Friday mood may get punctured

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There are bad cues from global markets. It will be a truncated week of trade and Friday's mood may be punctured. Markets will still be within a trading range and it will be tough to break earlier levels.

Friday's closing was terrific but things have not exactly been very good over the weekend. This morning we come in with some fairly bad cues from the global markets. Tropical storm Gustav is threatening to wreak havoc with crude oil price as well. So that is a big thing to watch over the next couple of hours. We have got a truncated week of trading out here, but Friday's mood might just puncture a little bit as we go into trade this morning. No panic but not as euphoric as the note that we closed Friday end.

On last week's trade:

Friday was very good, the first part of last week was not great but Friday we had a terrific rally and I think it might have raised hopes that the market might get out of its trading range and pierce through that 4,400-4,450 barrier that we are getting stuck in on the Nifty . But this morning we will get pegged back again maybe sub-4,300 once again and then take it from there.

So despite Friday's big move up, despite the optimism on the macros towards the end of the week, I suspect that we are still within a trading range, the range which has held for a couple of weeks now and despite Friday's push it might be tough for the Nifty to break pass those levels that we just spoke about. So maybe a soft start could be a bounce back after that but essentially within a range still.

Asian Indices:

The bad news is from global markets this morning. The US did not do very well on Friday though it is shut tonight; the cuts are quite deep across Asia. Almost 3% cuts in a few markets like China, Taiwan, Korea and the Hang Seng has recovered somewhat, but it is still down about 300 points. So between 1.5-3% that is the extent of the fall in Asian markets today.

On Nifty:

Nifty looks range bound. Last week, the range threatened to break on both sides, the first half of the week, we went down to 4,200 and it looked like that the 4,200-4,400 range could break on the way down, then we got the inflation number which the market liked and we saw a huge short covering rally which brought us back to nearly 4,400, and now we are pushing against the top end of the trading range.

Like last week when 4,200 also looked like it would break and we would go down below that range. I think this time too we may seem like breaking that range of the top end at around 4,400 or 4,450, or we may not end up doing that. Despite the volatility and the sharp swing of the last few days, my guess is that we are still in that trading range and we haven't successfully been able to break out.

This morning we will get pegged back, 4,360 is where we closed on Friday, every possibility that we start the day at 4,300 or maybe even slightly even lower than that and because the bulls have charged since Friday, you could see a bit of covering and the bulls coming back and buying the Nifty below 4,300 which could lead to a bit of bounce back.

But essentially, today's market is 4,300 around which you will see volatility and a bit of a trading, maybe over the next couple of days unless if crude behaves it self, which is a big question, you do get to 4,400 plus kind of levels but does the market have enough steam left in it right now to break past that level and go back to 4,650, I am not quite sure just yet. We will wait and watch but right now we need to resign ourselves for more volatility within that 200 point trading range of 4,200 and 4,400 or 4,250 to 4,450 which ever way you call it for the Nifty.

Uncertain times for traders but both camps are a little edgy at this point in time, the bulls and the bears, so they don't know which sign post is going to get taken out.

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