Morning update on 06 aug 09

Last night dow recovered from a loss of 112 point to finally close just 39 points down.in fact it had recovered the entire loss but profit booking during closing minutes brought it down by end. More important s&p500 which had slipped below the 1000 mark recovered to close at 1002.brazil closed .6% up. European markets which had closed earlier when dow was trading badly down, closed nearly 1% down but uk ftse sensing dow recovery closed only .5% down. Asian markets have opened flat to mixed with a negative bias and may remain mixed with a period of weakness around the time of indian opening.

For indian markets, as the fear of weak world markets have receded to some extent, expect a flat to mildly weaker opening. Nifty may try to save the critical support at 4669levels initially if asian markets recover & show strength. However during intraday corrections if the short term support line around 4670 is breached, it may bring temporary weakness to nifty for a fall towards 4650 followed by wednesdays lows around 4630 to 4625 levels for another likely bounce up from here. On the higher side critical level around 4717 will continue to pose as a formidable resistance a decisive breach of which may only take nifty towards 4747 levels.

For intraday trading on thursday,option traders may continue to hold their calls as well as puts hoping for a decisive break out of 4717 zone or a decisive fall below 4616 or 4600 levels. They may reduce half the bought calls if nifty moves towards 4747 or 4750 levels (one can only hope that nifty reaches these levels) & add 4500 puts here or short 5000 calls by holding on to lower calls. If nifty moves down towards or below 4650 to slip towards wednesdays lows of 4630 or 4620, they should book profit on puts or hold puts and short 4400 puts and buy back 4800 calls. In this volatile markets, cyclic intraday trading as per up & down movements of of nifty brings good gains by end of the day. Inflation announcement around 12.30 pm may either be completely ignored or may have a 5 second blip.