"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)
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