Sell @ CMP or on rise, stop 680 EOD, target 615 or lower
03 August, 2007
02 August, 2007
01 August, 2007
Nifty -- sucker rally ?
So, we had a CRR hike of 50 bps which wasnt what the market at large was expecting ... and that saw the markets rally a 100 points on the nifty from the low it made after CRR hike was announced ! Everyone rejoiced ... our markets are strong, even in the face of a CRR hike announced by the RBI ! Made me think ... bears getting ready to ambush the bulls ?
Lets have some facts first ... one, US markets, that started the slide on the back of subprime concerns and liquidity worries, have suddenly improved or what ? a one day close of 90 odd points after a sharp fall of 750 points from the top is the end of correction ? anyone heard of a technical rally or a dead cat bounce ?
Two, when was the last time that RBI came up with a rate hike that market wasnt expecting, or expecting even, and it rallied thereafter ??
Three, FIIs sold 8000 cr combined on friday and monday in cash and F&O ... is that figure so irrelevant that the markets will still rally upward with all that FII selling ?
It aint over till the fat lady sings (with apologies to the female readers of this blog)... and she (Dow) is on a song right now ! I will put my neck on the line and say that if Nifty breaks below 4395 with vols, then odds are in favour of us going down towards 4100 ... the only resistance we might encounter on the way would be 4350. Take a look at the hourly charts, if you may ... a monster H&S forming. There is still a chance to tighten stops and take the profits off the table ... the odds are high that Nifty wont be able to break past the recent high it made.
No matter how strong our economy may be or how bright the growth prospects it might have, the same didnt stop May 2006 or March 2007 from happening, did it ? Just as one cant argue with the force of liquidity when it pushes the prices up, one cant argue with it either when it decides to push prices down.
Lets have some facts first ... one, US markets, that started the slide on the back of subprime concerns and liquidity worries, have suddenly improved or what ? a one day close of 90 odd points after a sharp fall of 750 points from the top is the end of correction ? anyone heard of a technical rally or a dead cat bounce ?
Two, when was the last time that RBI came up with a rate hike that market wasnt expecting, or expecting even, and it rallied thereafter ??
Three, FIIs sold 8000 cr combined on friday and monday in cash and F&O ... is that figure so irrelevant that the markets will still rally upward with all that FII selling ?
It aint over till the fat lady sings (with apologies to the female readers of this blog)... and she (Dow) is on a song right now ! I will put my neck on the line and say that if Nifty breaks below 4395 with vols, then odds are in favour of us going down towards 4100 ... the only resistance we might encounter on the way would be 4350. Take a look at the hourly charts, if you may ... a monster H&S forming. There is still a chance to tighten stops and take the profits off the table ... the odds are high that Nifty wont be able to break past the recent high it made.
No matter how strong our economy may be or how bright the growth prospects it might have, the same didnt stop May 2006 or March 2007 from happening, did it ? Just as one cant argue with the force of liquidity when it pushes the prices up, one cant argue with it either when it decides to push prices down.
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