The Indian markets were volatile and closed with a cut of 0.6 %. The markets went down against our call of an up move. It went down to 5202 and pulled back to close at 5278. The markets seem to be taking in the cues from the uncertainty in the global markets is playing up all over. The Greece drama should close by today and the next episode of it will continue to keep the markets on the edge. Then the other nations like Portugal, Ireland & Spain will come into focus. The Greek people have taken to the street to the deal as the government needs to take austerity measures and reduce the deficit drastically to stay afloat. The US too has started to take baby steps on pulling back on the free $2 trillion floating in the economy. This is the first step fed is taking, which is in the right direction. This will set the road map to increase interest rates, which may affect consumption and keep inflation in check. The biggest fear all economies have is runaway inflation. The world’s smartest investor Warren Buffet in his latest shareholder meeting said his fears are also inflation and the eroding value of currencies. Last week also saw Gold seeing new highs of $ 1180 an ounce. The Goldman Sachs woes continue with a criminal charge filed against them, this triggered a 1.5 % fall in S&P on Friday. The Indian markets also focused on the budget cut motion getting defeated and passage of the budget, the 3G auction is going as per plan and is expected to net the government Rs 45000 Crs. Am not sure if the economics will work out for the telco’s. This will put pressure on Bharti, Rcom, Tata & Vodafone. It is already slated to be the ‘Winners curse’.
This week the Indian markets will be looking westwards for cues and also the April no’s, the Auto no’s have come better than expected. The volumes in the markets are slipping and with free cash strings getting arrested, the FII’s support may start dwindling sooner. We have the classic ‘Sell in May and run away’ staring at us. Markets are over brought and the expectations are running high. So we may have seen the Top for 2010 on Nifty @ 5400 levels. So get ready for some descent correction, so investors can enter into the markets.
The derivatives position for the week stands at Rs 103000 Crs in OI; the PCR is at 1.15 the option IVs for Calls at 17 % & Puts at 20 %. The derivative position gives a feel of uncertainty, expect volatility, and trade light.
Nifty on 30th April: 5278
For the week: Sell Nifty around 5280 for a target of 5160 (SL 5340)
Stock trading Ideas: Sell HDFC @ Rs 2850 levels for a Target of Rs 2650 or lower SL: 2880 (In 2 weeks)