WEEKLY REPORT ON NIFTY BY kadiyali - 11.07.09 (Saturday)

WEEK GONE BY

Nifty opened the trade into this week with Union Budget being presented on 6th Monday, went upto a high of  4479 in intraday prebudget trades, and as the Budget presentation started, began sliding down, down & down, recorded a low of 4133 on that day, before closing at 4166, down 258 points, being the biggest single day fall of the year. After a highly volatile week of trading, Nifty closed the week at 4004, down 420 points, its biggest weekly fall of the year. The high for the week was 4479 and the low for the week was 3976.

In this regard, I reproduce herebelow 2 messages I posted in Money Control Board (MMB) on 6th Monday:

1. 06.07.09, 10.30AM...Nifty futures opened today just flat at 4427 against its previous close of 4424, and is currently trading at 4446.  It has so far recorded a HIGH of 4462, and a LOW of 4427. Asian cues are negative, US futures too are in red, and there is a strong possibility of European Markets opening in negative today. Locally, we have Union Budget being presented today, which the market has been expecting to be negative for the market.  Only an out of the box surprise budget can save nifty today. If the budget turns out to be a non-starrer, nifty will fall very badly today..........

2. 06.07.09, 2.14PM...NF after touching a high of 4482 just before the start of the Budget speech, started sliding down, down & down, and has so far touched a low of 4176.  The budget was an ordinary budget, not great but not bad too, but definitely is a non-starrer.  And nifty tanked very badly as indicated in my 10.30AM report. Nifty is likely to fall below 4000 within the next 2-3 days.

WEEK AHEAD

Nifty had got into a panic mode just half an hour before the close on Friday. It was almost end of the session, and end of the week too. Panic square off of the longs brought nifty below 4000, and it did not find support till 3976, and the last minute short covering enabled it to close the week above 4000. Now the next week, we are going into a period of Q1 results of many top ranking companies. Infosys better than expected results will definitely give hope to traders/investors of a better than expected results of other corporates. The IPP data released on Friday shows pick up in industrial production. Monsoon though delayed, has started normal rains in most part of the country. 

Keeping in veiw the above, Nifty is likely to trade in a range of 3950-4300 for the next week, and close the week in positive. 

STRATEGY

1. If you are long, hold on to your longs, booking loss at this juncture will result in square off at the lower end of the nifty range for the week.

2. If you are short, close the shorts as Monday morning trades will give you the best level for short covering.

3. Get out of your longs when nifty touches any where near 4300.

STOCK RECOMMENDATIONS.

BUY THE FOLLOWING SHARES: ABAN (668), SATYAM (73), ATLANTA (70), SUZLON (82), PROVOGUE ( 40), 3I INFOTECH (63).

OPTION RECOMMENDATIONS. 

Only if you are holding profits booked out of NF trading calls , I recommend to buy  NIFTY Call 4200CE below 40.