clear on their azenda.

 

Thus, investors and traders should be prepared for a period of volatile times, in the process, making new highs may not confirm the on set of new bull run which we have seen for the past 4 years.

 

Strategy for the day: buy 4400 calls on weakness and 4500 puts on rallies for today and carry the position for tomorrow to reap in substantial profits.

 

The day's range for Nifty shall be 4416(Support) and 4545 (Resistance); Sensex shall be 15155 (Support) and 15777 (Resistance)

Outlook for the Week

"Our indices turned volatile on friday in the afternoon, due to profit booking at higher levels on week end considerations, and also as subprime issues are cropping up in Europe also, due to which FTSE opened down. Inflation data showed lowering to 3.52 (lowest in the last 17 months)however, since the most of the prices are administered, do not reflect the factual position. Though the indices have ended negative for friday, they posted marginal gains on week on week basis 4th week in succession. 5 being fibonacci number, and important events are scheduled during this week..viz., FOMC meeting on 18th, Left parties meeting on 19th, and the new controversy developed on the affidavit filed by the government of India in Supreme Court on "Ram Sethu" shall keep the nervous ness on the street.

Best strategy is to stay away from the markets for this week, as the volatility shall be very high, Nifty is yet to close above July closing which we have been mentioning for quite some time, though sensex is able to manage to close above 15551. Advance tax payments due by 15th september will be known today onwards, and stock specific movement might continue, till the passage of the above events and clarity emerging on interest rates, credit crisis, political risk etc.,

Nifty might trade between 4350 to 4650 in extreme circumstances, and long term investors can buy blue chip stocks on dips below 4400 for substantial returns in the coming three months. One can consider buying 4500 straddle in current series for catching intra day / week volatility and make quick gains.

Outlook for Friday

"Our markets  were volatile and closed in positive territory at the end of the session. One postive feature is nifty also closed above July closing along with Sensex after a long time, ever since the correction began. Huge short covering in Nifty futures brought the discount to just 1.60 points to the spot. US markets closed firm on the expectation that FOMC meet would certainly cut the interest rate in the ensuing meeting, only the difference of opinion on the street is on whether it would be 50 basis points or 25 basis points in this month.

 

Inflation figures to be released at 12 noon today also are being estimated to be lower than last week, thus, our markets shall open firm and trade firm, and they are able to close above july closings today finally, we can presume that the correction is complete at recent lows and indices will march a head from next week to challenge previous highs.

 

One needs to have positive view on our indices, especially as this quarter will be a good one for corporates, and if the same is indicated by higher advance tax payments by 15th sept, the data which will be known by monday, our markets will be out of woods.

 

The day's range for Nifty shall be 4464(Support) and 4575 (Resistance); Sensex shall be 15485 (Support) and 15777 (Resistance)

Reg: Outlook for Thursday

"Our markets opened positive but traded volatile in narrow range and closed in flat to marginally negative territory. Similar pattern is observed in all markets except Nikkie where the political development, brought some selling on uncertainity. As markets do not relish uncertainity from any corner. Nifty is clearly consolidating in a broad range of 4450 to 4550 for the past one week, break out from this range of after the passage of the event, FOMC meeting on 18th sept'07, and outcome, which is being eagerly awaited by all funds and institutions, to take a view on US economy, current financial mess, exchange rate. will decide on the flows to equities and emerging markets like India.

 

Our view is our economy being in strong position, with GDP growth rate above 8% consistently for past 2 years, and with no signs of any unstablility on this front, and our currency (rupee) being free from any hiccups, as REER is adopted by RBI, which encourages investment in our economy.

 

Power Grid Corporation IPO is a good bet for retail investors, looking for long term capital appreciation. One can consider subscribing at cut off price of 52, today is the last date for subscription.

 

The day's range for Nifty shall be 4412(Support) and 4550 (Resistance); Sensex shall be 15155 (Support) and 15777 (Resistance)

Outlook for Wednesday

"Our markets have become volatile once again as anticipated, and closed in negative territory. Interesting feature is inspite of weak global cues buying support is evidenced around 4464 on nifty which was August closing. Sensex is able to manage close around July closing of 15550, which indicates that bulls are having upper hand, and once the FOMC meeting, event is passed without hiccups, our indices shall resume upward journey to post new highs.

 

U.S. markets closed firm overnight, and asian markets are trading in positive territory, which shall strength to bulls to press for purchases, which will give gap up opening, and Nifty once closes above 4530 for this week, the volatility will come down and it shall challenge previous high 4647 in due course.

