Due to expectations from the upcoming Union Budget, the forthcoming week is likely to be highly volatile. The highly eventful week begins with the Railway Budget 2010-11 on 24 February, 2010 to be followed by tabling of Economic Survey on 25 February, 2010 and the most important event, the Union Budget 2010-11 on 26 February, 2010. Also, the expiry of February 2010 derivatives contracts on Thursday, 25 February, 2010 will add to the volatility on the bourses.
On 12 February, 2010, China ordered banks to set aside more deposits as reserves for the second time in a month, as loan growth quickened and property prices surged. The reserve requirement will increase 50 basis points effective 25 February, 2010.
The US Federal Reserve on Thursday, 18 February, 2010, raised the discount rate from 0.5% to 0.75% effective 19 February, 2010 and said the move will encourage financial institutions to rely more on money markets, rather than the central bank, for short-term loans. It was the first increase in the discount rate in more than three years, and the move widens the discount rate spread over the top range for the federal funds rate to 0.5%.
The dollar posted its sixth straight weekly gain against the euro, the longest streak since 2000, as investors speculated on when the Federal Reserve would withdraw monetary stimulus after it raised the discount rate on 18 February, 2010. (My views is to buy IT companies, having huge dollar exposure.........).
From 19 February, 2010, eleven additional securities were added in F&O which are ADANIENT, APOLLOTYRE, AREVAT&D, BGRENERGY, FORTIS, GODREJIND, VIDEOIND, JAIN IRRIGATION, MCLEODRUSS, MUNDRAPORT and ONMOBILE. It is expected that more liquidity will be created in these stock and 8-10% gains possible in select stocks.
During last week, we have seen a huge supply zone is around 4930. If and only if, nifty spot can break 4930 and 4960 level decisively, only then we may see 5020-5050 level in nifty.
On the other side, it has also been noticed that 4900 CE options in February series and Reliance 1020 CE options are being written in those strike prices, which indicates that at present call writers are sure that nifty will not go beyond 4900 and Reliance will not go upto 1020 in this series.
Weekly NIFTY SUPPORT IS AT 4739 AND RESISTANCE AT 4930 NIFTY FUT. (4829).
On the other side, it has also been noticed that 4900 CE options in February series and Reliance 1020 CE options are being written in those strike prices, which indicates that at present call writers are sure that nifty will not go beyond 4900 and Reliance will not go upto 1020 in this series.
Weekly NIFTY SUPPORT IS AT 4739 AND RESISTANCE AT 4930 NIFTY FUT. (4829).
Action Price At SL T-1 T-2 T-3
Buy 4849 4838 4889 4929 4977
Sell 4836 4848 4801 4755 4711
On Monday, we alongwish most of the Asian markets will open with gap-up what they lost on Friday due to Fed's decision on raising discount rates. Indian market will also see a gap-up opening, probably around 4890.
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