Nifty Views for June 29 - July 3, 2009

Just one week to go before the budget is announced. Expect extreme movements on Nifty. This is not going to be an easy week for Day Traders.

The expectations now before the budget are exactly opposite to what they were before the elections. That time it was pessimism where everyone was expecting a hung parliament. Markets were positively surprised and we all know what happened thereafter. The worrying factor this time round is the optimism.

It would be good for the markets if they in the 4200-4500 area this week. That ways, at least the downside will be limited if there is disappointed from the budget. However, if we are going to rally higher this week, the fall would also be severe on disappointment from the budget.

Options will obviously command a higher premium this week. One can look to buy a Straddle on Thursday or Friday. There can be good gains to make just as there were just below the elections.

4450-4500 may give resistance to the rally initially and 4300-4220 will provide the support area.

Weekly resistance for Nifty will come at 4460 and 4540. Weekly supports are 4300-4220-4050.