MARKET VIEW FOR THE WEEK 5TH SEPTEMBER 2011 TO 9TH SEPTEMBER 2011

INDIAN MARKETS MADE A SMART RECOVERY LAST WEEK FROM 18 MONTHS LOW ON POSITIVE GLOBAL CUES. EVEN THOUGH THE LAST WEEK WAS TRUNCATED, MARKETS RECOVERED MORE THAN 6% DURING THE WEEK OUT PERFORMING THE GLOBAL MARKETS BY A HUGE MARGIN. SENSEX CLOSED AT 16821.46 & NIFTY CLOSED AT 5040.00


INDIAN MARKETS ARE LIKELY TO TRADE IN A RANGE, IN A RECOVERY MODE, IN A VOLATILE GLOBAL MARKETS.NEWS FLOW OF GLOBAL MANUFACTURING SLOW DOWN, IN THE LAST WEEK, MAY LEAD TO FALL IN GLOBAL COMMODITIES AND EQUITIES, WHICH MAY ALSO LEAD TO FALL IN CRUDE OIL PRICES. THIS MAY LEAD TO RE-POSITIONING INDIA TO COUNTER ITS IMMEDIATE PROBLEMS OF HIGH INFLATION & INCREASING INTEREST RATES. ON SUCH MOVES IT IS EXPECTED THAT THERE COULD BE BUYING ON EVERY DIPS CAUSED FROM THE WEAKENING GLOBAL MARKETS. HENCE IN ONE WAY A GLOBAL SELL-OFF MAY BE BENEFICIAL FOR INDIA. IF RBI DOESN'T HIKES INTEREST RATE ON SEPTEMBER 16TH, 2011 POLICY MEET, THERE WILL BE HUGE BUYING AND THAT MAY LIFT MARKETS TO AROUND 5400 LEVELS. ON THE OTHER HAND IF THERE IS RATE HIKE NOW BY RBI ON ITS POLICY MEET, THEN THERE WILL BE SEVERE SELL-OFF LEADING TO MORE PESSIMISM. HENCE ITS VERY CRUCIAL TO WATCH THE NEXT 15 DAYS.


TECHNICALLY NIFTY IS SHOWING WEAKNESS FROM THE MONTH OF JULY WHEN IT WAS NOT ABLE TO CROSS 5750 RESISTANCE LEVEL. AUGUST WITNESSED ONE SIDED SELL-OFF THROUGHOUT THE MONTH, HOWEVER SOME RECOVERY WAS SEEN AT THE END OF THE MONTH AND NIFTY MANAGED TO CLOSE ABOVE 5000 LEVELS. OVERALL TREND REMAINS BEARISH IN NEAR TO MEDIUM TERM. IF NIFTY SUSTAINS ABOVE 5000 LEVEL IN COMING SESSIONS, FURTHER RECOVERY MAY BE SEEN. HOWEVER PROFIT AT HIGHER LEVELS(5150-5250) IS MUCH LIKELY. HENCE PROFIT BOOKING AT THE HIGHER LEVELS IS CERTAINLY SUGGESTED.


FOR THE MONTH OF SEPTEMBER TREND DECIDING LEVEL IS 5000. IF NIFTY FAILS TO SUSTAIN ABOVE 5000 THEN 5135,5200,5350 & 5450 IS LIKELY. ON THE OTHER SIDE IF NIFTY FAILS TO SUSTAIN ABOVE 5000 THEN 4930,4720,4580 & 4425 COULD BE TESTED.


FOR THIS WEEK: SUPPORT IN NIFTY LIES AT 4940 & THE RESISTANCE AT 5080. IF NIFTY BREAKS 4940, IT MAY GO DOWN TO 4870 & THEN TO 4800. HOWEVER IF NIFTY SUSTAINS ABOVE 5080, THEN THE LEVEL OF 5150 & 5230 COULD BE TESTED.


STRATEGY FOR THE WEEK: BEST STRATEGY FOR THE WEEK SHALL BE TO PLAY IN NIFTY OPTIONS, BOTH CALL & PUT.


HOW????


DONT TRADE IN THE RANGE 4940-5080. YOU MAY LOOSE MONEY IN THIS RANGE AS THE MARKET WILL BE HIGHLY VOLATILE IN THIS RANGE. WHEN MARKET WILL BREAK THIS RANGE AND START TRADING OUT OF THIS RANGE THEN TAKE THE POSITION.
BUY CE5000 & CE5100, IF NIFTY STARTS TRADING ABOVE 5080 FOR BOOKING PROFITS AT HIGHER LEVELS 5150-5250.
BUY PE5000 & PE4900 IF NIFTY STARTS TRADING BELOW 4940 FOR BOOKING PROFITS AT LOWER LEVELS 4850-4750.


NO STOCKS ARE SUGGESTED BY ANALYSTS TO BUY AT THESE LEVELS.

Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.Nothing in this article is, or should be construed as, investment advice.

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