The markets digested 2 events of the Central Banks of the US and the RBI coming out with policy pronouncements. Let us see what they mean for the markets.1. The US Fed has started slow tapering of the bond purchases from January. The markets did ot show any major negative reactions because it was reduced only by 10 billion USD and the Fed softened the blow by saying that the low interest rates regime is here to stay.2. The tightening of the monetary policy means that the party for Gold is over unless there is some major event like a geopolitical...
Sunday, 22 December 2013
Saturday, 14 December 2013
There is an old adage in the markets, Buy on Rumours and Sell on News. The markets displayed this by hitting an immediate high on the news of BJP victory and then promptly retreating back to close the week 1.5 pc down. Let us see what can happen next?1. The FIIs have continued to buy every single trading day in December. The DIIs selling is lessening. As long as this FII buying continues, the markets will not tank.2. This week, all eyes will be on the Central Banks as we have the FOMC meeting and the RBI meeting. I expect some kind of Repo Rates...
Saturday, 7 December 2013
The ballots are counted and the victors have been declared. Who are the real winners and the losers? Are the election results a mirror to what is going to happen in the next 6 months, general elections? Let us try and explore. How will the markets react? Lot of questions to answer.1. First things first. Whatever be the minor change in positions after now, the message is clear, the voters want the Congress out. The party has been almost wiped out in Delhi, in Rajasthan and Madhya Pradesh they have won very few seats. If the BJP can secure almost...
Saturday, 30 November 2013
The markets rallied smartly by 3 pc during the expiry week to close just below the 6200 mark. The Elections are on in full swing with Rajasthan going to the polls now and Delhi on December 4th. The next immediate trigger for the market will the results on the 8th of December which is next Sunday.1. The heartening part of this rally is that even the mid caps have begun to rally. Voltas gaied something like 23 pc last week. All signs indicate Nov-Feb rally with a market top for the year being hit sometime around the Jan-Feb period.2. With the G-Sec...
Saturday, 23 November 2013
In the absence of any major decisive triggers for the markets, they continued to drift aimlessly losing another 1 pc for the week. Let us see if any triggers exist before the election results of the State Assemblies on the 8th of December.1. The Talking Heads on Television continued to play games with tapering stoppage or no. This is a good game for traders. Short term movements of 100-200 points on either side are the norm.2. FIIs have net bought 5600 crores for November so far and DIIs have sold 8200 crores. The markets have corrected by about...
Saturday, 16 November 2013
The market continued its correction, dipping further by 1.4 pc. Let us try and examine the pros and cons of the market movement.1. The markets are correcting gently, about 4 pc from the Diwali top. This could just be a bull market correction, looking at the slow nature of the fall.2. The FIIs have been net buyers for all the trading sessions in November 2013. Only, when they start unloading will the markets have a major fall.3. The major question is why are FIIs buying? It is not becuase of Narendra Modi but the continued avaailability of...
Saturday, 9 November 2013
The markets dipped by around 2.8 pc for the week. The markets hit a new high for Diwali and since then have been correcting. Is it just a correction or is it something else?1. The thumb rule is that the markets tend to react from the previous top. 6350 has been a sort of double top. It is natural that the markets react from here and then come back and blast through.2. This has been an unusual correction, the large caps have corrected and the mid caps have rallied. This also means it should just be a correction before resuming the journey upwards.3....
Sunday, 3 November 2013
The markets continued their solid performance and gained another 2.6 pc to close above the previous 2013 high. We look all set to challenge old highs and how the markets react from there will set the tone of the markets.1. The PSU Banks joined in the party this week and now one needs to see if the beaten down sectors join in the party or the rally fizzles out. Sustained closing above 6357 will herald fresh new territories to be conquered.For this Diwali, I would strongly reccomend Godrej Properties trading around Rs 370. It recently came out with...
