WEEKLY REPORT ON NIFTY BY kadiyali - 15.08.09 (Saturday)

WEEK GONE BY

After a break in weekly positive closes last week, Nifty this week again managed to post a positive close, ending the week at 4580 against its previous week's close of 4481, up 99 points. After a gap up opening above 4500 level on Monday, Nifty failed to sustain the positive gap, came down upto an intraday low of 4359 on Wednesday, but recovered smartly upto a high of 4619 on Friday, before closing at 4580. August month support of 4400 & resistance of 4700 were not  violated on closing basis during the week.

WEEK AHEAD

Aided by a better than expected IIP numbers, Nifty recovered smartly this week from its weekly low of 4359. The uptrend is likely to continue, and nifty will post another positive weekly close next week. The trading range for the week is likely to be 4480-4760.

STRATEGY FOR THE WEEK

A major portion of the retail investors have been made to believe nifty will correct below 4200 this expiry, and as on date the factors favouring this pessimistic view are deficient monsoon & bubble in Chinese market. Against this, a fresh view is slowly gaining ground that 4400 will be the support for nifty, and aided by many positive factors, nifty can scale new high above its intraday high of 4731 recorded on 4th of this month. The positive factors favouring this optimistic view are many like better than expected IIP number, better than expected Q1 results just declared by frontline companies, favourable inflation data, surplus liquidity in the banking system, southward interest rates though gradually & favourable global GDP numbers,  possibility of funds withdrawn from Chinese market moving to Indian market, and refund from just concluded large IPOs adding liquidity to secondary market.  And on top of these, if monsoon progresses next week, the market will see all of a  sudden disappearance of the negative factors. All these factors point to a nifty target of 5000 by 15th September.

Keeping the above in mind, stay invested in cash shares, keep sufficient liquidity to add longs at dips, and get out of short positions on dips. Any intraday level below 4540 is a good dip to go long, and any level below 4500 is a golden dip to go long for this week. 

STOCK RECOMMENDATION

BUY Tata Teleservices (cmp 33) for a target of 50 by 15.09.09.

OPTION RECOMMENDATION

Watch the premium of nifty call 4500CE (cmp 147) & BUY 2 lots if it falls below 90 for a Target of 140. On achieving the target, SELL one lot, reduce the cost of the balance lot, and hold it till expiry.

ANNOUNCEMENT

Kadiyali Optins Blog is now READY.  The first batch of 50 members will be sent invitation to access the blog by 9PM on 16.08.09, and the next batch of 25 members will be sent the invitation by 9PM on 17.08.09.