Last week the Indian markets moved up by 3 % on the back of the RBI policy which reduced CRR by 50 basis points. We also had the derivative settlement with short positions being squared off, leading to a move up. The FII's have invested $ 2 Billion in January, this is on the back of weakening $. The India Rupee has strengthened by 10 % in the last month. The result season had low expectations, so any small surprise is being lapped up. The Indian market is up 14 % from December lows. The global headlines still talk about the EU coming out of the crisis, as of now the cheap loan to the banks is doing the trick. The balance sheet sizes are expanding in EU & the US with the free money model. The US Fed has come out with a statement last week on keeping interest rates low till 2014 and also pegged inflation at 2 %. With so much of free money all over the globe, not sure how the Fed plans to manage this.
This week the Indian markets have the result season continuation & January Auto & Cement sales reports coming in. The Greece debt settlement is closely watched to see what the hair cut & coupon rates will be. The EU ministers meet on Monday to take stock of their economy and actions. We already have talks of Portugal going the Greece way. The Economic entertainment keeps the global investors & traders on the edge. The global markets are looking a bit exhausted and we can expect sideways moves with a negative bias going forward.
The derivatives position for the week stands at Rs 98465 Crs in OI; the PCR is at 1.23 the option IVs for Calls at 19 % & Puts at 21 %. The Nifty Future is trading at a 8 point Premium to spot. The Technical & Derivative positions seem to suggest a sideways move.
Nifty on 27th Jan 2012: 5204
Nifty trading ideas for the week: Sideways moves - Sell < 5120 for a Target of 5000
Stock ideas for the Week: Sell DLF around Rs 213 for a Target of Rs 200 SL : Rs 220