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India week ahead - 20th - 26th dec 2010

|Includes: EEM, India Fund (IFN)
The Indian markets were up 1.8 % during the week with rounds of Volatility as expected. The Volume is getting thinner by the day due to the holiday season. The markets may move in a sideways mode with stock specific action. The Advance Tax nos. looked healthy for Q3, the nos. coming at 15 % above last year. So we can expect the results to be in line with expectations and valuations. Markets globally are on an uptrend due the loose money policy in the developed economies. The emerging markets have been underperforming the developed markets in the last 2 months; the investors seem to be cautious on the emerging market returns going forward. The valuations seem to be stretched a bit in most markets. The food inflation came in at 9.5 % which is ahead of expectations. The RBI policy left the rates unchanged, also pushing up liquidity to tide over the crisis in the money market.
This week the Indian markets may turn sideways with a positive bias, no major news in the horizon also the holiday season globally starts. We can expect a Santa rally to close the year on a high.
The derivatives position for the week stands at ` 151300 Crs in OI; the PCR is at 1.26 the option IVs for Calls at 16 % & Puts at 19 %. The Nifty Future is at a Premium of 12 Points.
Nifty on 16th Dec: 5948
Nifty trading ideas for the week: Buy Nifty around 5950 for a target of 6080
Stock ideas for the Week: Buy Balrampur Chini > Rs 80 for a Target of Rs 92
Happy Trading!
Happy holidays, will not have the blog next week.
Cheers.