Dated 24th February, 2009

Markets plunged sharply amid growing concerns of slow down and uninterrupted flow of bad news from the global markets. Almost all sectors too the hit with Banking index falling by a whopping 14% week on week. Small, medium and large cap stocks fell with out any exception. ICICI bank was the worst Nifty loser and lost more than one fifth of its market cap. Hindalco, Rcom, Reliance Infra, Tata Steel, Tata Communication, M&M, SAIL, HDFC, Suzlon, SBI, Unitech, PNB, RPL, L&T and Reliance were other counters which lost more than 10% week on week. Maruti, BPCL and ITC were the only Nifty stocks, which managed to end the week with out any losses.

Unlike the trend has been for years, we are going to witness the overall markets dominating the futures movement and the expiry rather than futures outstanding dictating the overall market trend. Markets might open with a downside gap and may take support at lower levels. 2660-2680 provides a good support for Nifty and we may see a bounce back from these levels. It Nifty manages to close below this band, we might see another sharp fall to 2500 very soon. Markets have to correct to levels of October-November lows sooner or later in line with the other global markets and it is a good opportunity for traders to build short positions in Nifty at rises. The heavy weights have to correct from this juncture and we will witness the 2500 levels in Nifty very soon. We have been recommending short positions since past 6 months and we continue to hold this belief that markets are heading for much lower levels. And the outlook cannot be complete with this last sentence “Avoid long positions at any level”.