 

One can go long on November futures of Nifty, which are trading at huge discount, duely hedging the same with sept put options of 4550 and roll over the positions till the 5000 target is achieved, could give substantial returns, instead of day/week trading, where lot of skill is required.

 

One can accumulate UCO bank above 40 for a target of 59, as they are planning FPO shortly.

 

The day's range for Nifty shall be 4400(Support) and 4550 (Resistance); Sensex shall be 15055 (Support) and 15777 (Resistance)

Outlook for Tuesday

"Our markets though opened gap down initially, buying support and short covering at lower levels helped indices to recover the losses by the end of the session, and finally indices have closed flat to marginally negative. Overseas cues are not indicative of any direction, as such our markets also move sideways in and around these levels for some more time, may be till the FOMC meeting scheduled on 18th, and take a direction from there on.

 

Generally, the correction seems to be over, markets once build a strong base between 4400 to 4550 on nifty; the next target on nifty shall be 5000 on crossing 4678, by year end. One can go long on November futures of Nifty, which are trading at huge discount, duely hedging the same with sept put options of 4500 and roll over the positions till the 5000 target is achieved, could give substantial returns, instead of day/week trading, where lot of skill is required.

 

The day's range for Nifty shall be 4400(Support) and 4550 (Resistance); Sensex shall be 15055 (Support) and 15777 (Resistance)

Outlook for Monday and This Week

"Our markets continued upward journey on friday and closed positive week on week, though marginally were negative on the last day of the week, due to profit booking. The upward momentum is facing resistance at July closings as predicted, and due to headline supply, markets turned volatile on friday, inspite of inflation data released was the lowest in the last 16 weeks 3.79%. Once again domestic political situation is heating up with the debate on the Indo-US nuke deal being discussed in both houses of parliament, the opposition being faced by ruling UPA government, from its supporters (Left parties) is likely to send jitters among overseas investors. US markets tanked on friday on the signs of slow growth in GDP or recession, being felt on the lowest employment data, inspite of improvement in manufacturing data released earlier. Number of jobs are being cut where companies are exposed to subprime lending which may add the negative sentiment further. FOMC meeting scheduled for 18th is another important event which will give an indication on how the current crisis will be handled by Fed in the days to come. Gradually risk aversion is creeping into the minds of investors, Technically 13500 on DJI proved to be a stiff resistance.

 

This week is quite crucial for our markets, as there shall be some selling to book profits by corporates for meeting advance tax payment by 15th September. Gap down opening on our indices today is foregone conclusion as Nifty futures discount widened to 32 points from 8 points previous day, indicate build up of short positions. The question is whether the rally was a relief rally and the down ward move continues for retesting recent lows made on 17.08.2007(13779.88(Sensex) & 4002.20(Nifty) or support comes around 50DSMA which stands at 4396.75 (Nifty) &15057.91(Sensex) is to be watched. If these levels are held during the selling / weakness which will be there during the week, our markets would be out of woods and shall continue their upward journy from next week onwards to test all time highs.

 

In the long term view, Indian markets shall perform well however, with volatility, long term investors can accumulate Technology stocks on any weakness, since this quarter shall be better quarter compared to the first quarter. Staying in cash shall provide great opportunities for building good portfolio in the indecisive times.

 

The day's range for Nifty shall be 4400(Support) and 4550 (Resistance); Sensex shall be 15055 (Support) and 15777 (Resistance)

Outlook for Friday

"Markets have opened gap down as expected, on weak global cues, and recovered within minutes as done by asian peers, on emergence of buying at lower levels. Though the indices traded for most part of the day alternatingly in negative and positive territory heavy short covering lead to sensex closing above July closing, though nifty is just shied away from closing above it. Nifty futures discount reducing from 45 points to just 17 points due to addition of some long positions too. Generally it is being believed that some sort of decoupling of asian economies is beginning to happen from US; However, the issue of credit issues and subprime, economic slow down which are main worries being faced by US, shall also affect the Global economy too.

Our markets are showing a divergence, as Sensex with change in composition due to addition of NTPC in its composition is able to move above July closing of 15551 where as nifty is yet to clear 4529 and close above it. Today is the decisive day, being week end where inflation data shall be released at 12 noon, whether followup buying lift the indices firmly above July closing and give a firm closing of the day/week so that the break out can be confirmed for initiating confident long positions on Nifty in this series as the markets would confirm coming out of trading range since the correction began on 25.07.2007. Domestic political situation is once again getting warmed up with NDA insisting on JPC on Indo-US Nuke deal issue, while UPA lead government saying no to it. The discussion is on in Rajya sabha today and it will be on 10th in Lok sabha. We feel volatility shall continue till 18th and there after what FOMC decides to do with interest rates, as the current stability witnessed in US markets is based on expectation of a definite rate cut of 50 basis points now total 100 basis points by year end.