Sunday, 27 October 2013
The markets had a mild correction for the week, correcting about 0.7 pc from the previous week close. Overall, the markets are firmly in an up trend. Let us see what the pre-Diwali firecrackers are in store, if any.1. This is a liquidity based rally and no mistake should be made about this. Once, the plug is pulled for whatever reason be it ease of tapering or hung parliament, the markets will collapse.2. 1 leg up from 5118 is over at 6142 and the correction from it ended at 5701. If we are in a third wave up, then it can be a fast up move from...
Sunday, 20 October 2013
The markets continued to inch up higher by 1.5 pc to close at 6189. They are now within touching distance of 2013 highs and very near to all time highs. It looks like the scenario of 6500-7000 is playing out.Let us see what we can do in such a scenario.1. The markets are close to all time highs but the broader market is down. When I look at my portfolio very few stocks are close to their highs. It has been driven up on the back of IT companies especially TCS.2. Every rally has gotten narrower. This could either mean we have a sudden collapse one...
Wednesday, 16 October 2013
Since the beginning of this month, the US government has been in partial shutdown. That means all government services and activities barring a few emergency and security services have come to a halt and government employees have been asked to proceed on unpaid leave. Why?I had written a guest post for Subhankar which can be accessed here:http://investmentsfordummieslikeme.blogspot.in/2013/10/us-shutdown-looming-debt-ceiling-and.html...
Sunday, 13 October 2013
The markets continued with their upward march to end the week with a gain of 3.2 pc. Infy had surprisingly good results (My unscientific analysis went for a toss) and the markets looked to be in a festive mood.1. The IIP results came out after market hours. They were poor but that mainly due to poor Capital Goods data. The Capital goods data was very good in previous 2 months so normalized.2. The US Gridlock needs to be resolved by by Oct 17th. India is a winner either ways. The longer the gridlock continues, the longer the easy money will be available.3....
Sunday, 6 October 2013
The markets gained 1.3 pc to close at 5907. The markets rallied smartly on Friday only to give back all the gains. The markets are currently awaiting fresh triggers. Let us try and examine what they could be.1. The Results season is upon us.Infy Results will be upon us on Friday 11th October. They will set a trend for the markets.1 non scientific observation I have made is Infy Results usually on a Friday are quite bad. Lets see if the trend continues.2. The US Government shutdown is still going on. If not resolved by Oct 17th, the debt ceiling...
Sunday, 29 September 2013
The Nifty closed about 3 pc lower for the week. After a massive 1000 point rally from 5118, the index seems to be cooling off as the breadth becomes narrower and narrower.1. The news flow seems to have been exhausted for the markets. After the rapid movements of August and early September, the indices are cooling off which is a good sign.2. From here, where the markets can be anybody's guess. There are 3 options:a. Straight up from here (Least Likely)b. Correct to 5500 levels and then rally upc. Continue with the long term correction.Options...
Sunday, 22 September 2013
The Markets rallied on hearing the FED will not halt Quantitative easing and fell on the RBI policy. The markets closed up 2.4 pc for the week. Let us look at the Technicals and Fundamentals.Fundamentals:1. With easy liquidity on tap, as long as FIIs buy, the markets can go up. There were 2 main irritants, Syria and the FED stopping the easing.2. The drama over shut down in US over spending and H1 Results can be negative for the markets.3. The RBI has made it clear for the moment, it has done what it could have done. No more cues at least in the...
Sunday, 15 September 2013
The truncated week started with a big bang. The markets ended up with a net gain of 3 pc for the entire week. The coming week will be decisive for the markets in the short term.1. The FOMC decision on tapering comes on Wednesday (our markets will get impacted on Thursday) and we have our RBI policy on Friday the 20th.2. Both are news based events and it depends on what the FED says. My guess is some amount of tapering will be announced.3. 6000 is a key resistance beyond which we may scale new highs.4. Any rally has to correct. The current rally...
