Morning update on markets on 31st july 09

Last night dow finally closed up by 83 points at 9152.it went up to 9246 and most of the time remained far above the yearly high of 9175 finally giving up the gain during closing minutes to close below the 2009 highs. One should not be surprised to see sharp up moves in dow towards 10000 mark in coming days with small corrections in between. Similarly brazil too made a new yearly high by crossing june highs during intraday trading and finally closed 1.3% up. European markets which are now trading above the june highs, were up nearly 2% with uk ftse closing up by 1.9%. Asian markets which are already above their june highs have opened strongly and are likely to remain bullish for the day but what is more important is, how strong these markets are around indian opening at 9.55 a.m. One can see much more higher moves in asian markets in coming days.

For indian markets expect a bullish opening near or above the critical level of 4600 and sensex & nifty may try to move up towards june highs of 15600 & 4693.traders may trade long intraday, meaning wait for an intraday correction to go long as the possibility of breaching june highs are quite high in next 1 or 2 days. Future traders may wait for an intraday decline to take long positions in stock futures of metals, oil & gas production, cement, capital goods & power stocks for good gains during coming week.

Option traders should hold on to their 4600 bought calls & wait for intraday declines in the markets to add more. As markets move up towards june highs, they may buy put of 4400 to hedge the calls in the ratio of 3 calls to 1 put. Sensex & nifty managing to stay above 15000 & 4500 levels is a strong bullish signal for further up move during coming week. The only thing to be kept in mind on fridays trading is how much dow can surprise everyone by falling on friday night to impart a negative influence on monday morning.