Daily Call - Apr 16 2010

US markets, after opening in red, recovered to close in green for the sixth consecutive day. While the jobless claims data came worse than expected, Philadelphia Fed index rose to 20.2 in April from 18.9 in March, the expectation being 20. March Industrial production stood at 0.1% versus the expectation of 0.7%

Our markets however had a sharp cut of about 1% as heavyweight stocks from Oil & Gas and Banking space saw profit booking. March inflation came in at 9.9%, a 17-month high, and resurfaced the fears of rate hike in the ensuing policy meet of RBI on 20th April. Reports that SEBI has directed FIIs and sub-accounts to disclose more information about their investment structure in India also added to the nervousness. Nifty as well as sensex for the first time after 9 weeks breached previous week’s low. For nifty the level was placed at 5290. While a lower top-lower bottom formation has already started in intraday 60 minute chart, on daily chart the same will happen when previous bottom placed at 5235 is breached. Keep a tight stop loss of 5235 in all the trading long positions.