"Our markets have reached all time highs, witnessed circuit filters on down side, and extremely volatile during the past week, as predicted, and finally closed negative on thursday & friday, inspite of sterling results from TCS, WIPRO and RELIANCE. The weekly closing was negative with large negative breadth, after a continuous positive closings for 8 successive weeks in a row. Nifty futures closed at a discount of 22 points to the spot on friday, suggests further weekness, as the cues from US markets and other asian peers are also supporting the view.
This is a week where October series shall be settled on 25.10.2007, and roll overs to next series are already on. Lots of news flow is expected from today which influences the market movement, rather than the fundamentals till 02.11.2007. SEBI holds an conference call with FIIs on eliciting their views on "P-Notes" today, UPA-Left co-ordination committee meets today to decide the stand on US-Nuke deal, where once again Left parties want to ascertain their stand that it should be put on hold, till all their concerns are addressed to their satisfaction. SEBI Board meets on 25.10.2007. to finalise the draft guidelines on treatment of P Notes. All this shall bring in huge volatility in markets where indices might trade in very large band, which is not seen in the bull rally so far. It is difficult time for even professional traders to trade with stoplosses, as VAR margin requirements will be very large, and hence, value picking should be the strategy, if one has increased cash levels, as we have suggested ever since nifty crossed 5500.
Indices have made a short top at 19198.66 (Sensex) & 5736.80 (Nifty) on 18.10.2007 though price wise correction of 10% on indices has happened on 17.10.2007, time wise correction is still due, may take time upto 02.11.2007, by which time, all issues will be sorted out, including the FOMC meet and RBI credit policy will throw light on interest rate scenario for the year.
Indices have closed below 20DSMA (Sensex...17822.29 & Nifty...5230.82) on friday, is a sign of weakness, and any rallies will face resistance at 5DSMA levels (Sensex..18476.80 & Nifty...5492.81), However, long term trend is intact.
Support for Sensex shall be at 16900 & Nifty at 4940 for the day.
No comments:
Post a Comment