India Morning Report: 8500 it is and without a break!

Call auction bidding has definitely been good for the markets, the 15 nminute pre-open allowing investors, brokers and analysts considerable space in gauging market direction all day esp in the liquid end of the market, i.e. the large cap stocks.

Banknifty is still riding the wave of good work in the sector with subdued response thru the rally’s initial 2nd rush whence it rested with the markets at 8200 odd, and is been a peach investment for those holding on. However, as you would also notice, it is not really a safe play anymore even after expiry or in the run up to expiry in these last 2 days and there is no reason for it to really move up or down from 18500 levels. Market plays near a more stable expiry again look to adding speculativce plays and that just increases downward risk in the markets. Especially as the FX and bond markets also enjoin under pressure and Rupee eats through some of the last few days gains for FIIs.

One suspects edgy shorts in PSU banks and the non performing Cap goods sector to get tested in the next series again as the slow recovery combines with ultra low volatilities to make opportunistic trades a mine  for intemperate incoherence

IDFC ICICI Bank and Yes remain great buy trades. HDFC Bank is a long term portfolio pick and SBI still has head room left in the immediate rally, pointing as I said to greater dividends for those who wait.

The rally looks to be safe till 8800 levels but for the big dull thud on December 02, which leaves 8300 levels still ont he radar precluding new trades.

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