Inflation falling down to single digit and DOW having respected its crucial 8000 level are the signs that could give a fillip to our markets in days to come. Asian markets are also trading in the green after three days of fall.

Technically, we did not close too far below 9600 on SENSEX. So, if there is a reversal up from current levels then that could help us move above the crucial 11000 mark in a couple of days. Shorts had started building up and weaker short positions could get squared off immediately beyond 11000. This might help us rally towards 13000. But if we have a lukewarm session today then we are headed towards lower levels again.
Please remember that medium term turns positive only above 13000, and long term only above 15000. So, it would be a period of cautious optimism until then as we are still in a bear market.

We had suggested put options in SBIN below. Loss could be booked in its weaker short positions in November series if it closes above 1375.
RELIANCE held onto its crucial support at 1150. So, extra put options in this stock also could be squared off but keep holding the long straddles as it may gyrate in a big range for a few weeks more.
NIFTY long straddles may also give reasonable returns. Play carefully. NIFTY options are trading with very high premium but buying into DECEMBER series is recommended. There are opportunities in Year 2009 June series besides Year 2011 June series also in NIFTY options.

RELINFRA and ONGC are the two stocks that look attractive for long positions. They have sufficient liquidity in their options segment also. Buying call options in these two counters looks profitable. But stay light. RELINFRA can move upto 700+ and ONGC towards 875+ (only if upward momentum continues).