Monday, 9 September 2013
The markets have bounced back well from 5118 to rally almost 570 points. Let us see what the next steps for this rally could be.1. The entire range from 5720 - 5800 has a lot of resistances. The golden ratio for the fall from 6093 comes at 5721 and for the entire fall from 6229 comes at 5804.2. The 200 EMA comes at 5724 and the 200 DMA comes at 5834. The 50 DMA also comes in at 5704.3. The current up move can lead to new highs if we cross the 6000 mark.4. We have taken 9 sessions to fall from 5754 to 5118 ad so far 7 sessions to reach 5680....
Saturday, 31 August 2013
The markets closed the week flat to end the month of August with a fall of 4.7 pc. Let us see what is in store for the month of September.Since, fundamentals do not change every day or every week to a very large extent, this week, I tried to capture the trend lines in 3 different time frames.1. Daily Timeframe:We are very close to breaching the down ward sloping trend line from 6093. Breach of this upwards means the whole down move may be over and...
Sunday, 25 August 2013
The markets had a sharp dip followed by recovery in the later part of the week to end at 0.7 pc down. The Rupee, Government Bonds and the markets all recovered towards the end of the week.1. The Equity Markets will have their monthly settlement on the coming Thursday. Many times during the time before settlement, markets move in opposite direction to how they have moved throughout the month. This is a thumb rule and need not be the case always.2. The Markets have over reacted and there could be some recovery towards the mean. The markets always...
Saturday, 17 August 2013
The markets tanked on Friday thus undoing the gains of the entire week in 1 week and closing the week a net 1 pc down. What led to this panic fall?1. The surprising part of Friday's fall was that there was no big gap down. In fact the market was trading mildly negative for some time. The usual suspects of FIIs have been blamed. The FIIs sold only 600 crores of shares and DIIs bought 732 crores.2. Even more surprisingly, for the month of August the market is down more than 4 pc but FIIs have actually bought 1400 crores worth of shares.3. This would...
Saturday, 10 August 2013
The markets lost another 2 pc to close the week at 5565. The market appears to be oversold in the short term. This can result in some kind of bounce. We would have to see the nature of the bounce.1. The FIIs have stopped selling in the moth of August. They have been net buyers so far in the month. The markets have continued to fall despite this.2. 5400-5500 have a confluence of supports from which a bounce is due. When the markets fell from 6229,...
Saturday, 3 August 2013
The markets continued on their downward spiral to close lower by 3.5 pc to close at 5677. The markets are clearly in their 3rd leg down from 6229. We may just be entering a 12-18 month bear market phase.1. If this is merely a correction from the top of 6229, the markets should end their correction soon. Below 5627, we can confirm that the entire rally which started in Dec'11 is indeed over.If this is a 3 leg correction A = 6229 - 5566, ...
Saturday, 27 July 2013
The markets declined about 2.4 pc to close the week in the red. This was on the back of RBI further tightening the interest rates to prop up the rupee. This led to the banks tanking and taking the markets down with it. The Markets are at an interesting point right now.1. The current rally from 5566 to 6093 has been led by FMCG, Pharma, IT and Oil and Gas Sector.The banks have taken a substantial beating. The Bank Nifty has corrected around 20 pc from its peak where as the Nifty has corrected only about 5 pc from the top.2. This now leaves with...
Saturday, 20 July 2013
The Markets had a roller coaster ride last week. Nifty ended with a net gain of 20 points for all the twists and turns.Let us see what the markets have in store for us.1. The RBI hiked interest rates in a surprise move on Monday to prevent the rupee from collapsing further. This led to the 10 year yield spiking up from 7.5 % to 8.1 %. By the end of the week, the yield had come down to 7.94%. This is a golden chance for those seeking to invest in Gilt funds as over a period of time, the rates have to come down for the economy to improve. Over...
Sunday, 14 July 2013
The markets gave a breakout last week. It closed up by 2.4 pc over the previous week. So is the worse over for the markets? Let us try and explore this week.1. The markets if they were correcting the down move from 6229 - 5566, then a 3 legged move was on.Leg A 5566-5904Leg B 5904 - 5760Leg C 5760 or 5802 and ongoing.If this is just a corrective up move then max, it will top out around 6100-6115. Ay move above this will lead to breakouts and new highs.2. The FIIs have stopped their large sales and have small sale figures or net buys. If this continues,...
