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.