Rate follows GBP in two-way action, holding support now above the 1.2720 area. Aggressive traders can add to open longs on this dip but BE CAREFUL as volatility is just huge. Test of today's lows likely at this point but traders note big names on the buy side on dips under the 1.2600 and 1.2620 area.

Upside stops likely cleared at the overhead resistance at 1.2720/30 area now with stops likely the other side. Key 1.3030 area likely next; failure to hold 1.2900 likely going to be the test for the bulls this week.

Rate two-way and recovers after a marginal new low into support overnight. 23 year lows in sight but the rate is attracting bids. Reversal off weekly lows a positive technical but the volume needs to come up and I think the shorts have yet to bail as a group.

Likely an upside rally is still in the works but the rate needs to rebound hard to wash-out the shorts again. After yesterday's action I think both sides will take a break. Traders report stops in-range adding for two-way action. Long-term tech resistance now at 1.5000 area likely to cap near term but stops are building above and the 1.5000 handle is a big psychological number.

Volatility was the rule again today but USD action was not as pronounced as yesterday's whipsaw and the USD ended mixed against the majors to finish New York today. Most of the majors ended after testing important S/R areas and finishing the other side suggesting that the USD is continuing to top around current levels. Ending near the highs after a pullback during the day was GBP and EURO. GBP rallied to hold the 1.3800 handle after scoring highs at 1.3841 suggesting that the low-volume dip to the
1.3550 area overnight was a bear-trap.

Pfizer the pharmaceutical major has tied up with Max Healthcare to help smokers quit and plans on opening 600 smoking cessation clinics by the end of 2010 in and around New Delhi. India has 120 million tobacco users and the cessation clinics are much needed.

After a two-day break, the Sensex advanced in early trade in a catch-up rally because of continued buying action witnessed IT and FMCG stocks.

Industrial output data is likely to be declared today.

BSE Midcap and Smallcap index gained 0.56% and 0.52% respectively.

Sudhanshu Pandey, technical analyst with LKP Shares, said, “The markets are witnessing a technical bounce. Investors should avoid bottom fishing at this stage.”

Karvy Stock Broking Limited has maintained ‘Buy’ rating on Reliance Industries stock to achieve a target of Rs 1200-1220 within 1-2 days.

According to Karvy, day traders can buy the stock below Rs 1150 with a stop loss of Rs 1125.

Shares of the company, on Monday (Mar 09), closed at Rs 1153.85 on the Bombay Stock Exchange (BSE). Current EPS & P/E ratio stood at 99.41 and 11.92 respectively. The share price has seen a 52-week high of Rs 2706 and a low of Rs 930 on BSE.