The subprime issue is not resolved completely, and the credit issues are yet to be addressed, the financial companies performance in this quarter and statement of losses they might post on these issues will make markets to adjust to the reality situation by October end, when the performance of all these companies will be known, from the quarterly performance results made public.

Strategy for the day: Buying 4500 straddle on October Series and selling 4300 put and 4700 calls (strangle) will give opportunity to catch the volatility in either direction with minimum investment.

The day's range for Nifty shall be 4420(Support) and 4550 (Resistance); Sensex shall be 15055 (Support) and 15777 (Resistance)

Outlook for Thursday

"Markets have turned volatile on wednesday and finally closed marginally negative on average calculation of indices; There was late sell off on smelling bad news from overseas markets and Nifty futures discount almost touched 60 points in the last minutes of trade, indicating creation of huge short positions. Nifty was unable to clear 4500 firmly though 3 attempts were made in the last 2 days by bulls to keep the momentum. Our view that July closings shall offer stiff resistance is being validated and shall be confirmed today, based on US markets sell off our markets will have gap down opening and how far selling continues, due to distribution and at what level support emerges is a big question.

 

The first support comes at 4390 on Nifty which 50 DSMA and failing which the correction can deepen upto 4100 which is currently 200DSMA. Traders need to be extremely careful, as news is becoming murky once again from overseas and on domestic front too. RBI has come out with new norms on Asset Liability Management for the banks, which shall tighten the money from the system.

 

Strategy for the Day: Sell October 4500 calls on rallies and buy Sept 4400 calls on weakness creating a 'calender spread'

 

The day's range for Nifty shall be 4380(Support) and 4530 (Resistance); Sensex shall be 15055 (Support) and 15599 (Resistance)

Outlook for Wednesday

"Markets opened firm with a positive gap and traded volatile, though in a narrow range and closed positive to flat at the end of the trading, registering 8 sessions of positive closing continuously. Absence of cues from US on account of Labour Day Holiday, and lack of conviction to make follow up buying, and absence of big ticket selling suggesting that markets are in consolidation mood at higher levels, before making the next move up or down.

 

US markets closed firm overnight and our indices are approaching July closing levels which shall offer stiff resistance, and profit booking can be expected today. Nifty futures discount 37 points for the current month, indicates short positions, may be a hedge to protect the portfolios on any sudden fall or reversal trend, by institutions. Resistance and supply zone from trapped investors can be expected in the area of 4530 to 4550 in this up move. One needs to be cautious in taking long positions, if one is a short term player.

 

Buying 4400 calls on weakness and 4500 puts on rallies shall give quick returns for intra day / overnight positional traders.

 

The day's range for Nifty shall be 4380(Support) and 4550 (Resistance); Sensex shall be 15155 (Support) and 15777 (Resistance)

Reg: Outlook for Tuesday

"Markets opened positive and traded in a narrow range and finally closed positive for the day. Indices have posted gains for 7 successive days and 8 being fibonacci number correction can be expected on profit booking. US markets were closed yesterday on account of Labour Holiday, and absence of cues from that end, kept the direction indecisive. Now Both Sensex and Nifty are approaching July closings ..15550.99 & 4528.85 which are stiff resistances, if crossed with volumes and all round participation then our markets shall rally to post new highs quickly. Bullish tone continues since bullish cross over is completed with yesterday's closing (Short term averages over taking Long term averages)

 

Asian markets were weak to flat yesterday, and currently US futures point to marginal negative bias, which might invite profit booking in our markets. However, as intermediate trend and long term trend are up, one can buy on dips in technology sector, which will catch interest of partipation of institutions and retailers as they are under performers so far in 2007.

 

The day's range for Nifty shall be 4380(Support) and 4530 (Resistance); Sensex shall be 15155 (Support) and 15555 (Resistance)

Oulook for September '07

"Our markets have ended on strong positive note, as the political tensions domestically eased somewhat, owing to some understanding reached between ruling UPA and Left parties on Indo-Nuke deal, and also global cues supporting as stability returned to US markets, with the assurances made by Fed Chairman and President Bush last friday. Our markets have closed positive for the week, week on week basis for the second week in succession, and August monthly closing was higher than June closing for the indices, though lower than July closing.

Price wise correction started from the recent tops made in July (on 25.07.2007) seems to be over, as bullish cross over is observed in both indices(short term moving averages slowly overtaking the long term moving averages) but still time wise pain may be still left; thus, leaving the markets in volatile mood for the first fort night of this month. The events scheduled during the month, which might influence market sentiment and movement are: Information on advance tax payments by corporates by 15th Sept'07, FOMC meet on 18th Sept'07 would influence markets in general. In our view, September month might post gains over August closings as the second quarter results would start poring in October'07 from second week onwards.

