The markets ended 2.3 pc down to close at 5089. This is its lowest close since early Jan 2012. Is it all over for the equity story or is it a buying chance? Let us have a look.
Fundamentals:
1. The budget session opens on Monday. The government is expected to clarify on the GAAR issue and the Mauritius issue. Expect the government to blink. A deferment to 2013 with the DTC of GAAR and the markets will cross 5300 easily.
2. The French elections will be out of the way by Monday. Whatever knee jerk reaction with the election of Hollande will pass. Remember the markets have already factored in his victory.
3. The crude has corrected quite a bit. It has reached 113 dollars to a barrel. Rupee has weakened but any further weakening of crude will help the Indian economy.
4. Rupee is at an attractive level for the FIIs to bring in more funds at around 54. Even if rupee goes to 50 and markets do not go anywhere that is a 10 pc return on investment.
5. The FIIs are still buying. Friday figures were around 400 crores.
Technicals:
1. As per Elliot, we are in the last leg of the corrective wave B.
Wave A was 4532 - 5629. B is 5629 and ongoing. 50 pc retracement comes to 5081 which is already tested.
2. As per the trend lines, big support comes around 5000. If this violated, we fall back in the channel.which can take us to 4200.
3. The entire down move gets over above 5280. Hence 5000 and 5280 are 2 key areas to watch.
My assessment looking at the time taken for correction and the magnitude of fall is that this is just a correction and not a fresh impulse down. We should see one more up move taking us to 5700-5900. For the cautious folks, PSU banks giving a tax free dividend yield of 7 pc are the place to park their funds. For those interested in stock picks, we have Laksmhi and my list.
Fundamentals:
1. The budget session opens on Monday. The government is expected to clarify on the GAAR issue and the Mauritius issue. Expect the government to blink. A deferment to 2013 with the DTC of GAAR and the markets will cross 5300 easily.
2. The French elections will be out of the way by Monday. Whatever knee jerk reaction with the election of Hollande will pass. Remember the markets have already factored in his victory.
3. The crude has corrected quite a bit. It has reached 113 dollars to a barrel. Rupee has weakened but any further weakening of crude will help the Indian economy.
4. Rupee is at an attractive level for the FIIs to bring in more funds at around 54. Even if rupee goes to 50 and markets do not go anywhere that is a 10 pc return on investment.
5. The FIIs are still buying. Friday figures were around 400 crores.
Technicals:
1. As per Elliot, we are in the last leg of the corrective wave B.
Wave A was 4532 - 5629. B is 5629 and ongoing. 50 pc retracement comes to 5081 which is already tested.
2. As per the trend lines, big support comes around 5000. If this violated, we fall back in the channel.which can take us to 4200.
3. The entire down move gets over above 5280. Hence 5000 and 5280 are 2 key areas to watch.
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