This week the Indian markets moved up by 0.4 % after hitting the downside target levels as discussed. The US & other developed markets rallied by 4 % due to oversold market conditions and all the central bankers coming together to help support the Europe debt issue. The Greece issue is for the moment is off the table, but will surely come to haunt sooner. The RBI in India decided to up interest rates by 0.25 % to control inflation, also the petrol prices have been increased by Rs 3/ a liter. The inflation up move does not seem to stop or measures taken to control having any effect on the economy. The only silver line has been the government moves to clear a lot of projects and also open up borrowing from china. This will auger well for the infrastructure companies who have been facing credit crunch lately.
This week the Indian markets may see an up move given the oversold conditions. The US Fed is meeting on 20th & 21st and expectations are running high for a QE 3, they seem to be running out of ideas to manage the slowing economy and the runaway debt. The one being speculated is converting the short term debt to long term debt; this is only a way to postpone the problem and inflating the bubble still more. The Indian markets do not have any major cues to look forward.
The derivatives position for the week stands at Rs 138876 Crs in OI; the PCR is at 1.51 the option IVs for Calls at 23 % & Puts at 29 %. The Nifty Future is trading at a 4 point premium to spot. The derivative position too suggests an upward move.
Nifty on 16th September: 5084
Nifty trading ideas for the week: Buy Nifty around 5060 - 80 levels for a Target of 5200 SL: 5040
Stock ideas for the Week: Buy L&T around Rs 1600 for a Target of Rs 1670 SL: 1575