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India Week Ahead - 16th - 22nd April 2012

|Includes: EEM, EPI, India Fund (IFN)

Last week the Indian markets moved down 2.2%, the markets had the IIP data coming in lower than expected and also had the result season kicking off with Infosys results which was way below market expectation and tanked 13 %. The EU economic issue comes to haunt the market from time to time, now it's the Spain's turn. One by one the red alerts are being sounded. In India there is a bail out of a different kind, the government has decided to bail out Air India with a Rs 30000 Crore life line, not sure why the government has to get into business and use tax payers money to b ail out in efficient corporate houses. Does the government have its priorities right? On the global front, Alcoa, JPM and Google announced results that were better than expected; markets did not react in a big way. Looks like the results are fully priced in the market and any - ve surprises will be brutally punished and meeting market expectation may at best keep the valuations at the same level.

This week the India market will start the week with inflation data coming in on Monday followed by the RBI policy statement on 17th April. The result season will see Reliance, ACC, IFCI etc announcing results. This week markets are at the support level at 5180 - 5200, so a break of this level on the downside will have some deep cuts. In case it takes support, a retest of 5300 - 20 cannot be ruled out.

The derivatives position for the week stands at Rs 106128 Crs in OI; the PCR is at 1.17 the option IVs for Calls at 20 % & Puts at 23%. The Nifty Future is trading at 10 point Premium to spot. The Technical & Derivative positions seem to suggest a move of indecision.

Nifty on 13th Apr: 5207

Nifty trading ideas for the week: Sell Nifty on a break of 5180 for a Target of 5080. SL: 5220

Stock ideas for the Week: Sell L&T < Rs 1300 levels Target: Rs 1200 SL : 1326

Trade safe