Liquidity Keeps Markets afloat

Lets look at some of the stats for the month of September:

1. Nifty has been 6.34% up as compared to 31st august

2. FIIs have pumped in 10,854 crores in September and DIIs have put in 518 crores in September.

3.For the year from Jan'09, FIIs have put 16300 crores and DIIs have put 23535 crores.

The above Stats say a lot. Out of a total of about 40000 crores pumped in 9 months,11300 crores have come in September which amounts to roughly about 26 pc of inflows yet the market moves up only 300 points as compared to 2400 points from the bottom.

So now in spite of so much buying the market is not moving means someone is selling. The Smart Money is moving out of the Markets.

The FIIs display a herd mentality.Now, if this FII flow were to disappear then there would a stampede towards the exit doors.

The cheap dollar and low interest rates in the US are fueling this fascination for emerging markets. FIIs tend to churn the money around.

China down 18 pc from its peak value, Hong Kong about 4 pc and the Indian markets 1.58 % from the peak.

India story is looking good domestically, the only thing which can spoil the party is global triggers.

The Best option is to keep a trailing stop loss for positions at the 50 EMA which comes at 4658.