"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
3 comments:
Hi Sir,
I am intrested in a particular scrip which is nagarjuna fert's. Its at 53/- as of today. will it make sense for me to invest in it to make quick profit?
Please advise.
Thanks,
Venu
Dear Venu,
Nagarjuna Fertilizer has given a bullish break, out above 42 and is making new high with lot of momentum. Technically u can invest in the stock with a stoploss at 42, which is quite far away and run the momentum, if you are a day trader or punter.
Fundamentally, the stock is overvalued, vis-a-vis, its performance, however, market is speculating on the valuation of excess land the company owns, whose value is not brought into the books as of date. There are so many stories going around, that KG Basin gas find is advantageous for the company, and Reliance Industries looking at into entering Fertilizer sector may be interested in the company, and so on.
My advise is to pick up the stock as long term investment, whenever it corrects or market corrects, and hold for 3 to 4 years to get substantial returns.
V.Ramakrishna Rao
Thanks for the insight sir.
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