Saturday, 6 July 2013
The Nifty gained just 25 points or 0.4 pc for the week. There was an absence of major triggers for the markets. The next cue will be from the Q1 Results which will be kicked off by Infosys next week.1. The markets are correcting the up move 5566 to 5904. This is a corrective down move featuring 3 legss.A - 5904 - 5760B- 5760 - 5900C - 5900- ???This could be anywhere in the range of 5760 to 5677. The supports come in at 5735 and 5695.2. Typically, in the first 2 weeks of the months, sometimes the markets are kept range bound so that the premium...
Saturday, 29 June 2013
The Markets bounced back to close the week up at 3.1 pc over the previous close. The Government came up with Reforms at the end of the week in the Oil and Gas space to give further leg up to the markets.1. India's Current Account Deficit (CAD) or the difference in Dollars between our Imports and Exports came down to 3.6 pc for the January to March period leading to the rally on Thursday.2. On Thursday, evening the Government doubled the Gas Price to 8.4 USD from April 2014.This will give more incentive to invest in Oil Exploration leading to less...
Saturday, 22 June 2013
The markets fell another 2.4 pc thanks to comments by the Fed Chairman. Let us try and see what the next week and next few months have in store for us.1. The markets right now are poised around the critical support area of 5600. There is an iteresting study done by Sanjay Raghuvanshi, who has calculated that markets rarely have an expiry which is + or - 300 points then previous expiry. Last expiry was 6124 which also means that this expiry can be...
Saturday, 15 June 2013
The markets declined by another 1.2 pc. They staged a very smart rally on Friday to cover quite a few losses. This current week is going to be a news driven week.The markets would be news driven with a knee jerk reaction either ways depending on the news flow.1. The RBI Policy is on Monday and there cut be a rate cut of 25 basis points and a CRR cut of another 25 basis points. Last couple of times, markets have reacted negatively to the RBI policy and this time, it may just be a positive surprise. The way the markets rallied on Friday might be...
Saturday, 8 June 2013
The Nifty lost 1.8 pc to close at 5881. The markets have completed 3 weeks since hitting the top of 6229. If this is just a small correction it should get completed in the next week. Let us look at the next triggers for the markets.Fundamentals: 1. The Monsoons have set in well. Thus, 1 major negative trigger is out of the way.Any signs of a delay in monsoons would have led to the markets falling.2. A good monsoon also sets the earliest timeline of elections as November 2013. The Govermet would like the money from the good harvests to be in people's...
Saturday, 1 June 2013
Last week on Friday, the markets retraced the gains of the entire week to finish the week flat. Let us try and explore what the markets have in store for us.Fundamentals:1. The Monsoons have arrived on time and the prognosis is for good monsoons. This should bode well for the markets.2. The GDP figures have come as expected and are behind us. For all the talk by RBI, the interest Rates should soften.3. The Hike in Diesel and Petrol prices should underline the Givernment commitment on fiscal stability.4. The crude oil prices continue to weaken...
Saturday, 25 May 2013
The markets tanked about 1.3 pc. After 5 weeks of solid up move, this correction was much needed and healthy. Let us try ad see the road ahead for the markets.1. The up move which started from 5477 can extend to 6350, 6500 or 7000. The first leg got over at 6229 and this is the correction to the move from 5477 to 6229. The markets can halt at 5942, 5853 or 5765. Only below 5627, the rally has ended.2. The prices of crude oil have stabilized at lower levels and gold imports are also slowing down. This will help the economy and the current account...
Saturday, 18 May 2013
The markets gained another 1.3 pc to touch 6200. There are several reasons why the markets can touch the previous highs and exceed them. Let us try and explore the probabilities.1. The FIIs are continuously in the buy mode. The liquidity is propelling the markets higher. The DII selling is easily getting absorbed. 2. The Parliament is having its recess and will open only in the Monsoon session in the last week of July. This will ensure that there are no political storms to spook the markets.3. The Monsoons are said to be on track.Looking at historical...
