WEEKLY REPORT ON NIFTY BY kadiyali - 01.08.09 (Saturday)

WEEK GONE BY

Nifty continued its uptrend for the third week after its big fall in the post budget week, and closed the week near high at 4636, up 68 points. Trading range for the week was 4420 to 4669. The high of the week 4669 was touched on Friday and the low of the week 4420 was recorded on Wednesday.

WEEK AHEAD

Having secured a positive close for Nifty for the last 3 weeks, bulls will continue to dominate the market,  and Nifty will be able to post gains for at least 3 of the 5 trading days of next week. Nifty will close the next week also in positive but with minor gains. Trading range for the week is likely  to be 4580-4810.

STRATEGY FOR THE WEEK

1. If you are long, continue to ride on your longs but do note to book profits once nifty goes past 4800. 

2. If you are short, next week will give you very anxious moments, and you may not be able to get a decent exit for the whole of the week, as nifty is unlikely to trade below 4580.

3. Accumulate nifty puts 4400PE once nifty goes past 4800.

STOCK RECOMMENDATIONS

Nifty is likely to touch a high of 4810 for the next week, and also to reach a target of 4900 anytime thereafter. However as the quarterly results season is almost over & there is no other positive trigger for the market in next 2 months, the days of bulls may be numbered very shortly. It will be prudent to book profits in whatever shares we hold now, and wait for a deep correction to 4300-3900.

OPTION RECOMMENDATIONS

Watch the premium of nifty call 4900CE (CMP 77) & nifty put 4500PE (CMP 109).

BUY 4900CE below 65 for a target of 135. Upon achieving the target, SELL and take out your money, invest the profits in 4500PE at the rate prevailing at that time, which is likely to be equal to the profits gained from 4900CE trade. Keep the 4500PE so bought for a target of 150.

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