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)