Buy with stop 550 EOD, target 727 or higher
30 October, 2007
28 October, 2007
22 October, 2007
21 October, 2007
Nifty ... the road ahead (Part II)
Over 6500 cr sell on 17th Oct by FIIs in cash and F&O ... followed by about 3800 cr on 18th and 2700 cr on 19th October. Thats $3.25 billion in three days ! I will wait with interest to see what happens in the next two days. A inflow of $8 billion in last two weeks has taken us up 10% on the index ... wonder what will happen if just that amount of money is withdrawn in next two weeks ? And given today's sell figures, we wont have to wait two weeks for that $8 billion withdrawal to happen .... I had said on 17th evening. As you can see, the 'cheese' for the mouse was of the highest quality, with the markets jumping up on thursday morning on the back of 'strength' shown the day before ... and then the trap snapped and the mouse got caught ! From a high of 5736 on thursday, nifty fell to a low of 5102 on friday, losing 634 points, or in percentage terms, 11% from the high ! And we have just seen $3.25 billion being withdrawn by FIIs as yet !
Expect to see a gapdown on monday morning, and once nifty breaks below 5100, we would see selling pressure that can take nifty to 5025, below which, we are headed for 4875 as suggested on 17th Oct. On the flip side, if Nifty sustains above 5260, it can do a rope trick and head for 5335-5415. However, I would not venture into going long on the back of that bounce as it would most likely get sold into and we would again head lower .... and its an expiry week to boot. So stay alert, dont be 'bull-headed' and think before you act ... do not believe blindly all the sundry rumours that float every day in the markets.
Again, I am not being a bear .. just making sure that those who read the blog dont lose their shirt and a lot more as in May 06. Its easy to buy ... but a lot more difficult to restrain the urge and 'not buy' when you see prices that are 10-15% lower they were just 48 hours ago. Trust me, if we break support on monday, 4875 on nifty wouldnt be too far away ... and though I dont intend to scare the daylights out of you, do keep in mind that IF we break 4875 with volumes, we could be headed for 4750-4650 levels in quick time, and with previous top being at 4647.95, its very likely it will break, opening up the downside to 4300 on nifty. Remember, its not outside the realms of possibility as we have seen it happen less than 18 months back in May 06, India story not withstanding.
Expect to see a gapdown on monday morning, and once nifty breaks below 5100, we would see selling pressure that can take nifty to 5025, below which, we are headed for 4875 as suggested on 17th Oct. On the flip side, if Nifty sustains above 5260, it can do a rope trick and head for 5335-5415. However, I would not venture into going long on the back of that bounce as it would most likely get sold into and we would again head lower .... and its an expiry week to boot. So stay alert, dont be 'bull-headed' and think before you act ... do not believe blindly all the sundry rumours that float every day in the markets.
Again, I am not being a bear .. just making sure that those who read the blog dont lose their shirt and a lot more as in May 06. Its easy to buy ... but a lot more difficult to restrain the urge and 'not buy' when you see prices that are 10-15% lower they were just 48 hours ago. Trust me, if we break support on monday, 4875 on nifty wouldnt be too far away ... and though I dont intend to scare the daylights out of you, do keep in mind that IF we break 4875 with volumes, we could be headed for 4750-4650 levels in quick time, and with previous top being at 4647.95, its very likely it will break, opening up the downside to 4300 on nifty. Remember, its not outside the realms of possibility as we have seen it happen less than 18 months back in May 06, India story not withstanding.
19 October, 2007
17 October, 2007
Nifty ... the road ahead
May 06 revisited ... SEBI issues draft guidelines, panic in the morning with markets hitting LC ... then, we have a change of scenario. As against May 06, this time we see a stunning recovery to pull back almost all the way, closing 2% down, give or take a few. So, have we become 'decoupled' from FIIs enough to go our own way and we are 'mature' enough as investors at large to know the right from the wrong ?
I sense we have an interesting scenario to pan out ... May 06 was just a proposal to levy tax by CBDT, which was a miserly 10% that we all pay. Oct 07 is a proposal to close all PNs based on derivatives. On a rough estimate, that means closing $ 25 billion plus worth of PNs and by extension, closing positions to the same tune from the markets. Yes, there is a window of 18 months to do that ... but knowing that the same has to be done, how many will wait for 6-12 months even once the proposal becomes a law ? What interest would those PN holders have to withdraw in an orderly manner as opposed to pulling out the money whichever way they feel like ?
FIIs sold over 6500 crs today in F&O and cash markets, which mean over $1.5 billion ... I will wait with interest to see what happens in the next two days. A inflow of $8 billion in last two weeks has taken us up 10% on the index ... wonder what will happen if just that amount of money is withdrawn in next two weeks ? And given today's sell figures, we wont have to wait two weeks for that $8 billion withdrawal to happen.
Most people would call me a bear and would point to the 'strong' recovery we had today. In my defense, all I would say is that I view this as not a recovery but as cheese for the mouse ...with the mindless euphoria that nothing can go wrong with India story blinding one to all reason. As always, I will stick my neck out and say that nifty will most likely go down to 4875 levels. Unless we see the PN draft notification being withdrawn completely ( which would leave SEBI and FM with egg on their face and with their credibility in tatters), I would put the odds on going down than up. So keep your eyes and ears wide open .... and dont go berserk on seeing 'red' as a traditional bull !
I sense we have an interesting scenario to pan out ... May 06 was just a proposal to levy tax by CBDT, which was a miserly 10% that we all pay. Oct 07 is a proposal to close all PNs based on derivatives. On a rough estimate, that means closing $ 25 billion plus worth of PNs and by extension, closing positions to the same tune from the markets. Yes, there is a window of 18 months to do that ... but knowing that the same has to be done, how many will wait for 6-12 months even once the proposal becomes a law ? What interest would those PN holders have to withdraw in an orderly manner as opposed to pulling out the money whichever way they feel like ?
FIIs sold over 6500 crs today in F&O and cash markets, which mean over $1.5 billion ... I will wait with interest to see what happens in the next two days. A inflow of $8 billion in last two weeks has taken us up 10% on the index ... wonder what will happen if just that amount of money is withdrawn in next two weeks ? And given today's sell figures, we wont have to wait two weeks for that $8 billion withdrawal to happen.
Most people would call me a bear and would point to the 'strong' recovery we had today. In my defense, all I would say is that I view this as not a recovery but as cheese for the mouse ...with the mindless euphoria that nothing can go wrong with India story blinding one to all reason. As always, I will stick my neck out and say that nifty will most likely go down to 4875 levels. Unless we see the PN draft notification being withdrawn completely ( which would leave SEBI and FM with egg on their face and with their credibility in tatters), I would put the odds on going down than up. So keep your eyes and ears wide open .... and dont go berserk on seeing 'red' as a traditional bull !
16 October, 2007
14 October, 2007
11 October, 2007
07 October, 2007
04 October, 2007
02 October, 2007
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