Morning update on 10 aug 09

US markets were highly bullish on friday. Dow was 113 points up after correcting from a 175 up during the day. S&p500 regained its supremacy above the 1000 mark & nasdaq also closed above 2000 mark. Brazil was up by more than 1%.european markets were up by 1% to 1.5% with uk ftse being subdued with only a .8% rise. Asian markets have opened strongly & may continue to maintain strength. However some indices of korea, china & taiwan may find pressure in moving up faster.

For indian markets, having fallen so much during the last 2 days when most of the other world markets were rising, one can expect a strong gap up opening around the or higher than initial critical level of 4515. Short covering from here on can take nifty towards the next resistance of 4558 or even 4580 levels where selling pressure is likely to mount. However moving up & sustaining above 4606 can see the emergence of bulls & further short covering by bears .

For intraday trading, traders may continue to hold both calls & puts and around the level of 4600 may reduce the calls or write higher calls by holding on to lower calls. As markets correct downwards, traders may hold higher puts but short lower puts to carry along with bought higher puts. Carry over of un hedged long future position should be avoided. Long term investors should make use of every fall to quietly accumulate stocks in the sectors of pharma , fmcg & other sectors like tech, oil & gas, cement for good gains in the medium to long term.