Thursday, 16 May 2013
The next general elections for Lok Sabha seats are less than a year away. Political parties have already started pre-election activities like choosing likely candidates for the PM’s post and discussing possible alternative alignments for government formation.The period prior to a general election is usually one of uncertainty for investors. Uncertainty leads to selling, or at best, staying on the sidelines – neither being particularly conducive for a bull phase. In this month’s guest post for Subhankar, I had presented a different viewpointContinue...
Sunday, 12 May 2013
Sunday, 5 May 2013
For the month of April, the range arrived statistically was 5500-5900. We ended up doing 5477-5962 with a close at 5930. Now let us look at the month of May. There is one disturbing fact for May.1. The low of the May month is always much below the close of April moth. The close for April was 5930 and a close of 6 pc below that leads us to a figure of close to 5600.2. Overall, May month on an average leads to a flat close.There are swings of at least...
Saturday, 27 April 2013
The markets soared again this week eking out a gain of 1.5 pc. The RBI Policy has been factored in with all this rise. Let us see and explore what the markets have in store?1. The markets have built in so much expectation that a 25 basis point announcement will lead to the markets correcting. Only 50 basis points and more can help continue the rally.2. The markets have also reached the key 5920-5950-5970 levels. It has been an almost breathless rally from 5477 levels in a matter of 2 weeks. The markets may well keep going up in the early part of...
Saturday, 20 April 2013
The markets gained 4.6 pc this week, to stage an amazing recovery. Let us try and examine if the recovery is sustainable. The next week should be a volatile week as is it a truncated week with expiry also down the corner.Fundamentals:1. Gold crashed below the 1400 USD ad Brent crude is trading below the 100 USD. These are 2 key fundamental factors which should help the rally if this continues. India's main problem are the high level of crude oil and gold imports. Lower prices of these 2 commodities should help keep the Current Account Deficit low.2....
Saturday, 13 April 2013
Infosys came up with a poor set of numbers again and that led to the markets tanking on Friday. Overall, the week ended with a loss of 0.4 pc on the Nifty. Let us try and examine what has changed.1. Crude came down to 102 dollars a barrel and Gold plunged. This will help the Current Account Deficit as the 2 majors imports of India are crude oil and Gold. A falling Gold price will have 2 impacts, one is cost will be less and secondly demand will abate...
Saturday, 6 April 2013
The markets continued on their journey south. They lost another 2.3 pc to close at 5553, a crucial support level. Let us try and see what can influence the markets in the next few days.1. FIIs have also started selling and that led the markets to go down further. The FII selling is only in small quantities but the support being provided to the markets so far is absent. Further selling by the FIIs can lead to the markets tanking further.2. The commodities are also correcting.Crude and Gold, 2 of India's biggest imports are also falling down.The...
Saturday, 30 March 2013
The month of March has drawn to a close. Let us see how the markets have usually fared in the month of April. March ended with a marginal loss of 0.2 pc which was ironically the average loss in the month of March.1. The month of April has almost always seen a loss of at least 2-3 pc below the March close. This implies that 5500-5550 should be tested at least once.2. The month of April has been positive 5 times and negative 7 times in the past 12...
Saturday, 23 March 2013
The markets had a free fall in the last week losing about 3.8 pc. There seems to be despondency all around. Is it really all gloom and doom as portrayed? This week let us step back and look at the next 1 year.1. The elections can be held latest by April 2014. There are 3 windows right now, September 2013, December 2013 or April 2014. The most likely option looks to be December or April. The reason for this being is that the logistics demand at least 3 months post the the Government falls. June-September is the Monsoon season in India.2. For all...
