markettrend766
20-10-2008, 05:37 AM
Volumes plummeted in the derivatives segment reflecting the extreme volatility and bearish sentiment. Many market players were seen cutting positions ahead of a margin hike from the next week onwards.
After trading at a premium for a better part of the week, Nifty October futures ended the week at a discount to spot Nifty indicating punters willingness to keep open short positions.
However, Nifty November futures were seen trading at premium to spot Nifty. If Nifty trades above 3,100 steadily, buy 3,100 strike and 3,200 strike call options for short covering gains. Below technical level of 3,100, Nifty may dip to 2,940 before staging any recovery. Markets are in extremely oversold territory; avoid fresh shorts at current levels.
A close watch of fall in sectoral indices shows that realty, metal, capital goods and power have fallen most; and FMCG the least. Six stocks (RIL, ICICI, L&T, R Comm., Tata Steel and HDFC) have contributed 50 per cent fall in the Sensex from 21,200 to 10,000. Despite weakness in rupee, the sharp fall in crude oil prices and likely issue of oil bonds in near term to benefit significantly OMCs like IOC, BPCL and HPCL. Stay invested and add on declines. Expectations over release of fertiliser subsidy in the current parliament session are high. Buy on declines fertiliser stocks. Select counters like power finance, telecom, bank and realty stocks may stage a mild comeback rally in the week ahead.
Use short covering rallies to exit from weak sectors and weak counters. While predicting the bottom is extremely difficult and not feasible, long-term investors should concentrate on sound companies that are available at "discount sale" prices.
After trading at a premium for a better part of the week, Nifty October futures ended the week at a discount to spot Nifty indicating punters willingness to keep open short positions.
However, Nifty November futures were seen trading at premium to spot Nifty. If Nifty trades above 3,100 steadily, buy 3,100 strike and 3,200 strike call options for short covering gains. Below technical level of 3,100, Nifty may dip to 2,940 before staging any recovery. Markets are in extremely oversold territory; avoid fresh shorts at current levels.
A close watch of fall in sectoral indices shows that realty, metal, capital goods and power have fallen most; and FMCG the least. Six stocks (RIL, ICICI, L&T, R Comm., Tata Steel and HDFC) have contributed 50 per cent fall in the Sensex from 21,200 to 10,000. Despite weakness in rupee, the sharp fall in crude oil prices and likely issue of oil bonds in near term to benefit significantly OMCs like IOC, BPCL and HPCL. Stay invested and add on declines. Expectations over release of fertiliser subsidy in the current parliament session are high. Buy on declines fertiliser stocks. Select counters like power finance, telecom, bank and realty stocks may stage a mild comeback rally in the week ahead.
Use short covering rallies to exit from weak sectors and weak counters. While predicting the bottom is extremely difficult and not feasible, long-term investors should concentrate on sound companies that are available at "discount sale" prices.