This week the Indian markets moved up 5 %, on good global cues and an oversold market condition. We had expected a correction that did not come in, may happen next week. The European issue is on top of mind and with the Dexia bank being bailed out by the Belgian government; the expectations are running high that all banks will be re capitalized. The G20 finance ministers are meeting this weekend and nothing much will come out of this. The inflations number for September came in at 9.72 % a tad lower than he earlier month. The RBI will continue the tightening process in the Oct 25th meeting. What is interesting is the Loan growth continues to be at 205 despite the rates moving up. The result season has been kicked off with Infosys with good numbers coming out, the investors gave thumbs up and the stock moved up by 7 % this week. The Reliance results too was to market expectations, but was supported by other income. The refining margins took a beating though.
This week the Indian markets will continue to look at the results season and global cues, the markets closed strong for the week. We must watch for profit booking in a short term over brought markets. We are getting into the Diwali season, which traditionally has been positive. In the US there are 100 Co’s announcing results this week, so markets may be discounting this and S&P is at the resistance of 1220 – 1225 levels, watch this levels closely for global direction.
The derivatives position for the week stands at Rs 126463 Crs in OI; the PCR is at 1.56 the option IVs for Calls at 22 % & Puts at 27 %. The Nifty Future is trading at a 10 point premium to spot. The derivative position suggests we may see some profit booking.
Nifty on 14th October: 5131
Nifty trading ideas for the week: Will be in a range of 5000 – 5200, Sell around the top of the range with a tight SL around 5225
Stock ideas for the Week: Sell Reliance 865 for a Target of Rs 825 SL: 872
Happy & safe trading