GOOD MORNING!!!
INDICES TUMBLED AT THE ONSET OF THE TRADING SESSION AS ASIAN STOCKS FELL ON LINGERING WORRIES ABOUT EUROPE'S DEBT CRISIS. WEAKNESS PERSISTED IN MORNING TRADE, BUT THE INDICES PARED LOSS ON BARGAIN HUNTING. A BOUT OF VOLATILITY WAS WITNESSED IN MID-MORNING TRADE. THE MARKET SLUMPED IN EARLY AFTERNOON TRADE ON THE REPORTS NORTH AND SOUTH KOREA FIRED ARTILLERY SHELLS AT AN ISLAND NEAR THE TWO NATIONS WESTERN BORDER. THE MARKETS COMPLETELY LOST ITS GROUND AS NORTH KOREA REPORTEDLY FIRED ARTILLERY SHELLS ACROSS ITS WESTERN MARITIME BORDER, PROMPTING RETURN FIRE FROM SOUTH KOREA. AT LEAST FOUR SOLDIERS ARE SAID TO HAVE BEEN HURT. MEANWHILE, SOUTH KOREA HAS ISSUED ITS HIGHEST NON-WARTIME ALERT IN RESPONSE. REPORTS INDICATED THAT TODAY'S INCIDENT IS ONE OF THE MOST SERIOUS INCIDENTS BETWEEN THE TWO SINCE THE KOREAN WAR IN THE 1950S. THE INCIDENT COMES DAYS AFTER NORTH KOREA REVEALED IT HAD A MODERN URANIUM ENRICHMENT PLANT, POTENTIALLY GIVING IT A SECOND ROUTE TO A NUCLEAR WEAPON. MARKET STARTED RECOVERING AFTER HITTING TWO MONTH LOW IN THE INDICES.
TODAY MARKETS WOULD OPEN FLAT TO NEGATIVE AND REMAIN UNDER PRESSURE AND WE MAY SEE LOT OF VOLATALITY AS THE TRADE PROCEEDS AS WE ARE NEARING EXPIRY. IF NIFTY TRADES BELOW 5910 THEN LIKELY TO TRADE DOWN TO 5868 LEVELS AND BREAK BELOW THIS LEVEL WOULD DRAG NIFTY DOWN TO 5826 AND ANY CLOSE BELOW 5826 WE CAN SEE NIFTY TO COME DOWN BY MORE THAN 5700 AND THEN TO 5540 ANY CLOSE BELOW 5840 WE HAVE SUPPORT ONLY AT 5540 LEVELS SO ONE HAS TO STAY CAUTIOUS IF MARKET BREACHES 5840 LEVELS. ON THE POSITIVE SIDE IF WE HAPPENED TO MOVE UP ONE IS ADVISED TO STAY AWAY UNTIL THE EXPIRY IS OVER. WE HAVE SEEN NIFTY CLOCKING THE HIGHEST VOLUMES IN THE LAST NINE MONTHS OF TRADE THOUGH IT WAS A GREAT AFTERNOON OF RECOVERY WITH BUYING INTEREST SHOWN WITH VOLUMES ONE HAS TO STAY CATIOUS ON BUYING SIDE SINCE THE MARKETS HAVE SHOWN A NEGATIVE TREND ON THE MEDIUM TERM BASIS IT IS WISE TO AVOID BUYING AT THIS STAGE. MAY BE WE HAVE TO SEE THAT WHETHER IT IS A BUYING ON THE BARGAIN HUNT OR JUST RECOVERY ON THE EXPIRY FRONT. I WOULD SUGGEST ONE SHOULD STAY AWAY FROM MARKETS TILL NIFTY CLOSES ABOVE 6014 LEVELS ON A SHORT TERM NOTE. ONE CAN GO SHORT AT HIGHER LEVELS IN THE MARKET KEEPING 6014 AS STOPLOSS. SHIPPING AND FERTILIZER STOCKS LOOKS GOOD FOR INTRADAY.
ONE CAN ONLY RISK BUYING CALLS FOR THE CURRENT MONTH WHOSE EXPIRY IS TOMORROW AS THE PREMIUM YOU PAY WOULD BE VERY LESS AND THAT TOO STOCK SPECIFIC CALLS AND NOT INDEX WHEN MARKETS SLIDES DOWN (IFCI AND TATASTEEL CAN BE LOOKED AT WHEN MARKETS FALL)
POSITIVE STOCKS BAJAJ AUTO, DISH TV, SANGAM (I)
