"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).
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