India week ahead - 18th - 24th April 2011

This week the market was down 0.3 %, there was volatile movements and closed down in a a holiday shortened week. The bell weather of IT announced results and tanked 9.5 % on Friday, driven by lesser than expected guidance. The Indian IT has to reinvent the IT business back again with non-linear moves and investment in products. The favorite old saying ‘what got you here, does not guarantee you success in future’ holds good in the IT industry’s case too. The BRIC nations recently came up with a strong move to trade locally in their own currencies, this may be the start of the erosion of $ going forward. The BRIC nations contribute to 20 % of the global trade and are poised to move up. The developing world needs to manage their debt better to stay afloat. The inflection point for most economies to collapse is not far away. The inflation seems to be slowly raising its head across the developed economies and will put pressure on the consumers who are struggling to manage homes.

This week the Indian markets will keep a close eye on the results of TCS, HCL & HDFC bank to get a cue. The TCS results will be closely watched to see if they too are afflicted with a slow growth. In the US last week the Alcoa, Google & JPM’s results came in to expectations but the markets gave a thumbs down. So ‘SELL’ the news, is what the favored option by traders. There is a lot of indecision in the markets and traders are a confused lot. We are also approaching the ‘Sell in May and run away’ time. So be cautious on the market moves and be nimble.

The derivatives position for the week stands at Rs 140260 Crs in OI; the PCR is at 1.36 the option IVs for Calls at 22 % & Puts at 23 %. The Nifty Future is trading at flat to spot. There is confusion and indecision amongst traders.

Nifty on 15th April: 5825

Nifty trading ideas for the week: Trade with levels, Sell < 5840 for a target of 5650

Stock ideas for the Week: Sell HDFC Bank @ Rs 2400 for a Target of 2275, SL: Rs 2440