Daily Call - May 11 2009

There is confidence in the air. The NDA looks more cohesive and confident after the Ludhiana Rally. We sensed quite early in the week that UPA was fighting a losing battle. We take that confidence logically further and put out a case for the BJP emerging as the single largest party when the election commission sits down to count the votes. And we hope that the President will go by precedent and call the largest single party to form the Government.
With Crude continuing with its bullish ways, we expect the upstream oil companies to be first off the block. The banks will see some short covering. And with rise in the stock of NDA, PSUs should be on the front burner. We are likely to see the markets opening higher. How we perform thereafter will be a function of how the bulls, who were rooting for the UPA, behave. If they hang up their gloves in despair we are likely to come under pressure. But if they see our point of view, that NDA will be the eventual winner, then the losses in the market will only be to the extent of jitteriness of the international markets. Keep a stop loss at 3550 in the Nifty futures.