Sunday, 17 March 2013
The markets are having a roller coaster ride. They are up 1 day and down the other. So, let us see what they have in store for us for the remainder of this financial year. For the last week, the markets were down 0.6 pc.1. The key event for the next week is the RBI policy on Tuesday. If there is a rate cut, the markets will rally. I think there would be a rate cut in some form. Let us see what the RBI Governor has in store for us.2. The advance tax figures may point to some revival in growth figures.It is ow for the RBI and the Government to build...
Sunday, 10 March 2013
The markets rallied by 4 pc in the past week. The rally caught many by surprise and let us what lies ahead for the rest of the month. Whatever be the short term direction of the market, India remains a strong growth story in the long term.1. 15th March is the time to pay advance tax final installment. market typically remains subdued expect in a few years.2. The inflation numbers are out next week and the RBI policy on the 19th of March. Any rate cuts and the markets will rally.3. The Government has made a lot of announcements, a pragmatic budget...
Wednesday, 6 March 2013
Sunday, 3 March 2013
It is a new month and time to again check statistically how the markets have fared in the month of March. The expected range for Feb was breached on the lower side thanks to the budget day effects. The downward bias was maintained in the month.Gains in March over the years1. Traditionally, march has been a down month with 7 out of 12 past years it showing a negative bias. Only 2006 and 2009 have been huge positive years.2. The good news is that whenever...
Thursday, 28 February 2013
If one had gone for the Put Strategy,Morning 5800 feb put got for 24 and 5800 march put possible to sell at 75End of day 5800 feb put fetched 109 rupees which means 87 rupees profit.87+ 75 = 162 rupees profit so far. We are covered till 5638. 200 EMA at 5649 so a bounce on cardsMorning 5800 feb call at 60 bought and march 5800 call written at 125.During the day I hope some money could be salvaged in 5800 call and march 5800 call at 57 so made 68 rupees.If salvaged money Feb 5800 call at least 20-30 rupees profit.Risk free money ma...
Wednesday, 27 February 2013
It is February 28th and time for the budget. This time the budget day is unique in a way that it matches with expiry day. Let us see if we can profit from this 1 off event.There are some strategies which come to mind and I am penning them dow here.Rule for trading in Option: Effective Risk Management. 1 should not loose large amounts of money in a single trade. Small losses are acceptable and part of the learning process.How will market react to the budget?There are 3 possibilities, go up, go down or remain flat.The volatility decreases tremendously...
Sunday, 24 February 2013
The markets drifted down further by 0.6 pc to close at the critical level of 5850. The Budget is upon us. The next week has the Railway Budget, the Economic Survey and the Union Budget. Along with this we also have the Expiry on Thursday after the budget. Let us try and examine how the things will pan out.1. The Budget going by Chidambaram track record should have something to excite the markets. This is because the Government needs a strong market to offload the PSU shares.The 1997 dream budget is a reminder how old wine can be packaged in a new...
Sunday, 17 February 2013
The market is slowly drifting down. Last week, it ended the week with a drop of another 0.3 pc. The market may be at around 5900 levels but the many of the stocks are at 5500 levels. Let us try and explore what can make the markets go up.1. One may argue that the markets have made a long-term top. What goes against this argument is there is o euphoria in the markets. Long term tops are usually characterized by news anchors beig excited on television and sharp falls in the markets.2. This is the last real budget the government presents before the...
Wednesday, 13 February 2013
Gilt funds have given a return of 14 % annualized in the last 6 months and 11 pc for the full year. Let us see if there is ay merit i investing in Gilt funds.I had written a guest post for Subhankar which can be accessed here:http://investmentsfordummieslikeme.blogspot.in/2013/02/a-re-look-at-gilt-funds-guest-post.h...
Saturday, 9 February 2013
The range predicted for February was 5850- 6200. We are about to test the lower end of the range. Will the markets make a new high? What will happen in the year 2013. Let us try and explore a few options.1. The liquidity in the markets is being drained out by the Government Offers for Sale. NTPC itself was worth about 10000 crores. The Domestic Insititutions have been selling to raise funds for these offers.2. The FIIs have bought around 5000 crores in the last few days of February. This to go with the FII buying of 19000 crores in January. The...
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