"INDIAN MARKET :: THE LAST WEEK AND THE NEXT"

As we have seen in last few weeks, Indian markets are dancing with the tune of Global markets scenario, and therefore, it is necessary to go through Global cues first.

GLOBAL MARKETS had another topsy-turvy week, though they did manage to rebound by the end of the week. The Hungarian Prime Minister announced an economic plan that included cuts in public-sector wages. Greece's main share Index hit its lowest level since March 1998 and the Euro sank to a four-year low against the dollar. In addition, credit rating agency Fitch warned the UK that its fiscal challenge was formidable, and called for much deeper reductions in public spending. The recently elected British premier David Cameron said that the proposed emergency budget, to be unveiled on June 22 would change the nation's whole way of life.

However, the panic proved to be short-lived as investors heaved a sigh of relief following the release of a spate of encouraging economic numbers, particularly from the Asia Pacific region. Economic reports from Japan to Australia reassured investors that the global recovery is in tact, notwithstanding the European debt crisis. Beijing announced a sharp jump in May exports, boosting investors' confidence about its economy's strength. The US Federal Reserve said that it would act as needed to support the economic recovery. Belgium, Portugal and Spain found good demand for their bonds last week. Italy too carried out a successful sale on Friday, easing immediate concerns about funding problems on the euro-zone periphery.

INDIAN MARKETS after ups and downs in last week, the Sensex and Nifty managed to close above the psychological levels of 17,000 and 5,100 levels respectively. The two main indices recovered from early week's hiccups on the back of encouraging economic data from across Asia.

In the coming week, events like monthly inflation data for the month of May on MONDAY and first instalment of corporate advance tax numbers giving the hint of Q1 June 2010 results may decide the future path of the market. An empowered group of ministers (EGoM) meet on Thursday, June 17 2010 considering de-control of fuel prices will also be in the focus. Progress of south-west monsoon will also play a crucial role in coming week. The global markets may continue to impact the domestic market. FII flows will also decide the course of the markets. Market is at higher side of the range of 4800-5200. Nifty spot has closed at 5119 this week, against a close of 5136 last week. The Put-Call Ratio has increased from 1.40 to 1.44 levels and the annualized Cost of Carry (CoC) is negative 1.37%. The Open Interest in Nifty Futures has increased by 9.05%.

Angel Securities: BUY Reliance Industries for a target 1260; overweight on Maruti, M&M and Tata Motors.

PINC Research:: Buy Tata Steel at CMP with a six month's view for a Target 540-545

UBS Investment Research:: Buy Bharati. Neutral on RIL

In my view, NIFTY will face a tough resistance at 5200/5225 and it has a strong support at 5000 in near term as per the open interest data from 5000PE and call writing of 5200CE. In any case, if NIFTY crosses 5215, it will be a decisive move and we may see 5400 level.
On Monday, watch NIFTY future around 5165. If it trades with less volumes, GO SHORT with stoploss 5195 and/or 5215(positional).
Disclaimer: I have no position. In fact, I may not be able to trade for some days due to some other pre-occupied activities and probably I will not be available during trading hours. SO, TRADE SAFE.