Last week the Indian markets moved up by 3.8 % on the back of nonstop FII buying and global cues. The Indian market has moved up by a whopping 7.7 % in January till date marking the highest increase in a decade. Is this a technical up move from an oversold condition? I would think so! The European markets are staring at a recession and free money is being pushed into the markets. This high liquidity driven moves can hurt fiscal discipline and can have very bad long term effect across the globe. The US dollar has been strengthening and last week came down by 2 %. The Euro bond auction has been well accepted and the Spanish & Italy bong yields have been falling. The Indian result season has kicked off to expectations. The volumes in the markets have been tepid. The Indian market is running up on expectation of rate cuts from the RBI.
This week the Indian markets has many events to digest, the RBI policy on 24th, the derivative settlement on 25th, the US Fed meeting on 25th and the results season. The week can be volatile and a move up is expected. The Rally may be in the last legs, so be careful with the moves.
The derivatives position for the week stands at Rs 139232 Crs in OI; the PCR is at 1.60 the option IVs for Calls at 19 % & Puts at 21 %. The Nifty Future is trading at a 8 point Premium to spot. The Technical & Derivative positions seem to suggest a move up till settlement.
Nifty on 21st Jan 2012: 5048
Nifty trading ideas for the week: Volatility expected - Avoid Trading
Stock ideas for the Week: Volatility expected