Awaiting the Results season

It was a three day trading week and the markets went up by 0.5 %. The Results season is almost upon us. Infosys comes out with results on Friday.

1. The 2 key events which could drive the markets in April are the earnings and the RBI policy on the 17th of April. I do expect a CRR cut in this policy as well. Inflation has started heading up again and unless we have good monsoons, it is unlikely that the inflation will come down fast.

2. The Results are usually factored in by the markets and unless we have very good or very bad results, there should not be any impact on the stock prices.

3. As per Elliot, the C wave of a A-B-C up move is ongoing from 5136. C wave will be in terms of 5 waves.
Wave 1 from 5136-5378 = 243 points. Wave 2 ongoing with targets of 5286 (already done), 5257 and 5228. Only below 5184, the entire up move is over.

4. Waves 3 to 5 should take about 1.5-2 months and target about 5650-5977. We will analyze the sub waves as we come across.

5. This also means that a short term trading buy opportunity is staring us in the face. If anyone is interested, there is a list of stocks identified by me and Lakshmi. I trade in and out of these stocks.

6. This may be a bear market rally in a long term bear market. The reason being the 10 year gilt rates are still at 8.68 % not far from the 8.92 % peak rates. Bear markets always end with interest rates coming down. These are not showing any signs of coming down. Crude oil is at 125 dollars a barrel.

7. Such markets should be treated as trading opportunities to lower the cost of acquisition and move out. Keep these stocks for the dividend yield and build a very long term portfolio.

I had a query from Ganga that if the markets topped out in May, how would they reach 4200-4300 in June. The markets will begin the process of going lower in May and would at least take a year to hit lower levels.