Technology sector which is quite beaten, and seen major sell off should look up, as rupee started appreciating and generally this quarter is a good quarter. The news that infosys is increasing its billing rates by 3 to 4 % for new clients and 2 to 4% for existing clients should help in margins and bottom line. Thus, TCS, Infosys, Wipro and Satyam can be accumulated on every dip for good gains. Technology sector should take the leader ship from now on if indices have to post new highs, and change the sentiment to positive inviting all round participation.

Strategy for the Month:

Go long on September 4400 Calls and October 4300 puts for good returns.

The month's range for Nifty shall be 4320 (Support) and 4645 (Resistance); Sensex shall be 14500 (Support) and 15950 (Resistance)

Outlook for Friday

"Markets opened with positive gap, based on overseas cues, and traded firm throughout the session, and closed positive on the settlement day, since much roll was completed on wednesday itself. Nifty has closed at 4412.30 and touched intraday 4422.30. Though the indices closed verywell on the average price adjustment which takes place based on the last 15 minutes average traded prices, the last 5 minutes sell off indicates that today also there may be selling to book profits. Nifty last quote was 4389; Further the discount on Nifty September futures to spot closing is whopping 59 points; this points to the roll over of short positions, a head of some important data from US today on economy etc., by FIIs.

 

However, Nifty finally closed above june settlement price of 4282 but below July settlement price of 4619.80. Today being the last day of the  week and month the closing will indicate the completion of correction. There will be volatility today and for two more weeks till 15 Sept (by which date advance tax payment figures will be known) & 18th Sept (FOMC meet to decide on interest rates). RBI report released after trading hours, indicate that the effect of US subprime, though may not be felt in our economy, the volatility in exchange and financial markets and systems in US shall affect our corporate performance and economy too. For the present Indo-US nuke deal issue is kept on hold by forming a committee by UPA and left parties, to ease the threat on the stability of central government. Crude is trding around $74 and inflation data to be released at 12 noon may play on sentiments on weak end considerations.

 

Strategy on Nifty: One can go long on October Futures which trade at 72 points discount, and hedge it by going long on Sept 4400 puts at Rs.170 and sell October 4500 call at Rs.106 shall give substantial returns for medium term investors.

 

The day's range for Nifty shall be 4320(Support) and 4444 (Resistance); Sensex shall be 14725 (Support) and 15293 (Resistance).

Outlook for Thursday

"Our markets opened with a gap following global cues, and found support at 100DSMA immediately, and rallied to fill the gaps same day, defying the mood of all other markets. US markets rallied overnight on the hope that Fed would start cutting rates from 18th sept onwards, and recovered all losses posted on monday. The volatility was at its best yesterday, and shall continue today and tomorrow too, as markets are reacting to positive and negative news/whispers excessively on either side.

 

With our indices firmly closing above June settlement price of 4282, the party might continue on bear squeeze today too, Nifty might attempt 4400 today in the initial hours itself, and nifty is likely to settle above 4318.30 June closing, which augurs well for our markets, confirming the ending of correction.

 

Strategy for the Day:

 

Markets will be highly volatile, as observed and nimble day traders can go long on 4350 calls of Nifty in August Series on weakness and 4400 puts on rallies and book profits, intra day quickly, without waiting for settlement price.

 

The day's range for Nifty shall be 4282(Support) and 4404 (Resistance); Sensex shall be 14725 (Support) and 15293 (Resistance).

Outlook for Wednesday

"Markets were volatile as expected, due to alternate bouts of rollover of short and long positions to the next series. Analysis of Nifty futures data and the discount point out that the relief rally is over; and once again down move is on cards. Surprisingly the discount for August series which are expiring tomorrow also have huge discount of 18 points, with open interest addition point to the negative bias for today and this settlement. September discount is at whopping 45 points and Ocotber 57 points.

 

US markets tanked overnight on various concerns facing their economy, financial system etc., as investors dumped the equities and preferred to stay in cash; Both Dow and Nasdaq are on the verge of re-testing the 200DSMA once again and whether they offer support this time is anybody's guess. Our markets shall have gapdown opening and 4282 is june settlement closing, once breached it can be a field day for bears. Markets will be highly volatile today and tomorrow and day after so one needs to be very cautious, if trading to book profits and exit quickly.

 

The day's range for Nifty shall be 4200(Support) and 4365 (Resistance); Sensex shall be 14425 (Support) and 15080 (Resistance).