Last two days trading was resulted by major decisions taken by international central banks for coping with the financial tsunami surrounding the world. Ban on short sale in US & timely statement by our FM regarding stability of our banking system triggered short covering even in India. With this double bottom was also formed in the daily charts. OK. Now, the major short covering was over even in international markets??? US govt passed resolution for $800 billion fund for purchase of bad instruments. Over. Then what happens for the further money credit in the international markets. Now that funds are flowing into US. When will it comes to India? May not be at immediate present. In this month FII s were selling in cash markets and investing them debt instruments. We may read it that the FIIs were not repatriating the money now it self because 1. they may expect rupee may appreciate in the immediate future or 2. they may wait for the Indian markets to fall further so as to enter the mid cap at further lower levels. We may read that the investments for debt instruments may not be for short term may be around one year. Hence, we may anticipate a further fall of our markets along with the international markets in the near future.
I feel one may go for exit stocks even at these levels and go for fixed deposits for one year range as being done by some FIIs.
This week our markets may move for settlement. The calls bought by persons like me on Friday should give losses as usual. Panic short covering might also be over. Hence, under any circumstances markets will try for consolidation around these levels and markets may converge in the range NIFTY 4300-4200. +/- 50 points. One may take reverse positions according to market movements. i.e., either put/call which will be cheaper first at 4200/4300 levels. This may be the game for this week. For the next month series one has to wait for this week end trades.
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